Climate change has already made Australians in one State much poorer, and more’s to come - The Conversation

The Conversation - Timothy Neal  Ben Newell

Rachel Claire/Pexels

Authors

Timothy Neal Senior lecturer in Economics and the Institute for Climate Risk and Response, UNSW Sydney Ben Newell Professor of Cognitive Psychology and Director of the Institute for Climate Risk and Response, UNSW Sydney

The world’s hottest years over the past decade have coincided with stagnant economic productivity, rising prices and geopolitical instability.

Is this just coincidence or has the current level of climate change been one of the drivers? Climate change is often framed as a problem for the future. But how much economic damage has today’s current level of ~1.35°C of warming already caused?

To answer that question, we analysed the effects of climate change to date on the New South Wales economy. The results were released today as part of a Net Zero Commission report.

We estimate climate change has already caused median losses of around 18% (probability range 4–33%) to the NSW economy, the biggest economic jurisdiction in the country. At a median 18% loss, that translates to about A$21,300 per person on average in yearly income.

We show that it’s not local bushfires or flooding that are driving the majority of damage, but changing global weather that in turn affects our cost of living.

Imagine a world without climate change

Studies typically project the global economic damage that climate change will do by 2050 or 2100.

Some influential estimates have suggested climate damage would be fairly small. But our recent research and work by others shows the economic damage coming down the pipeline could be more than four times larger than previously thought.

Our research question for this report was different: “What would the NSW economy look like today if historical emissions of greenhouse gases had not caused climate change?”

This requires a thought experiment: imagining a past where we burn fossil fuels at the historical rate, but the additional carbon dioxide and other atmospheric gases do not cause changes to temperature or rainfall patterns.

Answering this question will allow us to understand the economic losses we have already endured from historical climate change.

How we did it

First, we collected data on historical economic growth and weather across the world over the past 70 years. We then modelled how weather changes (or shocks) impacted economic growth over this period. There is significant debate on how to do this, so we adopted a variety of approaches. 

Then we had to plausibly guess at how the weather would have evolved in the past four decades without climate change. To create this hypothetical weather series, we simply removed any trend found in the weather data which we ascribe to human-caused climate change. This works because there is no evidence natural causes have contributed to the upward trend in temperatures. 

                                                                         Global average temperature
Red line is actual or observed temperature. The black line is de-trended or counterfactual temperature, which is the predicted temperature if the human-caused climate change signal is removed.

Chart: The Conversation Source: Timothy Neal, Ben Newell
Get the data Embed Download image Created with Datawrapper

 Finally, we compared economic growth rates predicted by the models under the observed and under the hypothetical weather conditions. The contrast between the total economic production of the NSW economy in the two scenarios is the economic cost of historical climate change for a given year.

                                                                         NSW average temperature
Red line is actual or observed temperature. The black line is de-trended or counterfactual temperature, which is the predicted temperature if the human-caused climate change signal is removed.

Chart: The Conversation Source: Timothy Neal, Ben Newell
Get the data Embed Download image Created with Datawrapper

What we found

We estimate the median economic loss for NSW in 2024 was 18%. There is significant uncertainty in this figure, with the lower estimates around 4% and the higher around 33%.

The median loss figure of 18% translates into an average of $21,288 in losses per person in yearly income (in 2023–2024 dollar values). In other words, the model finds that if historical warming had not occurred then people living in NSW would each have $21,288 more dollars, on average, in their pockets every year. This amount is large enough to meaningfully improve the quality of life of the state’s average household.

The models suggest the primary mechanism through which this loss has occurred is the rise in the global average temperature. When people think about losses associated with climate change in NSW, they might consider how climate change exacerbated the bushfires of 2019–20, or the floods that followed. The damages they caused are, of course, real and significant.

However, the economic models suggest the majority of the damage has come from shifts in weather globally. Given the interconnectedness of modern economies through trade and global supply chains, it is reasonable to assume that climate shocks to supply chains affect the whole globe.

