Under pressure: The climate crunch fueling inflation and hurting Aussie families

14.11.24 By , , , , and

Australia has entered the ‘era of climate consequences’, with the vast majority of Australian households already impacted by climate change. Climate pollution from the burning of coal, oil and gas is fuelling increasingly severe bushfires, floods, heatwaves and destructive storms. As a result, the overwhelming majority (84%) of Australians report being directly affected by at least one climate-fuelled disaster since 2019.

Building on this research base, the Climate Council and Parents for Climate set about painting a clearer picture of how fossil fuels like oil and gas are not only adding to our pollution woes but are also pushing up inflation and the costs of living for Australian families. Our analysis shows that oil and gas are making a material contribution to overall inflation.

Domestic inflation reached its highest level in more than 30 years, with the cost of everyday items increasing by an average of 22 percent since the start of 2020 (ABS 2024). The price of oil and gas has risen much more than other goods, putting pressure on family budgets and pushing up inflation overall. On top of inflation, the cost of buying expensive petrol and gas is something that many Australians can’t avoid. Most Australians drive a petrol or diesel car and around two in three households (more than five million properties) use fossil gas for heating, cooking or hot water.

Our new, national poll of parents provides valuable quantitative data on how this is impacting families. While a separate survey provides a rich trove of testimonies from families all over Australia who are living through a cost-of-living crisis exacerbated by climate pollution.

We find that Australian families are struggling to cope with sky-high costs of housing, groceries, electricity, petrol, and insurance premiums. Financial strain has grown over the past two years. As a result, Australian children are suffering and missing out on necessities like quality, healthy food and fun activities with their family and friends.

Key Findings:

1. The climate crisis is driving up the costs of insurance for all Australians as extreme weather events become more common and intense, risks to life and property worsen and premiums rise in response.

2. Australians are paying much more today to power their homes with gas, or refuel their cars. Higher costs for oil and gas are also fuelling inflation, which increases the price of many other everyday items. Petrol and diesel costs have increased significantly. Filling up a 70-litre tank of petrol costs about $30 more now than it did at the start of 2020.

3. Rising inflation, and relying on expensive oil and gas, is crunching household budgets with many families reporting they are under significant stress.

4. To cope, most Australian families are sacrificing many things including less sport and recreation for their kids and cutting back on the amount or quality of food.

5. Polling shows both the rising costs of living and the climate crisis are pressing concerns for most Australian families, and parents worry costs will only worsen if we don’t cut climate pollution further and faster.

6. Cleaner, cheaper solutions to the cost of living and climate crises are understood and popular with parents. To ease pressure on people’s wallets and the planet, they need to be more accessible.