Infrastructure protectionAustralians told sweeping economic, societal changes needed to cope with severe weather

The Australian government’s Productivity Commission has just released its much-anticipated report, titled Barriers to Effective Climate Change Adaptation. The report calls for sweeping changes across the Australian economy, including ditching property taxes which discourage people from moving out of areas prone to extreme weather events.

The Sydney Morning Herald reports that the commission, accepting that some degree of climate change is now inevitable, says that Australia will need to adapt. This means removing obstacles in the areas of taxation, local government, disaster relief, planning and building rules, and emergency management.

The commission summarized the key points in its report:

• The weight of scientific evidence suggests that the climate is changing and will continue to do so for the foreseeable future.
• Australians would need to adapt to the impacts of a changing climate, notwithstanding current and future efforts to reduce global greenhouse gas emissions.

— Adaptation encompasses actions by households, businesses, governments and communities.
— Within limits, the impacts of gradual climate change should be manageable. Few systemic barriers to climate change adaptation have been identified and Australians have a long history of coping with climate variability and structural change.
— Uncertainty surrounding changes to the frequency, intensity, location and timing of extreme weather events requires a risk management approach to adaptation.

• Policy reforms that would help people, firms and governments deal with current climate variability and extreme weather events should be prioritized. These “no-regret” or “low-regret” reforms would deliver benefits and build adaptive capacity for responding effectively to future impacts. Examples include:

— reducing perverse incentives in tax, transfer and regulatory arrangements that impede the mobility of labor and capital
— improving information on climate risks by 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
— improving emergency management arrangements
—- avoiding regulatory distortions in insurance markets.

• The case for implementing reforms now to address barriers to adaptation to uncertain future climate trends is less clear.

— For reforms with low up-front costs and potentially large but distant benefits some preparatory action could be worthwhile. The case is stronger for reforms that would deliver benefits under a range of climate change scenarios. For instance:

— producing and disseminating localised (downscaled) climate projections
— designing flexible planning regulation to respond to uncertain climate change impacts
— developing approaches to managing risks to existing settlements.

• Where measures have high up-front costs, there is likely to be a benefit to the community in deferring action until better information becomes available.
• Some individuals and certain communities are likely to face greater challenges in adapting to the impacts of climate change. In the main, the tax and transfer system can help these groups adapt to the impacts of gradual climate change.