The interconnectedness of the global economy can be seen in the downturn following the US-Israel war with Iran and the halt to shipping in the Strait of Hormuz. Eric Seddon/Pexels, CC BY

How we think about climate change

When pollsters ask Australian voters what issues they care about, “climate change” is often listed as one issue among many. Voters are asked to assess how important climate change is to them relative to the cost of living, public health, interest rates, secure employment, and other important things.

Presenting issues in this way reinforces a common misconception that they are independent, and that one can be prioritised over the other.

To the contrary, there is now good evidence that climate change is strongly related to economic outcomes, which in turn drive the cost of living, interest rates, investment in in health and education and the labour market.

It’s time to stop thinking of climate change as “merely” an environmental issue, which can be discarded when economic times are tough. Instead, we should recognise what it really is: a current and ongoing threat to our standard of living.

The Conversation Climate Change Articles

• A very strong El Niño may be approaching. Here’s what it could mean for the world’s weather
• Scientists have scrapped the worst‑case climate scenario – because action is making a difference
• Why the phrase ‘Super El Niño’ makes Australian climate scientists roll their eyes
• Dramatic changes in upper atmosphere are responsible for recent droughts and bushfires: new research
• We eat a lot of wheat. So how can we grow more in a changing climate? 
• Overheated cows, flooded highways, and now a fuel crisis: why Australia’s food system is in big troubl
• Searching for a ‘technofix’ to climate change has many dangers. Could radical humility save the planet? 
• Climate change means more landslides in NZ – but new tech can help reduce the risk 
• The carbon tax debate damaged Julia Gillard’s leadership – and good climate policy for years to come 
• What Australians really think about climate change
• People around the world will act on climate change to create a better society: study
• How well does the new Australian Curriculum prepare young people for climate change?
• Climate explained: why some people still think climate change isn’t real 
• ‘I tend to be very gentle’: how teachers are navigating climate change in the classroom

Back to top

Burning for Credits: How Corporate Carbon Is Colonising Australia's Ancient Fire Knowledge - Lethal Heating Editor BDA

Australia's carbon credit scheme earns tens of millions from Indigenous burning
while questions grow about who controls Country

Key Points

Savanna fire projects cover 330,000 square kilometres of northern Australia and have generated over 13 million ACCUs. 1 The WALFA project in west Arnhem Land reduced wildfire emissions by 37.7% over its first seven years. 2 Annual revenue from savanna burning reaches approximately $50 million AUD for Indigenous communities. 3 The 2022 Chubb Review found the ACCU scheme sound but critics raised transparency and Indigenous rights concerns. 4 The Lancet found Indigenous communities face "carbon pirates" and agreements biased toward corporate actors. 5 European-era fire suppression broke traditional burning cycles, creating fuel loads that now drive catastrophic wildfires. 6

Near Elliott in the Northern Territory, Mudbarra Country spreads across 2,845 square kilometres of sub-tropical woodland. 

Senior traditional owner Janey Dixon describes fire as something ancestral rather than agricultural. "Our ancestors are following us when we light the fire," she has said.

The Karlantijpa Savanna Burning Project has operated on Mudbarra Country since 2015. It now generates income through the sale of Australian Carbon Credit Units. ⁷

Traditional owners conduct surveys, plan early dry-season burns and bring younger members onto Country. On the surface, the arrangement looks like a policy success. Dig further and the picture fragments.

A structural tension has solidified inside Australia's carbon market. Aboriginal communities possess the oldest continuous land management knowledge on earth. A federal scheme has assigned that knowledge a dollar value, a methodology and an audit calendar.

The question pressing on researchers and land councils is whether the market has captured cultural burning. Or whether cultural burning is using the market on its own terms.

What the Fire Actually Does

European colonisation carried a conviction that fire was the enemy. Pastoral and park management suppressed burning, breaking cycles maintained for millennia. Vegetation grew thick. The fuel accumulated. When fire arrived, it arrived catastrophic.

