Understanding Climate Risk

Science, policy and decision-making

After the floods – reactive vs planned responses

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Prime Minister Julia Gillard has proposed a flood levy and spending cuts and deferrals to help pay the bill for the recent Queensland floods. Referring to it as “a natural disaster of unprecedented proportions”, she is now on the road to persuade others in government, industry and the community to back her plan.

It’s worth having a closer look at, with details here and here .

It comprises:

  • $2.8 billion in spending cuts, including removing industry assistance and cutting back other green programs by abolishing the Green Car Innovation Fund and the Cleaner Car Rebate Scheme and making other cuts.
  • $1 billion in delaying some infrastructure projects– which will free up funds and skilled workers at a time of skilled labour shortages around the country.
  • $1.8 billion through a progressive levy on people earning over $50,000. This will only apply to income above the $50,000 threshold. Anyone directly affected by the floods will not have to pay the levy at all.

I’m not arguing against the levy or the scheme in total, but feel that the current approach is reactive and not strategic. My position is that we are facing a long-term issue rather than just recovering from a short-term disaster.

After having a reasonably close look at the current state of climate involving both anthropogenic and natural influences, of the recent heat- and fire-related events in southern Australia in 2009, the extended dry period in south-eastern Australia and even longer period in south-western Australia, the case for a human component in all these events is strengthening.

However, the best the science can do identify a plausible anthropogenic influence with high confidence. Any degree of qualitative likelihood would muster lower confidence and requires applied research. The relative components of human and natural influence cannot be quantified at the physical level nor at the financial level with much accuracy. However, estimates given as a range could be developed with research.

With regard to the floods, the coincidence of a strong La Niña and negative Indian Ocean Dipole leading to the wet conditions is almost certain to be natural. These events are rare but do occur and are more common when the Interdecadal Pacific Oscillation is in a La Niña-dominated mode. Is this the case at present? Don’t know. There was an article discussing the role of decadal climate variability in yesterday’s Fin Review but it is pay-walled. Total average rainfall in eastern Australia from September–December (425 mm) has a greater than 1:300 chance of occurring for a La Niña of this strength according to the statistics (will post on this in more detail later). Sea surface temperatures around tropical Australia are at record levels. So if human-induced climate change has enhanced these events in any way, they will compound the damage caused, including the cost, in a non-linear manner. The current bill is estimated to be $5.8 billion for Queensland but could go higher.

The Bushfire Royal Commission in Victoria estimated the costs of the 2009 fires in Victoria conservatively at $4 billion. Here the relationship for costs will be similar. A base component is natural because we expect hot-dry summers, but it has been inflated by human-induced warming, and possibly drying and related changes in humidity. The role of climate in the fires was pretty much ignored by the Commission. Costs in human lives lost due to heat stress, energy costs to deliver peak energy for warmer days, and disruptions to transport systems all have climate change component.

The Indian Ocean Climate Initiative has concluded a likely anthropogenic component in rainfall reductions in SW WA that has required billions to be spent on new water infrastructure. The South-east Australian Climate Initiative has also built a strong case for an anthropogenic influence in the drying since 1996. Lost production, the requirement for new water infrastructure, stress on rural communities and the impact of drought on the water reform process have all been costly. Again, the relative split between natural and human-induced components can’t be untangled at present.

So while it’s impossible to say what the cost is at present, there is a cost. This begs several questions:

  • Are these solely natural disasters – what are the relative estimated influences of natural and human induced climate fluctuations?
  • What is the estimated cost of a range of events over the past one to two decades? 1996, when global temperatures increased by 0.3°C in a step change would be a good date to start.
  • Are the added costs (and remember, the cost enhancement is non-linear in all these cases), putting pressure on budgets, state and federal?
  • Should assistance and rebuilding be seen as a one-off, or do we need to develop a more strategic approach?
  • Should we rely on replacing what was damaged, or should adaptation to changing conditions to reduce future risks be applied?

Some of the following programs to be cut or deferred are designed to reduce carbon emissions to the atmosphere:

  • Not proceeding with the Cleaner Car Rebate Scheme
  • Abolishing the Green Car Innovation Fund
  • Reducing and deferring spending on the Carbon Capture and Storage Flagships and Solar Flagships programs and the Global Carbon Capture and Storage Institute
  • Abolishing the Capital Development Pool from 1 January 2012
  • Discontinuing funding for the Australian Learning and Teaching Council
  • Reducing the National Rent Affordability Scheme dwelling target
  • Redirecting funds from the Priority Regional Infrastructure Program and Building Better Regional Cities Program
  • Capping annual claims under the Liquefied Petroleum Gas (LPG) Vehicle Scheme
  • Capping funding for the Renewable Energy Bonus Scheme – Solar Hot Water Rebate
  • Not proceeding with Round 2 of the Green Start Program
  • Capping funding for the Solar Homes and Communities Plan
  • Withdraw funding to the O-Bahn City Access project.

Without arguing the relative cost-benefit of these schemes and recognising that they would not influence climate itself for several decades in any case, to transfer funds from mitigation to adaptation, when the current level of mitigation is totally inadequate to manage future risks, seems counter-productive. Perhaps the funds earmarked for cash for clunkers could be much better spent, but the economics of climate change need to be taken much more seriously than they are at present.


Written by Roger Jones

January 28, 2011 at 12:32 pm

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