This Special report updates and builds on the Australian Business Roundtable for Disaster Resilience & Safer Communities previous estimates of the costs of natural disasters with new, more comprehensive data and extends the analysis to estimate costs under different climate change scenarios. Natural disasters in Australia have devasting financial and social impact on individuals, families, local communities, businesses and governments. A deeper understanding of these costs informs better decision making around investments in resilience, mitigation and post-disaster recovery.
The key findings from the report are:
- Even under a low emissions scenario, the cost of natural disasters in Australia is estimated to increase to $73 billion per year by 2060. This is significantly higher than the $39 billion per year by 2050 reported in 2017.
- In 2020, annual average costs of natural disasters are only 0.02% larger than the low emissions scenario. But under a high emissions scenario – where emissions reach 3° Celsius above pre-industrial levels just after 2060 – the estimated costs per year are $94 billion. That represents a 29% increase relative to the low emissions scenario.
- Even if a low emission scenario is achieved, the cost of natural disasters is forecast to be $1.2 trillion in cumulative costs over the next forty years.
- Two thirds of the costs from natural disasters will be in incurred in QLD and NSW over the next forty years as they become more exposed to tropical cyclones and floods, as warming oceans enable tropical cyclones to move further south.
- Costs in Melbourne and Brisbane will increase significantly, as major rivers in these cities alongside growing populations will lead to greater costs associated with flooding for Melbourne and tropical cyclones and floods for Brisbane.