The bushfire emergency provides a rare glimpse into the economic impacts of runaway climate change.
As bushfires raged hundreds of kilometres away, a pall of smoke descended on Sydney. Commuters donned face masks and respirators as smoke triggered fire alarms in train stations. Unions NSW urged workers to leave job sites due to hazardous air quality readings, and foot traffic fell across the city.
Very rarely are we presented with an opportunity to see into the future. But the smoke that has blanketed the city has given us a good look at the shape of things to come.
Consider the problem of transportation. Ferries were cancelled earlier this week due to smoke, and only one line was furnished with replacement buses. Public transportation is the lifeblood of a financial hub like Sydney, with more than 20 per cent of the city’s population catching it to work. Climate change has the potential to cripple this vital service.
Sydney’s train system is outdated and prone to power outages that require urgent repairs, causing hours-long delays. That’s partly due to the fact that they’re running on antiquated infrastructure that in some cases dates back to the 1920s. While the fires have yet to substantially impact the train system, another climate-related event might: rain.
A report by the National Center for Atmospheric Research in the US predicts that extreme weather events will become more common in Australia as global temperatures rise. “East coast lows”, which bring heavy rain and cyclone-force winds, will pose an ongoing threat to a public transport system that is regularly crippled by fallen trees.
As storms become more devastating and more common, those outages are going to become more devastating and more common too. That’s going to translate to millions of dollars in lost working hours, as well as the cost of constantly repairing and upgrading systems to protect them against worsening weather.
And climate change won’t just impact transport infrastructure. Flooding can outstrip the capabilities of drainage systems and overwhelm water purification facilities by increasing turbidity – the amount of particulate matter in the water – to the point where purification costs become prohibitive.
That’s if there’s any water left – a paper from Environmental Research Letters notes that a mean temperature increase of 2 degrees would severely stress water supplies in a number of Australian cities. That comes with its own challenges as the government struggles to supply households with enough water for the everyday tasks of cooking and cleaning.
Dust storms and heatwaves can also threaten power supplies, either by directly damaging generators and powerlines, or as a result of increased electricity consumption during heatwaves. That has a knock-on effect for nearly every industry in Australia, as well as a massive impact on telecommunications.
What all of this translates to is massive economic impacts across the board. And as the effects of global warming and climate change become more apparent, they’ll also become harder to fight.
The RBA has called on the federal government to take advantage of its low rate environment to boost the Australian economy by investing heavily in infrastructure. If the government does that now, it could kill two birds with one stone – create more resilient infrastructure while pulling the Australian economy away from the edge of recession.
But as ScoMo touts his surplus in Canberra – and fires continue to burn out of control – it’s becoming increasingly clear that the country is now in it for the long haul. Keep those respirators handy.
Stimulate new ideas. Stimulate new thinking. Top up your CPD and hear from industry experts with InvestorDaily’s Knowledge Centre. Keep up to date with the latest trends and reforms, all while adding to your CPD. Explore the knowledge centre Knowledge Centre now.
Despite unemployment falling to pre-pandemic levels, the central bank still thinks it’s too early to count its chickens on the success of ...