Crop yields under threat from climate change

In further evidence of the wide-ranging consequences of global warming, a leading figure in the Australian government has given a stark warning over future agricultural output.

Australian crop yields could be 4% below current levels by 2063, reducing the country’s economic output by A$1.8 billion ($1.2 billion) a year, unless action is taken to mitigate the impact of climate change, Treasurer Jim Chalmers said.

As recent natural catastrophe events have demonstrated, global warming is leading to hotter and more extreme weather in Australia, one of the world’s largest exporters of agricultural products, with wildfire losses in recent years leading to substantive claims for the market.

Indeed, after torrential rainfall in 2022, record temperatures and dry conditions this year have sharply reduced Australia’s projected wheat harvest.

“The latest analysis out of Treasury tells us that disasters and a warming climate have big, economy wide effects,” Chalmers said.

“If further action isn’t taken, Australian crop yields could be 4 per cent lower by 2063 – costing us about A$1.8 billion in GDP in today’s dollars.”

Chalmers added that bushfires in 2019 and floods in 2022 had cost the Australian economy around A$1.5 billion each and the government was investing in decarbonisation, drought resilience and disaster recovery programmes.

“What was $335 million in Commonwealth spending on disaster recovery in 2017-18 has become around $2.5 billion in 2022-23,” he said.