Jun 07, 2016 - 12:00pm
With climate risks rising as our weather systems intensify under the influence of climate change, the questions of who should bear the costs of mitigation, recovery and retreat from the impacts of extreme weather, in relation to property and infrastructure, will increasingly come into the spotlight.
Insurers, banks, state, federal and local governments, as well as other stakeholders such as developers and communities themselves, all have a critical role to play in reducing and avoiding these costs.
Warming oceans and rising sea levels are both the physical results of climate change. Their influence on the intensity of lows, such as this weekend's east coast storm system, is complex. Yet we know they are responsible for interacting with our weather system in such a manner that its destructive effects - the size of king tides, wind speeds and rainfall levels - become much more significant and costly.
People often expect insurance to cover every kind of damage to their homes, but that is not always the case. The Climate Institute’s recent paper, There goes the neighbourhood states that, while insurers could do better in communicating increasing risks of extreme weather, we can't expect the insurance industry to protect us from all the costs of increasing frequent and extreme weather events.
The same goes for local government-funded mitigation such as seawalls and groynes, which are costly and can be extremely contentious among local communities, as events in Byron Shire illustrate.
There goes the neighbourhood points out that states and the federal government need to take stronger action to coordinate information and responses. They will also need to take stronger action to help limit global warming driving climate impacts.
We also point out that the banking industry, which finances many home purchases and the vast majority of new residential developments, needs to help ensure Australians can access the best available knowledge about the exposure of, and risks to, their homes. Banks could begin by engaging more thoroughly in stakeholder discussions and policy reviews. Ultimately, they could consider risks to their own mortgage book, and how to communicate risks to prospective mortgagors.
Although our paper focuses primarily on the financial sector, we believe other stakeholders such as residential property developers and building codes authorities also need to be part of the solution.
For more information:
Brinsley Marlay ● Media Manager ● 0422 140 555