Home Updates

Coming Ready or Not: Can Australia’s Infrastructure Handle Climate Change?


Australia will face significant human and economic costs because its infrastructure is poorly equipped to handle more frequent extreme weather events and other consequences of climate change, according to a new report released on October 29 by The Climate Institute.

“Australians are no strangers to extreme weather events. With these events likely to get more frequent and more unpredictable, Australia should be better placed to adapt to our changing climate. But we are poorly prepared to bear its impacts on major infrastructure, whether it’s roads, property, or electricity networks,” said John Connor, CEO of The Climate Institute.

The report, “Coming Ready or Not: Managing Climate Risks to Australia’s Infrastructure”, gathers research on the physical impacts and consequences of climate change on major infrastructure across the property, electricity, road and rail, and finance sectors. It examines the preparedness of businesses and governments to manage these risks and the steps needed to improve Australia’s climate readiness.

“For the first time these sectors – which are key to our economic security – have been rated and the facts are that the electricity, financial services and road and rail sectors are underprepared,” said Connor. “There is early preparation in the property sector, and water supply appears relatively advanced.”

Conservative estimates put the annual cost of unmitigated climate change on Australia’s infrastructure at about $ 9 billion in 2020, rising exponentially thereafter. Research for superannuation funds has global costs already in excess of US $ 1.6 trillion per year.

“Australia represents 2 per cent of the global re-insurance markets. But given extreme weather events such as floods and fires, over the last five years it has incurred 6 per cent of the losses,” said Connor. “Serious climate risks are coming ready or not, and this report finds that our basic infrastructure is not.”

“The report finds government policies and regulations are inconsistent, confusing and at times counter-productive. Market signals to encourage smarter management of climate change related risks are weak or non-existent. Information is fragmented, dispersed and often not accessible.”

Key findings include:

  • Government policy is fragmented. Australia lacks a nationally-coordinated approach to manage climate risks to major infrastructure, with much of the burden of policy implementation left to local councils – the least resourced and most decentralized level of government. Information on likely climate impacts is also fragmented and dispersed.
  • The business response is uneven. Some organizations understand and manage their exposure to climate risks, but most infrastructure owners and operators are focused on maintaining their assets to standards based on historic climate settings that are today relics of the past. Unfortunately, laggards face no or little penalty, while early movers are hampered by fragmented information, and inappropriate and inconsistent regulation.
  • Infrastructure is highly interdependent, but action on adaptation is isolated at the organizational level. Despite some examples of collaboration, preparation for climate change tends to focus on organization-level risk management. The implications of climate impacts on interdependent systems and communities remain under-explored.
  • Concern about climate change has fallen among those sectors most exposed. CSIRO reports that companies reporting they have carried out vulnerability assessments slipped from 60 to 47 per cent between 2008 and 2010. There is also emerging resistance to adaptive decisions at the community level. This is particularly the case with state coastal climate change planning in retreat and local planning decisions inconsistent and often poorly communicated and implemented.

“There’s no doubt that the bitter political battle of recent years has had a significant impact on public and business perception of climate risk,” said Connor. “But we cannot ignore the fact that political squabbles aside, climate risks are rising and we need to manage the unavoidable and avoid the unmanageable.”

The report makes recommendations for business and governments. It calls on business to assess and disclose climate risks implementing organizational and collaborative risk management. Governments are urged to refresh the National Climate Change Adaptation Framework, expand analysis of infrastructure interdependencies, publish a national resilience report card, and deliver leadership through collaboration.

“All organizations, whether public or private, should be identifying the potential damages and costs today, so that infrastructure projects are built to be resilient,” said Connor. “We need to consider physical damage and repair, interruptions to supply chains and operations, and insurance and reputational damage.”

“As emissions and temperatures rise, so do the costs of adaptation and the risks of getting it wrong. For a global temperature rise of less than 2 degrees Celsius, climate impacts must at the very least be integrated to infrastructure design, construction, maintenance, operations and regulations.”

Connor added, “But Australia is a no stranger to extreme weather events, and our population lives in coastal cities that are exposed to rising sea levels and connected by infrastructure that is exposed to the full range of weather conditions. For us, a world of more than 2 degrees of global warming will require a much more radical change to infrastructure and our daily lives.”

The report was prepared in partnership with several business partners including Manidis Roberts and Mirvac with support from Bond University. It will form the basis for further consultations and research to explore the extent to which companies are exposed to indirect climate impacts on their supply chains, workforce and infrastructure.

Click here to read/download the Full Report.

Source: The Climate Institute.