Three decades of ecological science confirms what traditional owners had always practised. Early dry-season burning disrupts fuel continuity that allows late-season wildfires to run. ⁶

The savanna biome produces 86 per cent of all fire events on the continent. It contributes 10 per cent of Australia's total carbon emissions annually. Shifting burning to the early season reduces both greenhouse gas output and biodiversity loss.

The evidence base is anchored in west Arnhem Land. In the mid-1990s, Aboriginal landowners and researchers produced the West Arnhem Land Fire Abatement project. WALFA covered 28,000 square kilometres and became the world's first savanna burning abatement initiative.

WALFA reduced wildfire-related greenhouse gas emissions by 37.7 per cent over its first seven years. ²

The result rewrote how the carbon market understood land management. It created the template for every subsequent savanna burning project in Australia.

WALFA is now managed by ALFA, Arnhem Land Fire Abatement, an entirely Aboriginal-owned company. Traditional owners created it to control their own engagement with the carbon industry. It supports fire projects across more than 80,000 square kilometres of Arnhem Land.

The structure matters. Ownership by traditional owners defines what flows where. It also defines who retains authority over burning decisions.

The Bureaucracy That Controls the Match

The legal terrain for cultural burning remains jagged across Australia. Fire management acts, parks legislation, native title conditions and tenure rules create overlapping jurisdictions. Each is capable of blocking a planned burn.

Liability insurance requirements compound the problem. Most Indigenous ranger groups operate with limited, inconsistent government funding. Insurance costs on certain tenures can exceed what communities can afford.

The legal right to manage Country and the practical ability to do so sit in different places.

The Central Land Council supports fire management across more than 417,000 square kilometres of Aboriginal land. Their program combines customary knowledge with contemporary techniques. Burns follow mosaic patterns across spinifex sandplains during cooler months. ⁸

The CLC has been clear that burning happens because of obligation to Country. The carbon revenue follows rather than leads. That distinction carries weight.

Cultural burning follows seasonal, ceremonial and ecological cues that resist precise scheduling. Carbon accounting requires fixed windows, documented evidence and regular audits. Communities face a choice between burning right and burning in a way the audit accepts.

Thirteen Million Credits and Counting

By April 2024, 81 projects had registered under the ACCU scheme's savanna fire management methods. Together they generated over 13 million ACCUs. ¹

That figure represents nearly 10 per cent of all ACCU issuances. Savanna burning ranks as the fourth largest method by credit volume. Projects now span more than 330,000 square kilometres of northern Australia.

Annual revenue reaching Aboriginal and Torres Strait Islander communities sits at approximately $50 million. ³

Where communities own and control their carbon enterprise, money flows toward self-determination. Where they participate as junior parties under external aggregators, the calculation changes.

Revenue splits between communities, proponents, aggregators and brokers remain opaque. The Clean Energy Regulator's register records methodologies and ACCU issuances. It does not record what proportion of proceeds reaches the community whose Country is being burned.

The Chubb Review in 2022 called for greater transparency across the scheme. It left the question of Indigenous revenue distribution without a precise resolution. ⁴

In August 2025, the federal government released two updated savanna fire management methods for public consultation. The new methods incorporate the Savanna Carbon Accounting Model and credit both avoided emissions and enhanced biomass recovery. ⁹

The Emissions Reduction Assurance Committee assessed the drafts as meeting offset integrity standards. Whether the new methods address structural power imbalances inside project agreements remains an open question.

Colonisation by Contract

Research in The Lancet Planetary Health in 2025 described a troubling global pattern. Indigenous communities entering carbon markets face agreements biased toward corporate actor benefits. ⁵

The paper identified "carbon pirates" who register projects without genuine free, prior and informed consent. Anticipated financial benefits sometimes fail to reach communities. Exploitation generates conflict between communities and project developers.

Australia's savanna burning program is frequently cited as a positive exception. ALFA in Arnhem Land does represent something different from the pattern The Lancet describes. But ALFA developed over decades with meaningful Aboriginal agency at every stage.

Replication requires those same conditions. Where communities hold weaker tenure or projects arrive through external proponents, authority and income distribute differently. Long contractual lock-in periods can extend beyond any government funding horizon.

