Important components of the cost-of-living crisis are a direct result of the climate crisis.

Failure by policy makers to factor in the impacts of climate change on the cost of living, will limit the government’s ability to address it. Each year we fail to mitigate emissions is another year we bake in cost-of-living pressure in the future.

Key among these price impacts are the cost of insurance, food and energy. Collectively, food and insurance account for more than a fifth of the consumer price inflation Australia has experienced since 2022.

Insurance – As the climate has destabilised, the increase in natural disasters has led to an increase in payouts for insurance companies and an increase in premiums for homeowners.

One in 20 Australian households now pay more than seven weeks of gross income on home insurance. In other words, these households work from New Year’s Day to late February, just to pay their home insurance.

Increases in insurance premiums have hit certain regional areas particularly hard, where average household incomes are lower than urban areas while premiums are higher.

The price of insurance in many areas of Australia have already become prohibitively expensive. As continued global heating and more frequent disasters make these problems worse, whole suburbs or towns will become uninsurable.

Food – Food prices have soared by about 20% since 2020. The planet’s changed weather patterns have impacted food production and, in some areas, permanently affected a region’s ability to grow particular crops. Climate impacts mean that even if Coles and Woolworths stop price gouging, food prices will keep rising.

Energy – Australia’s energy system is complex. Underinvestment in the transition to renewables and tying ourselves to international pricing mechanisms by exporting fossil fuels has resulted in high local electricity prices for Australian households. Even if we were to decouple ourselves from this, energy prices would continue to be impacted as more climate disasters damage vital public infrastructure.