Climate and technology key challenges for regions

Lukas Coch/AAP PHOTOS

Failing to restrict global temperatures will hit regional and rural communities as rainfall patterns change and droughts intensify.

The Intergenerational Report released on Thursday warned if the globe can't limit temperature increases to two degrees Celsius or less over the next four decades, billions could be wiped from the Australian economy.

"The IGR makes clear the costs that could come with rising temperatures, the impact on specific sectors like agriculture and tourism," Treasurer Jim Chalmers said.

"Dealing with climate change is a global environmental and economic imperative."

While all parts of Australia will experience higher temperatures over this time period, some will be more impacted than others.

The average temperature in parts of central and northern Western Australia is projected to rise by 1.8C, whereas in Tasmania the temperature is projected to increase by 1.3C.

"This suggests Western Australia could be more directly affected by the labour productivity impacts of higher temperatures than some other Australian states and territories," the report said.

Dr Chalmers said the government established the Net Zero Authority in response to the pressures facing the nation and to ensure communities didn't miss out.

"We expect that the net-zero transformation can be a good thing for regional communities, not a bad thing for regional communities," he told the National Press Club in Canberra.

"That's how we're making sure that we are attentive to this challenge."

Regional Australia Institute chief executive Liz Ritchie said transitioning to net-zero would take communities to the nation's productivity's driving seat.

"If we want to aim to be a clean energy superpower, supporting our growing populations in regions should be a first priority," she said.

Over the next 40 years there was a risk advances in farm output driven by innovation would be outpaced by the impact of more frequent and severe natural disasters, more prolonged droughts, changes to rainfall patterns and a greater pest threat.

Broadacre cropping farms faced a higher risk than livestock and mixed farms.

Yields for most crops were projected to be negatively affected by higher temperatures by 2063 - as much as four per cent lower.

However, improved water efficiency for irrigated cropping could be of benefit.

On the technological revolution, Dr Chalmers said rural areas risked missing out if they weren't given the same access as their metropolitan counterparts.

"If tech talent remains in short supply, fast internet is confined to our cities, our regions aren't connected to these opportunities and the adoption of digital is limited," he said.

"Then it's possible, if not probable, that the fourth industrial revolution will leave more people behind than it lifts up."