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Generation-X to bear brunt of delayed action on climate change; could lose $1,300/yr in super, says Climate Institute report

Posted by gmarkets on 3 September, 2007

Workers who were now in their early 40s could lose up to $1,300 in superannuation for each year of their retirement if governments delayed setting meaningful targets for reducing greenhouse gas emissions, new modelling showed, wrote Sophie Morris in The Australian Financial Review (3/9/2007, p.3). Carbon-price scenarios: The Climate Institute report found that generation X would bear the brunt of delayed action on climate change, and might even need to work longer to build up their superannuation funds. The modelling, reviewed by analysts from AMP Capital and Goldman Sachs JBWere, looked at the impact that different carbon-pricing scenarios might have on the stockmarket, and how this would influence superannuation earnings.

Need for early action: Climate Institute chief executive John Connor said the early introduction of a strong carbon-price signal would have a less drastic effect than if deep and urgent cuts were required at a later stage. “If we are forced to take sudden action later, the adjustment in the stockmarket will adversely affect the superannuation payments of thousands of Australians,” he said. The report assumed Australia would need to cut greenhouse gas emissions by 80 per cent of 1990 levels by 2050, and compared the repercussions on superannuation for setting a strong carbon-price signal soon, versus after 2020.

Baby-boomers will be fine: Delayed action would spare baby boomers from any loss in the value of their superannuation, but would shift the cost to workers now aged 36 to 46. These workers could lose as much as $25 in superannuation payments a week when they retired.

The Australian Financial Review, 3/9/2007, p. 3

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