Internal conflict over carbon revenues has surfaced as a recurrent problem. Project structures that recognise one corporation can leave other family groups outside the revenue stream. Litigation at community cost against well-resourced proponents rarely reflects the true complexity of traditional ownership.

What the Audit Cannot Measure

The carbon accounting framework reduces fire to tonnes avoided, seasons documented and satellite coverage verified. It was designed to produce fungible credits that governments and corporations can trade. Cultural burning is about relationship, obligation and knowledge transmission, not carbon arithmetic.

Elaine Sandy, director of Jinkaji Aboriginal Corporation, described the Karlantijpa project this way: "We are bringing together the wisdom of both ways of teaching, our way and kardiba way." The phrase holds two complete knowledge systems in productive tension.

The Chubb Review found the overall ACCU scheme sound. It called for improved data sharing but resisted claims of systematic overstatement. ⁴

Independent researchers and the Australian Conservation Foundation pointed to "gaping holes" in governance. The 2026 savanna methods incorporate SavCAM modelling and updated science. Independent longitudinal monitoring on carbon-funded Country, with genuine data sovereignty for traditional owners, remains limited.

CSIRO holds Australia's deepest fire ecology research capacity. Budget pressures and staff reductions have constrained its independent monitoring capability. Where that independence weakens, the integrity of the credit scheme weakens with it.

The Funding Question the Market Avoids

Sean Appoo of the Aboriginal Carbon Foundation put the tension plainly at the 2025 Australian Sustainable Finance Summit. Investment in cultural burning remains insufficient, "coupled with unstable political conditions." Corporate leaders hesitate. Politicians cycle through commitments.

The carbon market bypasses that instability. But it does so by making cultural practice legible to accounting systems built without Aboriginal people in mind.

The Indigenous Land and Sea Ranger program funds rangers including for burning work. Funding per ranger, against the costs of managing vast remote Country, leaves most programs stretched. ¹⁰

Without a dedicated federal funding stream for cultural burning, communities face a stark choice. Engage with the ACCU system on available terms, or watch Country go unmanaged.

Indigenous-led policy groups have argued for structural reforms. Stronger consent requirements, guaranteed community revenue thresholds and legal categories for cultural burning are among the proposals. Direct public funding for ranger programs, at sufficient scale, would remove the pressure to enter carbon markets for survival.

A Choice the Country Should Make

The Australian savanna burning program has done something genuinely significant. It channelled real money to Aboriginal communities and restored burning practices that suppression policies had destroyed. Emissions fell across some of the continent's most fire-prone landscapes.

The WALFA-to-ALFA trajectory, from research partnership to Indigenous-owned enterprise, deserves its prominence in policy literature. It does not resolve the structural questions.

Cultural burning exists because of obligation to Country. It carries ceremonial dimensions resistant to documentation. A framework demanding fixed windows and satellite verification sits awkwardly against that reality.

When market requirements bend the practice toward what a methodology can measure, something changes. The fire still burns. Whether it remains cultural burning, beyond a commercial sense, depends on who holds the match.

The 2026 method reforms are a material step toward scientific rigour and Indigenous inclusion. They arrive as Safeguard Mechanism demand for offsets rises, pressuring communities into agreements before governance frameworks are ready. Faster, better-funded and genuinely sovereign alternatives remain the work ahead.

References

1. Clean Energy Regulator. (2024). Traditional Indigenous savanna burning practices in Kakadu National Park. Australian Government.

2. Frontiers in Forests and Global Change. (2022). Diffusion of Indigenous fire management and carbon-credit programs: Opportunities and challenges for scaling-up to temperate ecosystems. Frontiers Media.

3. Ecology Law Quarterly. (2024). Cultural Burning Can Mitigate Climate Change and Produce Income for Native American Tribes. UC Berkeley School of Law.

4. Department of Climate Change, Energy, the Environment and Water. (2022). Independent Review of Australian Carbon Credit Units. Australian Government.

