Deloitte Report Warns of Severe Financial Toll on Younger Generations from Climate Inaction
A new report from Deloitte Access Economics has issued a stark warning, revealing that if Australia fails to accelerate its response to the climate crisis, the financial burden on younger generations will be staggering. According to the modelling, Generation Alpha, the cohort born from 2010 onward, could face a lifetime cost of $185,000 per person by 2070 due to the impacts of global heating.
Modelling Exposes Intergenerational Disparities
The analysis, conducted by a team of young economists including Rhiannon Yetsenga, Rhiain Powell, Will Neumann, and Chern Han Mah, projects that under current climate policies, millennials would lose approximately $130,000 over their lifetimes, while Generation Z would incur costs of $165,000. In contrast, the damage to Generation Alpha's prosperity from a business-as-usual approach is estimated to be nearly 10 times that suffered by baby boomers and more than double the costs borne by Generation X Australians.
Yetsenga emphasised that this highlights how "taking action on climate change is not just an environmental or moral issue, it's really a question of intergenerational inequity." She added, "For this generation, climate change is not a distant threat but an immediate, lived experience with severe consequences."
Economic Impacts and Locked-In Costs
The report estimates losses stemming from reduced worker productivity, infrastructure and property damage, heightened health risks, and increased healthcare expenses. Additionally, more frequent and extreme natural disasters are expected to undermine tourism and destabilise agriculture sectors.
Yetsenga noted that many of these costs are already inevitable due to emissions lingering in the atmosphere for decades. "I think there is a lot of goodwill and people trying to do a lot of good things. But it's fair to say that young people are frustrated," she stated, pointing to widespread distrust in government action on critical issues like housing and climate change.
Pathways to Mitigation and Economic Opportunity
The economists modelled two scenarios: an "insecure youth prosperity" scenario, where global warming continues based on current policies, and a "secure" scenario involving aggressive action to achieve net zero emissions by 2050. In the latter, millennials and Generations Z and Alpha could avoid costs of about $50,000, $70,000, and $80,000, respectively, over their lifetimes.
Advocating for a carbon price as the most efficient mechanism to drive emissions reduction, the report also suggests expanding safeguard measures. Yetsenga argued that action need not compromise economic growth, highlighting opportunities in green industries like green iron and critical minerals to "future-proof" the economy. "I wouldn't want to send the message that we have to compromise, because done right, this could be an opportunity," she said.
Broader Context and Expert Commentary
Ken Henry, a former Treasury secretary, described the findings as evidence of a "shifting of the intergenerational burden," warning that continued inaction forces future generations to bear escalating costs and adaptation challenges. He stressed that climate change poses an existential risk, ranking it among the highest priorities for policymakers.
The report aligns with recent global data, including a United Nations World Meteorological Organization confirmation that 2015 to 2025 were the hottest 11 years on record, underscoring the urgency of addressing climate change to protect economic and social wellbeing across generations.
