Antinuclear

In the 2008 Garnaut Climate Change Review, which examined the scientific evidence around the impacts of climate change on Australia and its economy, he predicted that without adequate action, the nation would face a more frequent and intense fire season by 2020.

Speaking to the ABC about the latest bushfires and the potential economic fallout, Professor Garnaut refrained from taking a direct shot at policymakers who ignored many of the review’s calls for action.

But he noted: “If you ignore the science when you build a bridge, the bridge falls down.”

The initial damage bill from Australian bushfires that began in September has risen to $700 million, according to Insurance Council of Australia estimates, and is likely to grow.

ICA’s Campbell Fuller told ABC News that 1,838 homes have been destroyed across Australia since September and there have been 8,985 insurance claims for fire-related damage and destruction.

But insured losses are just a small part of wider economic losses.

The total cost of the 2009 Black Saturday bushfires was estimated at $4.4 billion.

Conservative estimates put the final cost of the current Australian bushfires well into billions of dollars, while some analysts say it could cost the economy $20 billion in lost output.

Economist says cost could hit $3.5 billion

The head of economic analysis at SGS Economics and Planning, Terry Rawnsley, has done some early estimates on the economic cost of the bushfires.

Based on previous modelling of the Tathra fires in 2018, and taking account of $700 million worth of insured losses, the economic fallout from the latest fires could be as high as $3.5 billion, he said.

Between $2 billion to $3 billion includes the direct costs to fire-affected regions such as the loss of tourism and retail income, and the impact on agricultural production.

He predicts that some of the worst-affected communities will never fully recover.

And smoke haze in major capital cities could be an additional $500 million drag on the economy.

“These are places not directly impacted by bushfires, but people aren’t out and about, and people are calling in sick with respiratory and asthma illnesses,” he said.

Mr Rawnsley said while SGS Economics had modelled the loss of income from livestock such as sheep and cattle being destroyed, it had not modelled the actual loss of the assets (the loss of the sheep and cattle itself).

Professor Tom Kompas, one of three chief investigators in the Centre of Excellence for Biosecurity Risk Analysis (CEBRA) at the University of Melbourne, said the economic cost of the bushfires would be “massive”.

He said he intended to do precise modelling on the impact later this month.

His earlier research on economic impacts of climate change had predicted $1.2 trillion in cumulative damages from now to 2050 assuming a global temperature increase of 3.8-4C by 2100.

But the $1.2 trillion in losses looks at infrastructure lost due to sea-level rise, losses in agricultural and labour productivity and limited human health and biodiversity impacts.

“It does not include the cost of bushfires on infrastructure and resulting increases in insurance premiums,” he said.

“It also does not include damages from human health effects due to pollution and smoke-related illnesses, losses in tourism, losses to major environmental assets … or the costs of emergency management, recovery and relocation.”

Estimated $20 billion could be wiped off GDP

AMP Capital chief economist Shane Oliver estimated a reduction of between 0.25 and 1 per cent in the level of national economic output as a result of the fires, which he forecast would show up mostly in the March quarter.

Based on Australia’s gross domestic product (GDP) of about $2 trillion, a 1 per cent drag could equate to about $20 billion.

Still, even a lesser 0.25 per cent hit would be a major drag on economic growth, in an already slowing economy.

“The economic costs will clearly run into billions of dollars,” Dr Oliver said.

Everyone would pay to some degree via higher premiums as insurance claims spiked, he said…….. https://www.abc.net.au/news/2020-01-08/economic-bushfires-billions-ross-garnaut-climate-change/11848388