A flooded home in Auckland on 1 February 2023. Photo: RNZ / Rayssa Almeida
New Zealand's economy could be $64 billion better off by 2050 if decisive climate action is taken, a new report by consulting firm Deloitte claims.
But failing to act could shrink the economy by $4.4 billion.
Deloitte's Turning Point compares what could happen if the planet warms by 3C by the end of the century, against limiting global warming to as close to 1.5C above pre-industrial levels as possible by 2050.
The country has the opportunity to be a "leader in growth and prosperity through rapid decarbonisation", the report said.
"There are not just costs in action against climate change, but quite significant benefits" - Deloitte economics director Liza Van Der Merwe
That means up-front costs that at first lower economic activity, but around 2036, there would be tipping point, and growth would start to outweigh the costs.
"Initially New Zealand will face some costs in order to decarbonise, but as of around 2036, New Zealand can have a turning point - and a turning point is the point at which the benefits of the size of action on climate change can then exceed our initial upfront cost," Deloitte economics director Liza van der Merwe told Morning Report.
The government and the private sector need to work together to improve emissions, Deloitte corporate finance partner David Morgan said.
"There is already some great work being done but a lot more is needed. If the pace of decarbonisation can be escalated then New Zealand would be one of the first countries to reap the benefits."
Doing nothing, the report predicts increasing temperatures will take a toll, including the loss of productive land, and investments diverted to patch up existing assets.
The report was also forecasting nearly 3000 fewer jobs by 2050 due to climate change if urgent action was not taken.
"It's a call for both the private sector government and consumers to work together," said Van Der Merwe, calling the report a "reframing" of the climate debate when it came to the economy. "There are not just costs in action against climate change, but quite significant benefits."
A problem Van Der Merwe noted is a lack of consistency across different governments.
"What we need is clear and consistent and predictable policies to ensure that the investment that we need to decarbonise is not deferred or delayed."
Worryingly, the report said its predictions were conservative.
"The estimates described here are conservative," the report noted. "There are a range of impacts we have not explicitly modelled, such as the impact of individual natural disasters and extreme events, water availability and ocean acidification."
Though achieving the 1.5C target is a global one, Deloitte said New Zealand - despite its low overall contributions to the world's total emissions - cannot afford to do nothing.
"If no change is made and New Zealand falls behind, key exports could be impacted as trading partners commit to net zero targets and start to focus on the sustainability of their imports."