New modelling released today projects the real cost of heatwaves will jump 400% from $1.4bn today to more than $6.8bn by 2070, with twice as many days over 35C.

Burning Money, the new report from Committee for Sydney and Scyne Advisory, calculates the economic cost of heatwaves for Sydney.

The report shows population growth in the hottest parts of Sydney is translating to a steep increase in cooling energy costs for households, detrimental health costs due to heat stress, and productivity loss in key industries.

Key data points:

• Annual productivity loss across the workforce could climb 470% to around $2bn on average per annum by 2070
• The cooling component on household energy bills is set to jump by 37% due to the increased amount of air-conditioned cooling required
• The population exposed to negative health impacts (number of people multiplied by heatwave days) will dramatically increase from 14 million today to more than 100 million in 2070 – vulnerable communities will experience nearly a quarter (23%) of total negative impacts
• The health cost of heat stress will create a $4.1bn burden on households in 2070s, up from $637mn in 2023.

Sam Kernaghan, Resilience Program Director at the Committee for Sydney:

“Every time the mercury reaches 35C, homes and businesses are burning money across Western Sydney.

“These costs are being paid by us – residents, businesses and taxpayers of Sydney and NSW.

“Households are already paying more than $650 in additional per capita costs today from productivity losses, health costs, and costs of household cooling.

“Heatwaves are making Sydney’s west a less liveable and more expensive place to live, and that will get worse with time.

“We know heat will constrain outdoor operations and maintenance, including utilities, construction and the logistics sectors. Indirect costs include the cost of cascading impacts, such as melting road and runway surfaces, as well as the buckling of railways due to thermal expansion.

“Far more important than lost productivity is people losing their lives at work, on the sporting field and in their homes in Sydney. Heat is Australia’s silent killer, responsible for more deaths than all other natural disasters combined.

“On the back of the hottest year in living history, it’s time to take bold, brave and economically astute decisions to reduce the impacts of heatwaves to business and the community today, and to initiate longer-term steps to reduce rising health, household and economic costs.”

The report makes five key recommendations, which have been strengthened by participation in the Greater Sydney Heat Taskforce, led by the Western Sydney Regional Organisation of Councils (WSROC) and Resilient Sydney:

• Appoint a lead agency to deliver integrated heatwave adaptation (Now – 2024)
• Integrate heatwave risk into a new Disaster Adaptation Plans across Greater Sydney (Now – 2024)
• Embed the economic costs of heatwaves in the next NSW Intergenerational Report (Next – 2025)
• Explore heatwave insurance options for business and households (Next – 2025)
• Accelerate action on Decarbonising Sydney and NSW (Now – 2024 onwards).