"Australians
have focused a lot on the transition risks
of climate change: focusing on the impacts that
different carbon abatement policies will have on
the economy and on communities in an effort to reduce
emissions. But we focus much less on the physical
impacts of climate change which are already
occurring and, on current projections, will continue
to worsen.
Why
is this? One reason is data. There are many datasets which have been
used to analyse the impact of different carbon abatement policies.
The same cannot be said for adaptation.
This
is the core innovation of the Zurich Resilience Solutions (ZRS)
capability. By mapping the physical risks of climate change across
every 10 square meters in Australia, it provides unparalleled
insights into the tangible impacts of climate change on different
assets and
locations."
["The
Zurich-Mandala Climate Risk Index: The impact of climate change on
the Australian tourism industry",
September 2024]
For the last two decades science has been telling the Australian general public that flood, rain,
wind, storm, hail, heat, drought and bushfire are the horsemen of
climate change and they are upon us now - not arriving some time in a
distant future. Now the insurance industry is pointing to this fact of life.
The
Zurich-Mandela risk report released this month looks at the effect
climate change will have on Australia's natural and manmade tourism
assets.
Given
the degree to which tourism underpins local economies and the wider NSW Northern Rivers regional economy generating as it does up to $1.6 billion annually
supporting est.14,416 jobs, this is a serious issue for the far north, its seven local government areas and the estimated
315,775 men, women and children who live there.
The
Northern Rivers tourism industry is known to be vulnerable to
externalities. Since
2018, flooding and bushfires have damaged natural amenity and
infrastructure, while COVID-19 restrictions reduced visitation and
spend in the region, with total visitor expenditure in 2021 down $423
million on 2019 levels.
[Dept.
of Regional NSW,
Northern
Rivers Regional Economic Development Strategy – 2023 Update]
~~~~~~~~~~~~~~~~~~~
Zurich
Insurance Group,
media
release,
7 September 2024:
Zurich
and Mandala release first Climate Risk Index for the Australian
tourism sector
9
September 2024
Zurich
Financial Services Australia (Zurich) and Mandala Partners (Mandala)
today released Australia’s first Climate Risk Index for the
Australian tourism sector.
Utilising
Zurich’s global exposure analysis capability, the report analyses
the impact of climate change on Australia’s top tourism sites –
including major airports, national parks, beaches and museums –
under different Intergovernmental Panel on Climate Change (IPCC)
scenarios.
The
Index – the first comprehensive, quantitative climate assessment of
its kind for Australian tourism – finds that currently, half of
Australia’s tourism assets are in an elevated risk category, facing
considerable climate and natural peril risk.
This
is set to rise to between 55 and 68 per cent of Australian tourism
sites by 2050 under either an intermediate (two degrees Celsius of
warming by 2041-2060) or extreme (three degrees) IPCC future climate
scenario respectively. Under the more extreme scenario, 80 per cent
of tourism sites will experience an increase in risk between 2025 and
2050.
Australia’s
tourism industry plays an important role in the nation’s economy,
contributing more than $170 billion in annual expenditure and over
620,000 jobs.
In
terms of economic impact, around 30 per cent (up to 176,000) of these
jobs nationally could be jeopardised – 65 per cent of which are
outside our capital cities – in the event of a disaster scenario
similar to that experienced following the bushfires of 2019-20.
The
analysis also reveals that climate risk varies significantly by
geography and site type (natural or man-made).
Queensland
has both the highest number of sites facing elevated risks (79 per
cent) and the most sites in the highest risk category (52 per cent)
compared to any other jurisdiction. After Queensland, Western
Australia and the Northern Territory have 69 per cent and 63 per cent
of sites in the highest risk categories, respectively. Across the
southern states, the risks were relatively lower.
By
site category, the Index finds that all 31 of the busiest airports in
Australia fall into the highest climate risk categories, including 94
per cent in the most extreme category, due to their geographic
location and susceptibility to perils such as wind and storms.
Similarly,
all of the analysed wine growing regions, botanic gardens, scenic
roads & rail, and rainforests & national parks were found to
be in the highest climate risk categories. Natural geological
formations, museums, galleries and stadia face relatively lower risk.
Justin
Delaney, Chief Executive Officer, Zurich Australia & New Zealand,
said: “Australia’s tourism assets not only play a significant
role in an increasingly diverse visitor economy but are collectively
central to our national identity.”
“This
analysis, conducted in partnership with Mandala, serves to highlight
the critical importance of improving resilience across our tourism
assets, both to ensure the sustainability and longevity of these
sites and to minimise downstream economic impacts – particularly in
regional areas – on employment, business formation, consumption and
investment.”
“More
broadly, it also serves to highlight the quantum of data and insights
that are available to understand the prevailing risk environment in
order to shape and prepare our collective response,” Mr Delaney
said.
Adam
Triggs, Partner, Mandala Partners, said: “In Australia, we have
focused a lot on how to reduce carbon emissions but have focused less
on how to prepare for the physical impacts of climate change that we
are already seeing: tourist attractions destroyed by bushfires,
tourism sites made inaccessible by floods, man-made attractions
damaged by hail and airports closed because of extreme winds”.
“A
key reason for Australia’s more limited focus on the physical
impacts of climate change is a lack of data, and this is exactly the
gap that our partnership with Zurich seeks to fill,” Dr Triggs
said.
The
release of the Climate Risk Index for the tourism sector builds upon
and follows a similar analysis by Zurich and Mandala on the climate
risk facing the Australian energy generation sector in November 2023,
the first assessment of its kind for an entire critical
infrastructure asset class.
A full version of the report is available here.
-ENDS-
~~~~~~~~~~~~~~~~~~~
Excerpts
from the Zurich-Mandela report.
Source:
Zurich Resilience Solutions using Jupiter Intelligence’s
ClimateScore Global 2.6; Mandala analysis
Despite
more natural sites facing climate risk overall, the proportion of
man-made sites facing severe risk is higher
The
Zurich-Mandala Climate Risk Index found that currently, 55% of
natural tourism sites in Australia face climate risk. Of these sites,
14% are in the highest risk category, a further 23% are in the second
highest category and 17% are in the third highest.
Most
natural sites in Australia are either national parks, rainforests
or beaches. These sites face significant risk from floods, storms and
bushfires due to the potential for environmental degradation, which
can permanently alter these sites. Extreme weather can also result in
seasonal shifts, disrupt ecosystems and impact tourist visitation
patterns.
Despite
a higher volume of natural sites showing vulnerability
to climate change overall, the proportion of impacted man-made sites
facing severe risk is higher. Just under half of all man-made assets
fall within the top three risk categories, with one quarter of these
in the highest risk category. The most at-risk man-made sites are
vineyards and airports, which face significant risk from heat,
bushfires and flooding. Likewise, scenic roads (including bridges)
and railways face significant risk....
In
the 25 years from 2025 to 2050, the proportion of Australia’s
tourism sites in the three highest climate risk categories will rise
from 50% to 55%. Sites in the highest three risk categories are
likely to face significant risk from multiple perils with a high
impact on environmental degradation, tourism functionality and
appeal, accessibility, and ecosystem balance (i.e. a national park
with a ‘high risk’ from storms and a ‘very high risk’ from
heat).
Under
the more severe SSP5-8.5 climate scenario, which assumes little or no
climate action and up to three degrees of warming by 2041-2060, 80%
of sites will see an increase in risk between 2025 and 2050. Under
this scenario, 68% of all sites will be in risk category 3 or above
by 2050.....
.webp)
