The cost of extreme weather disasters in Australia has more than doubled since the 1970s, reaching $35 billion for the decade to 2019.

The trajectory of climate change impacts and sea level rise could eventually cost the Australian economy $100 billion every year, a new report from the Climate Council says.

The council says the world is entering the “decisive and transformative” decade for climate action, and Australia must act now to halve emissions by 2030, and achieve net zero emissions by 2040 at the latest.

No developed country has more to lose from climate change-fuelled extreme weather – or more to gain from a zero-carbon economy – than Australia does, the council says.

“It means pivoting from being one of the world’s largest exporters of fossil fuels to being a global powerhouse of renewable energy and clean industries,” the report says. “Failure is not an option.”

Australians are five times more likely to be displaced by a climate-fuelled disaster than someone living in Europe. Recent modelling suggests that the economic cost of climate change to Australia will rise much further over the coming decades, with the damage estimated to possibly pass $100 billion a year by 2038.

In 2019-20, a “new and dangerous era of megafires” was ushered in, ravaging Australia, Brazil, Siberia and the US. Globally, disasters caused economic losses of $US210 billion ($272 billion) in 2020, mostly due to floods, fires and storms.

The US suffered a record year of climate-fuelled disasters, with $US95 billion ($123 billion) in losses, including a record 22 major disasters of at least a billion dollars in damages.

Floods in China beginning in June were the single most costly disaster of 2020, with losses estimated at $US32 billion ($42 billion).

Risk Frontiers GM Resilience Andrew Gissing says insurance plays a pivotal role in managing the escalation in natural hazards.

“Climate change will see the potential for more frequent extreme weather events and with that a rise in average annual losses associated with those,” he told insuranceNEWS.com.au.

“Mitigating that risk is absolutely critical through climate change adaptation, and also taking action to reduce carbon emissions.”

“Where we are able to implement mitigation actions, that can flow to more affordable insurance for communities which is a good outcome for everybody,” Mr Gissing said.

“There have been calls by the insurance industry over a long period of time for mitigation action around the county both by communities and government. We’ve seen the positive results of that.”