Will our infrastructure stand up to extreme weather?

Slowly but surely businesses and governments around the world have begun confronting the reality that, in the not-too-distant future, they will need to respond to more extreme weather events and rising climate risks which will challenge their assets, supply chains, core infrastructure and social stability. More businesses in particular, are finding that it is imperative to plan, design and deliver infrastructure so it accounts for these future risks and is sustainable.

Earlier this month global reinsurer Munich Re discussed the “initial climate change footprint” in current loss data. The Carbon Disclosure Project recently revealed the increasing number of global extreme weather events has seen climate change “climbing the boardroom agenda” worldwide.

Coming Ready or Not, a new report by The Climate Institute, looks at recent research on the physical impacts and flow-on consequences of climate change on major Australian infrastructure assets. Infrastructure was chosen because it is a critical enabler for activity across all sectors of the economy and because its exposure to climate change potentially puts other parts of society at risk.

The stark findings of this comprehensive research are that the electricity, financial services and road and rail sectors are underprepared. Property is at an early stage of preparation and the water supply sector is relatively advanced.

The situation is far from rosy – our government policy on adaptation is also patchy and highly fragmented. Australia still lacks a nationally coordinated approach to managing climate risks to major infrastructure. Under pressure state governments are relaxing planning controls. Mapping and modelling of projected future climatic conditions along with information on Australia's preparedness for likely climate impacts are fragmented, dispersed and in many cases inaccessible.

Business response is also uneven. Some organisations are moving to better understand and manage their exposure to climate risks. However, most infrastructure owners and operators are focused on maintaining their assets to standards based on historic, not future, climate. Laggards face no or little penalty, while early movers are hampered by fragmented information, and inappropriate and inconsistent regulation.

Most worryingly perhaps, concern about climate change has fallen among those sectors most exposed. CSIRO reports that companies reporting they have carried out vulnerability assessments slipped from 60 to 47 per cent between 2008 and 2010.

Infrastructure is highly interdependent – when one asset is damaged others may also be impaired. Despite some examples of collaboration, preparation for climate change tends to focus on organisation-level risk management. The implications of climate impacts on interdependent systems and communities remain largely underexplored.

Climate impacts to infrastructure cascade through the economy and are felt throughout the community. Modelling for the 2008 Garnaut Review conservatively estimated that the annual costs of unmitigated climate change on Australia's infrastructure would reach about $9 billion in 2020, rising exponentially thereafter.

The report makes recommendations for business and governments. It calls on business to assess and disclose climate risks implementing organisational and collaborative risk management. Governments are urged to refresh the National Climate Change Adaptation Framework, expand analysis of infrastructure interdependencies, publish a national resilience report card and deliver leadership through collaboration.

The costs of continued inaction are high and are already becoming a reality. Research for superannuation funds found climate change is already costing an estimated $US1.6 trillion globally per year, rising to over $US4 trillion by 2030. Infrastructure damage is the largest single cost incurred. Australia represents 2 per cent of the global re-insurance markets, but in the last five years it has incurred 6 per cent of the losses.

The extent to which Australia's climate changes this century depends largely on the success of global efforts to reduce greenhouse gas emissions, but some warming is already locked in. The changing climate drives not just warmer but wilder weather. Adaptation is therefore a necessary complement to urgently needed efforts to reduce greenhouse gas emissions as we seek to both manage the unavoidable but avoid the unmanageable.

As global emissions and temperatures rise, so do the costs of adaptation, and the risks of getting it wrong. For a global temperature rise of less than 2 degrees Celsius, climate impacts must at least be integrated to infrastructure design, construction, maintenance, operations and regulations as a matter of routine. Possibly even at such warming but certainly for more warming we will need a radical realignment of exposed infrastructure, alternative pathways for essential services and a dramatic transformation of how and where we live and work.

Australia, with its wealth and years of experience with extreme weather events, should be better placed to manage at least the emerging climate risks. Coming Ready or Not, like the aftermath of the Victorian bushfires and Queensland flooding, reveals the risky stakes in a disturbing lack of preparedness in Australia's vital infrastructure.

Stella Whittaker, Senior Executive – Sustainability and Climate Change, Manidis Roberts and John Connor, CEO, The Climate Institute.