ICA estimates Australian governments will need to invest $30 billion in coastal protection and adaptation
The Insurance Council of Australia (ICA) estimates that Australian Governments will need to invest $30 billion in large scale coastal protection and adaptation projects over the next 50 years, as climate change makes coastal communities, property, and infrastructure increasingly vulnerable.
Climate change is driving rising sea levels and exacerbating coastal hazards known as ‘actions of the sea’ such as tidal inundation, coastal and estuarine inundation, coastal erosion, and shoreline movement.
A report, prepared for the ICA by Baird Australia, has found that as these events increase in frequency and intensity, a growing number of exposed properties in Australia will become uninhabitable.
The June 2016 storm that eroded the beach and private land on Sydney’s Northern Beaches is a stark example of this phenomena, with the almost completed mitigating infrastructure costing the local government and homeowners an estimated $25 million.
Insurance cover for actions of the sea is generally not available because of the inherent risks and is further constrained because of the growing risks from climate change impacts.
With insurance largely unavailable, the report recommends building greater protections for communities exposed to actions of the sea through three areas of activity and investment:
- Investment in coastal protection infrastructure where these can be shown to be economically and environmentally feasible
- Improved and coordinated data collection by local, state and federal governments to build a comprehensive picture of the scale of the problem
- Land use planning that considers actions of the sea, including in some cases making difficult decisions about the long-term viability of existing communities or property
ICA CEO Andrew Hall commented: ”Legacy planning decisions by Australian governments have left some coastal communities, homes and infrastructure highly vulnerable to actions of the sea like tidal inundation and coastal erosion.
It’s estimated that over the next 50 years governments will need to invest at least $30 billion in large scale coastal protection and adaptation projects as climate change makes actions of the sea worse.
Insurers are generally not able to cover ‘actions of the sea’ because of the nature of the risk, but we can improve protections for communities and property owners by raising awareness of the risks, improving data and understanding, and advocating for investment in mitigation and adaptation projects.
It comes as thunderstorms in South Australia, Victoria and Tasmania in late October caused widespread damage. Total economic and insured losses were each estimated at more than $100m, according to Aon.
Brian Kerschner, senior catastrophe analyst for Aon’s Impact Forecasting team, said: “[The] storms prompted an insurance catastrophe for multiple states. Most of these losses were due to large hail, which again reinforces the need to promote more resilient construction practices in known high-risk areas.”