My wife and I have been playing close attention to the catastrophic fire situation in New South Wales, a state of Australia that we resided in for several years. I even worked for the New South Wales government: the Office of Environment and Heritage, within the Department of Planning and Environment.
The most pressing concern of ours was obviously about the safety and wellbeing of all those we care about from our time there.
But climate change obviously comes into the narrative, too, and thoughts about how cities and businesses can maintain an adequate standard of life in the context of these extremes becoming normal.
When I studied my Master’s of Science in Environmental Management many years ago, extreme weather events like the fire and drought that New South Wales is currently experiencing, was part of the “scary” 2030 or 2050 climate modelling scenarios. Not the shorter term projections. A New York Times article I shared recently captures this better than I could – “How Scientist Got Climate Change so Wrong”, go read it here. But basically, we appear to have underestimated the effects.
These models predicted that the increasing frequency and intensity of extreme weather events will influence things like electricity infrastructure. The kind of thing that happened in California in October. We all saw the news about the wildfires and how PG&E, the power producer, was blacking out Californians on safety grounds.
I thought that was already bad enough – until I found an article I had saved from late July, months before the fires. It made me wonder how much longer Californians will be blacked out on financial grounds?
The Reuters article, titled “PG&E expects $4.8 billion of initial contribution to California wildfire fund” had three key numbers:
- US $30 billion – In January this year, PG&E filed for bankruptcy because it had US $30 billion in liabilities as a result of the 2017 and 2018 fires.
- US $21 billion – The State of California created a US$21 billion fund for “cover[ing] liabilities from future wildfires caused by their equipment”.
- US $4.8 billion – PG&E will make an initial contribution to this fund of US$4.8 billion, and then US$0.2 billion per year onwards.
Those numbers add up to almost US $56 billion. That is a lot of money.
It is the kind of number that raises questions as to what extent Australia has ever looked at the economic and societal costs of recovery against investment into building our resilience to the new normal of increasing frequency and intensity of extreme weather events. After all, the US $56 billion into California’s wildlife fund is more than the Australian Government borrowed to push the economy through the Global Financial Crisis of 2007.
Alarmingly, it does not appear that the Australian Government has ever connected the dots on this. In 2017, the Australian Business Roundtable for Disaster Resistance and Safer Communities, a group of CEOs committed to lobbying the urgency and importance of Australia’s resilience to extreme weather events and natural disasters, commissioned a report called “Building resilience to natural disasters in our states and territories” (link). One of its four recommendations, quoting the Executive Summary, is on exactly this:
Improve understanding of disaster risks and costs to society
Limited comprehensive data is available on disaster events, economic costs, affected people, assets and essential services – despite the requirement for these data to be included in Sendai Framework reporting from 2019.
Government spending on both recovery and resilience is not collated and remains difficult to monitor. Recovery expenditure data at the local, state or federal level is not comprehensive given that only a small share is claimable under the Natural Disaster Relief and Recovery Arrangements. As the Productivity Commission found in 2014, natural disasters have become a growing unfunded liability for governments.
This morning I saw a map (courtesy of Isobel Roe) showing the entire country ablaze. This is now a national crisis.
We need to talk about building resilience to climate change to mitigate the tremendous costs of recovery.
But this morning I read that Prime Minister Scott Morrison refuses to talk about climate change with respect to this natural disaster. And that 24 former fire and emergency chiefs had been pleading to meet with him for months because they “knew that a bushfire crisis was coming”, but were being ghosted because they were wanted to bring the phrase “climate change” with them.
Perhaps instead of talking about climate change, the Prime Minister might instead prefer to talk about a familiar favourite topic like the “budget surplus”? In light of this crisis, and the lessons learned from PG&E, the state of California, and the Australian Business Roundtable, how does his government expect be able to maintain a government budget surplus in the face of increasingly intense and frequent extremes, and the mounting financial risks and liabilities that arise from it?