Australian news, and some related international items

Extreme weather in Australia – the economic effects : why we need to prepare for this

Storm-o-nomics: Why Australia should be more prepared for extreme weather, The Conversation, By Matt Wade
February 9, 2019  Another Australian summer has been marked by disasters triggered by extreme weather. Some came out of the blue, like the Townsville floods. Others unfolded gradually, like the droughtafflicting much of eastern Australia.

But there’s one characteristic our natural disasters have in common: their high price tag when compared with the rest of the world.

The World Disasters Report 2018, prepared by the Red Cross, found Australia was ranked 10th in the world for the cost of damage caused by disasters between 2008 and 2017. It estimated our disaster damage bill over that decade to be a hefty $US27 billion ($38 billion).

A separate study by London-based charity Christian Aid rated Australia’s lingering drought as the world’s seventh most costly weather-related disaster of 2018 (between US$5.8 and $9 billion).

We’re also located in world’s most disaster-prone region. The Asia Pacific was hit by two out of every five of the 335 disasters recorded worldwide in 2017 and suffered 58 per cent of disaster-related deaths, according to the Red Cross.

The headlines typically focus on the insurance losses caused by property damage following a calamity like the Townsville floods.

recent report by consultancy SGS Economics and Planning for insurance company IAG tallied the insurance losses in Australia due to natural perils between 1970 and 2013.

During those decades storms caused the greatest losses (27 per cent of the total) followed by hail damage (21 per cent), floods (18 per cent), tropical cyclones (18 per cent) and bushfires (10 per cent).

But there’s a difference between insurance losses due to extreme weather and the broader economic cost. Insurance losses following natural disasters only capture the losses accruing to insured assets such as homes, motor vehicles and business premises. That’s only part of the story.

The disruption caused by disasters changes the way businesses and consumers behave, sometimes for an extended period, causing losses to production that never show up in insurance claims. ……….

Professor Frank Jotzo, director of the Centre for Climate Economics and Policy at the Australian National University, says climate science shows Australians should expect more frequent, and more intense, extreme weather events due to climate change. He warns the effects of climate change will drag on the economy in two ways.

First, the destruction caused by more frequent extreme weather events, especially to public infrastructure, will require capital and labour to be diverted to rebuilding things we already have rather than creating new productive assets.

“It means we have to invest resources in things that don’t give us an additional economic output,” says Professor Jotzo.

Second, climate change will take a toll on productivity. One obvious example is the impact higher average temperatures and shifting rainfall patterns will have on agricultural production.

The health of employees, especially in cities, will be affected by more frequent and long-lasting heatwaves and that means more work days lost to illness.

“Heatwaves mean people are under greater stress and more prone to ill-health,” says Jotzo. “That’s a direct hit on the economy.”………..

So what can be done?

Rawnsley’s analysis shows governments have focused too much on post-disaster reconstruction while investing too little in mitigation.

“Out of ever $100 spent on disasters about $97 is spent post the disaster,” he says.

The upshot? A disaster-prone nation like Australia should be doing more to mitigate the effects of extreme weather. 

February 10, 2019 - Posted by | AUSTRALIA - NATIONAL, business, climate change - global warming

1 Comment »

  1. Reblogged this on jpratt27 and commented:
    Stop Adani declare a climate emergency demand a GreenNewDeal


    Comment by John | February 11, 2019 | Reply

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