Taxpayers are picking up most of the tab for Sydney’s climate disasters, with insurers withdrawing from the market and just a fraction of spending invested into making communities climate resilience, a new report has found.
The report from Committee for Sydney has called for better planning and funding allocations to reduce the impact from the growing threat of floods and other extreme weather.
It noted that insurance companies covered just $6 billion of total damages in the east coast floods in New South Wales. By comparison the government sank an estimated $15 billion into uninsured damage – with numbers projecting to rise to $73 billion by 2060. The contrast is the amount spent on resilience – just $510 million in initiatives between 2005-2022. A major review of Australia’s disaster funding arrangements to allocate more funds to climate risk reduction would not only reduce costs but also prevent further damage from climate disasters.
“With each continued disaster, there’s a shift towards more homes that are uninsured – and that means more and more costs being covered by the public purse,” the report says.
Authors Sam Kernaghan, director of resilience program at the Committee for Sydney and AECOM’s sustainability consultant Annalise Kerr and ESG lead Adam Davis said that reducing the number of people at risk of natural hazards and its financial impacts will become the solution to solving the housing crisis.
The launch event for the report on Wednesday garnered a full house with more than 80 attendees at AECOM’s Sydney office. Speakers from a cross section of experts from construction, planning and the resilience sector included Resilience Sydney’s chief resilience officer Beck Dawson.
Others in attendance included Southern Sydney Regional Organisation of Council’s chief executive Helen Sloan, University of New South Wales water expert Stuart Khan, NSW Reconstruction Authority’s adaptation director Hala Hubraq and general manager of Blacktown City Kerry Robinson.
What needs to be done
The report didn’t stop at flooding risk. It noted other challenges could be in store.
“We need to learn from New Zealand, the Netherlands and New York City, places that have been planning for extreme weather for a long time and build the capacity in our communities to cope with whatever comes our way,” the authors said.
While the NSW government and reconstruction authority has attempted to introduce new flood management policies, current policies are not enough and there needs to be better climate risk and strategic land use planning that proactively builds adaptive capacity.
When it comes to creating solutions, three key approaches could be implemented:
- placed-based adaptive planning: which adopts a Dutch approach to help policymakers and communities understand risk tolerance across communities
- climate responsive land use planning: which involves working with communities to create land use planning tools and enable relocation strategies
- collaborative decision-making process: which is essential in ensuring business and community continuity amidst natural disasters and also test individual willingness to live with those risks
The report then delves into 11 key recommendations on how to integrate land use and hazard risk planning, which will better align funding and investment while addressing the residual risks.
The recommendations aim to make climate and natural hazard risk transparent in both land use and community engagement. It also serves to engage the financial services sector in planning for climate risks, develop place-based adaptation pathway on risk tolerance of community and develop statewide policy for managed retreat.
The recommendations are to:
- reduce growing climate risk through the 2023 Six Cities Region Plan
- embed community infrastructure and economy in the state disaster mitigation plan
- establish regional lifeline infrastructure groups
- build collective governance and place-based adaptation pathways through disaster adaptation plans
- support local governments to assess and communicate risk
- focus federal funding on reducing the costs and impacts of disasters
- engage the financial services sector in disaster adaptation planning
- enable IPART (independent pricing and review tribunal) to accelerate climate adaptation
- undertake an integrated strategic assessment for Greater Sydney
- develop an NSW policy and guideline for planned relocation
- evaluate progress towards a more climate adaptive Greater Sydney
Involvements from across the industry
The report, developed through the committee’s resilience program, was supported by Ausgrid, Endeavour Energy, Sydney Water, Resilient Sydney, and AECOM.
The report also included contributions from more than 30 organisations, institutions, government bodies, councils, and companies, with AECOM, Resilient Sydney and IAG being the primary three partners.
A record number of more than 250 people have registered for the online briefing on Friday 20 October, which will be conducted by the report authors, according to a Committee for Sydney spokesman.
Register here.