Floods, cyclones and $2.2 billion lost – who should pay for climate disasters?

💸 Disasters are costing Australia billions

The federal Treasury has revealed natural disasters have cost Australia $2.2 billion this year alone. Events like Cyclone Alfred, flooding in North and West Queensland, and the recent floods on the Mid North Coast of New South Wales have all contributed to the massive economic toll.

According to the government’s Disaster Assist website, there have been 27 separate natural disasters in the first five months of 2025.

🛍️ Queensland retail takes a hit

One way this damage shows up in the economy? Retail trade. In Queensland, nominal retail trade fell by 0.3% in February and 0.4% in March. That drop reflects how disasters can slow down economic activity, especially in hard-hit regions.

These figures were released ahead of Wednesday’s national accounts, which offer a snapshot of how the economy is tracking — a classic move to soften expectations. 

🌪️ It’s not just about the money

While economic damage matters, it’s people’s lives that are most impacted during natural disasters. Still, like a car crash, ignoring the root causes doesn’t help.

Last week, we spoke with David Karoly, the former chief research scientist at the CSIRO, who put it plainly: human-caused climate change “puts the weather on steroids”.

That’s what we’re seeing play out — more intense floods, cyclones and fires.

🛢️ New gas project approved amid climate chaos

At the same time as disasters mount, the government has approved an extension to the country’s largest gas project, in Western Australia.

Even if that gas isn’t all burned in Australia, it’s going to add a huge amount to global emissions — emissions that worsen the climate conditions driving these disasters.

🕸️ Climate plans collecting dust

What of the government’s National Climate Risk Assessment and Adaptation Plan? Well, it  remains unreleased. 

In the meantime these disasters aren’t going away — and they’re only going to become more expensive.

💰 One idea to pay for it

A proposal from the Australia Institute suggests placing a $1 levy per tonne of carbon dioxide for all coal, gas and oil produced in Australia.

That would raise around $1.5 billion a year — which could help pay for the increasing cost of disasters.

💨 A climate PM, with a fossil fuel problem

Prime Minister Anthony Albanese acknowledges the effects of climate change, but approving this gas project early in his term was a tactical political decision. 

However, given how much political goodwill - or capital - he’s junked by making this decision, important questions arise: Will Albanese spend the next three years trying to make up for his gas green light? And how much more difficult will that be if these extreme weather disasters keep happening, with Australians left to foot the bill?