While flooding, bushfires and storms are a familiar part of life for many Aussies, climate change has been been making these even worse and that’s having real world consequences.
Regions will likely become unaffordable as insurance agents and mortgage holders protect themselves against the threat of worsening extreme weather.
Climate Risk's Dr Karl Mallon advises governments, utilities, and the private sector on the risks associated with climate change, and spoke to Yahoo News Australia about the impact changing weather will have on our regions.
He suggests the private sector is well aware of Australia's most at risk suburbs, and are likely already considering climate change when thinking about how to price products like insurance, or 30 year mortgages.
There are anecdotal reports that lenders have declined financing for high risk properties overseas, and that in Australia flood and fire protection premiums have increased or become unavailable to some.
“People should not be fooled by the politics around this, the private sector is well on top of this issue,” Dr Mallon said.
“They are sitting on this data and to some extent… in my view, they've been looking to government to provide guidance on things like adaptation and reducing these risks.
“They know which are the high risk suburbs and they can’t carry on indefinitely pretending (climate change) isn’t an issue.”
Regions that could be hardest hit by climate change:
To better understand the cost of climate change, analysts have used computer modelling to examine climate risk, comparing various scenarios to regions across the world.
A number of regions across Australia have been identified as facing pressure from climate change.
Central Coast, NSW (Flooding, forest fire, coastal inundation)
Illawarra, NSW (Coastal inundation)
Gold Coast, QLD (Flooding, coastal inundation)
Sunshine Coast, QLD (Forest fire, coastal inundation)
Bayside and bushfire prone suburbs, Vic (Coastal inundation and bushfire)
West Lakes, SA (Flooding, coastal inundation)
Suburbs south of Perth, WA (Coastal inundation and coastal erosion)
Percentage of Aussie properties likely to be affected.
Following dire warnings by the UN’s IPCC report, many climate risk assessors are remodelling aspects of their advice to lenders.
Dr Mallon's concerns have grown since IPCC report on climate change was released this week, particularly when it comes to their predictions on rising sea level.
He estimates that five per cent of properties are “materially at risk” from extreme events, and that over the next few decades this figure could double.
“Unfortunately, the IPCC report is saying things are probably happening at the upper end of our estimates," he said.
“Things are happening earlier, and the window to avoid tipping points is closing.”
Dr Mallon warns as lenders and insurers are bound by fiduciary responsibility, if they do not see governments adequately tackling climate change, there will be consequences at the hip pocket for property owners.
“If they don't believe that the international community is serious about solving the problem, then we're going to start to see that reflected in risk premiums, mortgage unavailability, and unfortunately, people getting impacted directly in terms of physically and financially,” he said.
What you need to know about the IPCC report
What is the likely impact on insurance?
While many properties will not be directly affected by increased insurance premiums, Dr Mallon believes rising temperatures will make a number of suburbs “unpleasant places to live”.
Some people will only see small increases in their insurance premiums, but others in high risk areas could be hit with unaffordable insurance premiums as high as $30,000 a year, he predicts.
There will be some properties that will be unable to get coverage for certain hazards.
“Without assistance for adaptation, some areas are going to be impacted at a community level,” Dr Mallon said.
“There will be towns, suburbs, and so on, where it's going to be very difficult to get insurance, and it’s going to be very difficult to sell your house.”
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