My climate change and financial risk policy – don’t shoot the messenger!

I’m not an alarmist – I am alarmed by the data and what it means for you and your asset

I want to be in a position to remind decision makers of the legacy they leave behind beyond a political tenure. We are entitled to trust decision makers are acting in the public interest as we go about our busy lives paying rates and taxes.  For this reason, we need to be concerned about the effects of climate change.  We have the capability among Council staff to build a considered long-term policy on how we deal with the effects of climate change, and the future reality needs to be explained and discussed with the community.

These legacy decisions are supposed to be based on best available science, I am concerned that currently, this is not happening or we would not be seeing the types if development approvals that we are currently seeing. State legislation supports my position and State Planning Policy (SPP 01/16) states very clearly that decisions should “be made on best available science” – it also states, “IPCC is considered best available science”.

I closely follow the work of the Australian Coastal Society and attended their two day conference in August last year. The following ‘policy position’ below, is reflected in the three minute Gold Coast news bulletin for those who are time poor:

This is not about my opinion. This is not about your opinion, and it is not about the personal opinion of decision makers. Personal opinion is irrelevant – as I am repeatedly stating:

“it is irrelevant if you personally believe in climate change or not –
Banks do, Insurers do, and so do our governments who write policy that affects the economy,
your daily life, and your assets”

Economy – what does the maths say?

 IPCC projections are legally considered ‘best available science’, and this is where the 0.8 sea level rise (SLR) figure is derived and reflected in local hazard risk mapping found in our SCPS 2014.

These local hazard risk maps are used by insurers and banks to assess the risk of insuring or lending around various assets such as houses. The attached figures and link spells this out for you, and for the banks and insurance companies who rely on them to assess risk.

We are at the pointy end

The life of an average mortgage is 30 years. With risk mapping (inundation as result of SLR) modelling to 2050, just 30 years from now, we are at the pointy end of lending – suddenly a 30 year mortgage is becoming a ‘risky financial product’. Banks are risk averse by nature, and the problem is, once you realise you have problem and you want to cut your losses and sell – you will need a buyer, and your buyer will likely need a bank. The bank will do a risk assessment, and the bank will need an insurance policy to ensure the asset is a safe investment.

Insurance policies are updated every 12 months, and all insurance policies are entered “in the utmost good faith”– as climate change projections and hazard mapping is updated, so too are insurance policies and premiums. The higher the risk, the higher the premium – to the point we are seeing ‘un-insurability’. For example, YOUII will not insure post code 4564 because the risk is too great. We have seen flood risk premiums increase from $1,600 p/a to $7,800 p/a over only 12 months.

What are the solutions?
    • Engineering defence structures such as sea walls
    • Protect and defend public and private assets
    • Policy creation to explore equitable outcomes for residents such as;
      a) resumption / acquisition / compensation,
      b) managed retreat,
      c) funding for defence structures,
      d) funding initiatives regarding insurance for residents in already vulnerable at risk zones
      e) strengthening our planning instruments to mitigate and acknowledge the risks
Questions Arising
    • Do we want a vast sea wall from North Shore up to Coolum and beyond?
    • Our beaches and meandering dunes will be a thing of the past in this scenario – do we want to lose our wetlands and our beaches?
    • Where will turtles nest?
    • Where is the vulnerable (v) Water Mouse saltmarsh habitat ‘retreat path’?
    • Where will the migratory birds rest and feed without carbon sequestering mangroves and declared fish habitat?
    • Do we want more public and private assets such as Sekisui and Twin Waters West which all come with public infrastructure upgrades, that will all require; defence, compensation, decommissioning and the like?

Assets at Risk from Sea Level Rise in Queensland:
– $15-$20 billion worth of residential buildings at risk (44,000 – 68,000 residential buildings)
– $10-$15 billion worth of commercial buildings at risk
– $1.3-$2.0 billion worth of light industrial buildings at risk
– $9.7-$12.9 billion of roads at risk
– $1.7-$2.3 billion of rail and tramway at risk

[SOURCE: Climate Council report, Sept 2014.]

Where will the money come from required to defend and protect these assets? The public purse, and we have consistently had rate increases and currently we already have the second highest rates in SEQ.

These are big decisions being faced in Division 8, and indeed all coastlines everywhere. Business as usual is not sensible, sustainable nor visionary given what we know – and when we know better, we are supposed to do better – aren’t we?

There will be some winners and some losers.


Read my full policy here: