Coalition commits to climate resilience as new report bares shocking cost of inaction

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January 27 2021
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Australia has announced that it is joining 118 countries in signing two global initiatives to plan for the risks associated with climate change, as a new report reveals the cost of extreme weather in Australia has almost doubled since the 1970s to reach $35 billion over the past decade.

Australia has told the Climate Adaption Summit on Australia Day that they will join the “Call for Action: Raising Ambition for Climate Adaptation and Resilience” after the UK initially signed up more than 118 countries in 2019.

As part of the agreement, Australia has committed to a resilient futures by putting climate risk at the centre of decision making in three key areas:

Acting now to respond to immediate climate impacts and to support the most vulnerable members of society;
Building resilient futures by putting climate risk at the centre of decision making; and
Urgently increasing the availability of adaptation and resilience finance.

Australia will initially invest $12.9 million to establish Climate and Resilience Services Australia, a new capability that will connect and leverage the Commonwealth’s extensive climate and natural disaster risk information to further prepare for and build resilience to natural disasters.

But while Australia was announcing its next steps on climate change, the Climate Council's new Hitting Home: The Compounding Costs of Climate Inaction report revealed that climate change impacts and sea level rise could cost the Australian economy $100 billion every year.

According to the report, not only will the economy suffer, but by 2100 annual deaths from extreme heat worldwide will outstrip all COVID-19 deaths recorded in 2020.

Addressing the virtual summit hosted by the Netherlands this week, Environment Minister Sussan Ley said that Australia is committed to working with the international community and traditional owners to act and adapt to an already changing climate.

“Climate adaptation is about taking practical actions to help our environment, our communities and our economy deal with the impacts of climate change that are already taking place,” she said.

“We are focused on the steps we can take now and in the future to create a more resilient Australia.

Australia will also commit later this year to the Coalition for Climate Resilient Investment (CCRI) proposed under the UN climate change conference in Glasgow, designed around putting the tools and know-how into the hands of the investment community and ensuring the infrastructure we build is fit for future climate conditions.

The CCRI is a finance sector-led initiative bringing together over 75 institutional investors, banks, insurers, rating agencies and governments, representing over US$10 trillion in assets, to address climate resilience challenges.

Minister Ley said the nation is deeply committed to collaboration that accelerates adaptation to protect our communities and our planet.

“We are joining global partnerships and taking the lead in building resilient communities,” Minister Ley said.

“Climate adaptation is about taking practical actions to help our environment, our communities and our economy deal with the impacts of climate change that are already taking place.

The Investor Group on Climate Change (IGCC), which represents local institutional investors, welcomed the government’s move. The group is also a supporting institution of the CCRI and a member of the initiative’s asset design and structuring working group.

IGCC chief executive Emma Herd said worsening natural disasters across Australia, including the intensity of the 2019-20 Black Summer bushfires, were a reminder of the physical risks that climate change poses to our economy and communities.

“Federal and state governments currently spend on average $2.75 billion a year on direct recovery from disasters, but only $100 million building resilience against such events. The total economic cost of natural disasters is expected to rise to almost $40 billion by mid-century, even without consideration of the effects of climate change,” Ms Herd said.

“Developing a national strategy and mobilising private sector capital will be critical. Given the scale of the challenge, governments alone won’t be able to shoulder the load and private capital will be essential to building climate change resilience across our economy.”

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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