The scale of the tragedy that is the ongoing flooding in NSW and Queensland is hard to comprehend. Although the ever-increasing insurance claim figures sit at well over $2 billion, this is the tip of the iceberg.
The loss of lives, the damage to infrastructure, the loss of productivity and the physical and mental health toll taken on the nearly 10 million Australian's makes the true cost of the event devastatingly higher.
We have a responsibility to ourselves and our kids to make sure that next time we are better prepared - and there will be a next time. Climate change will result in catastrophic weather events becoming more frequent. As the Prime Minister recently put it: Australia is becoming a harder country to live in.
This will involve a creative re-examination of Australia's climate change policy. With largely bi-partisan support for a net zero target by 2050, and after the noise of COP26, one could be forgiven for thinking that the climate change debate is settled.
However, the reality is that even limiting global temperature rises to around 1.5 degrees by 2050 will not stop Australians being hit by increasingly frequent catastrophic weather. Although the mitigation of our share of greenhouse gasses is crucial, we must also incorporate resilience into our climate change policy.
Proactive action by industry, businesses, and governments to pursue climate resilience could deliver a $380 billion dividend over the next 30 years, according to our recent analysis with the Minderoo Foundation. This means of the estimated $1 trillion in economic costs from climate change over the next 30 years, more than one-third is avoidable through action that can be taken today.
This won't be easy - the need for adaption is far reaching. It ranges from thinking about how to protect workers exposed to hotter conditions, to assessments we make on climate impacts when building new infrastructure, to reinforcing levees along our rivers and managing living in coastal regions, and to better asset management and investment decisions by business.
Adaptation might mean different work hours and different schooling hours in some regions and could even impact when and where we play sport outside. Just as transforming to a net zero economy means widescale change, so too does becoming resilient.
On a public policy level, this will involve drastically flipping the idea of natural disaster funding on its head. According to the Productivity Commission, just 3 per cent of the money committed to disaster recovery is used for preparation before an event occurs, while 97 per cent is committed to response and recovery after the event. This is not good enough: preparation must be a priority.
On a private sector level, we need businesses in all sectors of the economy to treat adaptation as necessary insurance and build it into their business strategies and operations.
Our modelling shows that adaptation strategies alone can add $120 billion in benefits to the Australian economy by 2050, and these strategies benefit the economy from the time of investment.
Conversely, the cost of inaction will grow every year and by 2050 could cost Australia 3.6 per cent of its GDP and 137,000 jobs, according to our worst-case scenario.
The climate change debate has, to date, been dominated by the important agenda of mitigation. The politics and urgency of the debate has been polarising and, perhaps, lent itself to partial analysis and partial solutions.
Australia will not be physically or economically resilient to a changing climate unless adaptation is considered at the same time.
- Claire Ibrahim is a partner at Deloitte Access Economics and Dr Pradeep Philip is head of Deloitte Access Economics.
