Climate disaster costs to hit $73bn by 2060: Deloitte Access Economics
Deloitte has warned insurance costs are set to explode as extreme weather worsens natural catastrophe damages.
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Australia’s largest insurer has warned Australia risks a catastrophically expensive future, with natural disasters set to cost the country $73bn a year by 2060.
Natural disasters cost Australians $39bn a year, but Deloitte Access Economics has warned without steps to keep global warming below 3C the country risks a massive explosion in damage.
The Deloitte special report, commissioned by the Australian Business Roundtable for Disaster Resilience & Safer Communities, seeks to understand the cost of natural disasters.
The report warns if temperature rises are not contained Australia risked a $94bn cost each year from natural disasters arising from climate change, noting “a low emissions scenario is increasingly unlikely”.
The $73bn bill, at the low end of cost estimates, is a dramatic step up of insurance costs in estimates by the insurer.
A 2017 roundtable report had previously forecast insurance claims costs of $39bn by 2050.
But the report released on Wednesday finds the cost of natural disasters under a higher emission future is set to soar.
The increased potential cost is due to an updated cost modelling tool developed by IAG.
The new data covers both insurable and uninsurable losses, as well as smaller natural disaster events not captured in the current database maintained by the Insurance Council of Australia.
“There are, of course, many other costs from natural disasters beyond property damage,” the report’s authors note.
The report warns southeast Queensland and northern NSW are the most heavily endangered parts of Australia due to a combination of worsened potential disasters including bushfires, floods, and cyclones.
“Queensland will account for nearly 40 per cent of national costs. New South Wales follows, with an estimated increase of $31bn in costs if the high emission scenario eventuates,” the report warns.
“Together, these states will contribute more than two-thirds of total national costs under all emissions scenarios.
The potential for massive and highly damaging floods in Melbourne and Brisbane, due to the city’s respective rivers and urban waterways bursting their banks, is highlighted.
“Growing populations will lead to greater costs associated with flooding for Melbourne and tropical cyclones and floods for Brisbane,” the report said.
NSW and south east Queensland recently experienced large floods in areas with growing populations.
The March floods, which saw 56,000 claims filed costing at least $651.6m destroyed homes across the states.
The report calls for governments to “rise to the challenge and integrate natural disaster resilience into the future planning for Australia’s cities and regions”.
Originally published as Climate disaster costs to hit $73bn by 2060: Deloitte Access Economics
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