19 March 2013 — Governments at all levels need to embed consideration of climate change in their risk management practices and ensure there is sufficient flexibility in regulatory and policy settings to allow households, businesses and communities to manage the risks of climate change, a report has found.

The report, Barriers to Effective Climate Change Adaptation, followed a year-long investigation by the Productivity Commission.

It found that Australia’s climate was changing and would continue for the foreseeable future with changes in the frequency, intensity, location and timing of extreme weather events how most Australians will experience climate change.

“Adaptation to these changes, and the effects of more gradual climate change, will occur over time as households, businesses, governments and communities respond to incentives to manage the climate (and other) risks they face,” it said.

“However, a number of policy and regulatory barriers may inhibit adaptation responses, suggesting the potential for government action to improve outcomes for the community.”

The report stated a range of policy reforms would help households, businesses and governments deal with climate variability and extreme weather events.

They included:

  • reducing perverse incentives in tax, transfer and regulatory arrangements that impede the mobility of labour and capital
  • increasing the quality and availability of natural hazard mapping
  • clarifying the roles, responsibilities and legal liability of local governments, and improving their capacity to manage climate risks
  • reviewing emergency management arrangements in a public and consultative manner, to better prepare for natural disasters and limit resultant losses
  • reducing tax and regulatory distortions in insurance markets.

Other actions included designing more flexible land use planning regulation, aligning land use planning with building regulation, developing a work program to consider climate change in the building code and conducting a public review, sponsored by the Council of Australian Governments, to develop appropriate adaptive responses for existing settlements that face significant climate change risks.

The report said measures which should not be implemented, because the costs would exceed the benefits, included:

  • Household insurance subsidies, or insurance regulations that impose net costs
  • Systematically reviewing all regulation to identify impediments to adaptation
  • Mandatory reporting of adaptation actions.

Climate Change and Energy Efficiency Minister Greg Combet said the Government was committed to taking action to avoid dangerous levels of climate change through Australia playing its part in global efforts to reduce carbon pollution.

Assistant Treasurer David Bradbury said the inquiry had received 168 submissions.

The full report and its recommendations are available here.