5. The Lancet Planetary Health. (2025). Carbon markets: a new form of colonialism for Indigenous Peoples?. Elsevier.

6. ScienceDirect. (2015). Indigenous benefits and carbon offset schemes: An Australian case study. Environmental Science and Policy, Elsevier.

7. Indigenous Carbon Industry Network. (2025). Karlantijpa Savanna Burning. ICIN.

8. Central Land Council. (2023). Managing Threats: Fire Management across Central Australian Aboriginal Land. CLC.

9. EcoVoice. (2025). Public consultation opens on new savanna burning method. EcoVoice Environment News Australia.

10. The Indigenous Business Review. (2025). Aboriginal Carbon Foundation calls for private investment in First Nations-led climate projects. IBR.

11. Arnhem Land Fire Abatement. (2024). About ALFA NT: Arnhem Land Fire Abatement Northern Territory. ALFA NT.

12. Clean Energy Regulator. (2024). Arnhem Land Fire Abatement case study. Australian Government.

13. RenewEconomy. (2023). Chubb prunes carbon credit scheme, but concern lingers over fossil fuel offsets. RenewEconomy.

Back to top

Fossil Fuel Fascism: When a Dying Industry Tries to Take Democracy With It - Gregory Andrews

Lyrebird Dreaming - Gregory Andrews

Author Gregory Andrews is: Founder and Managing Director of Lyrebird Dreaming A former Australian Ambassador and High Commissioner in West Africa Australia’s first Threatened Species Commissioner A leader in Indigenous policy

There is a phrase that captures something ugly about the world we are now living through.

It sounds extreme. But so is the behaviour it describes. 

Fossil fuel fascism is what happens when the coal, gas, and oil industries begin to lose the economic argument, the scientific argument and the moral argument - and respond by attacking democracy itself.

It’s not simply climate denial. It’s not just lobbying. It’s not even just greenwashing. 

It’s the hardening of fossil fuel politics into something more nasty and aggressive: disinformation, culture war, attacks on science, intimidation of activists, capture of governments, weakening of environmental laws, and use of state power to protect industries that are cooking the planet. 

It also thrives on chaos, division, and war because a frightened, divided and exhausted public is easier to distract from the accelerating consequences of global heating.

The Guardian recently described this as part of a global energy power shift. China is racing ahead as an “electrostate”, dominating solar, wind, batteries and EVs, while the US under Trump is retreating into oil, gas, deregulation and fossil-fuel nationalism. The old American oil order is not disappearing quietly. It is fighting back.

This is the key point. Fossil fuel fascism is not a sign of strength. It’s a sign of panic.

For more than a century, fossil fuels shaped global power. Oil built empires. Coal powered industrialisation. Gas was sold as the “cleaner” bridge that would take us safely into the future.

Guernica by Pablo Picasso is perhaps the world’s most-famous anti-Fascist artwork

But the future has arrived - and it’s electric. Renewables are no longer the expensive alternative. They’re increasingly the cheapest form of new energy. IRENA found that in 2024, 91 per cent of newly commissioned utility-scale renewable capacity produced power more cheaply than the lowest-cost fossil fuel alternative. 

Utility-scale solar was 41 per cent cheaper, and onshore wind 53 per cent cheaper, than the cheapest fossil fuel option. Renewables also avoided an estimated US$467 billion in fossil fuel costs in 2024 alone. That changes everything.

Now that clean energy is cheaper, fossil fuel politics can no longer rely on the old argument that coal, oil and gas are necessary for prosperity. So the argument shifts. Suddenly renewables are “woke”. Climate action is “elitist”. EVs are an attack on freedom and emit dangerous radiation. Wind farms are a threat to the nation. Scientists are political enemies. Protesters are extremists. Gas becomes “security”. Coal becomes “sovereignty”. Delay becomes patriotism.

And while we’re pushed from one outrage to the next - culture wars, real wars, manufactured crises and political chaos - the planet keeps heating in the background.

This is how a dying industry disguises self-interest as national interest.

And Australia shouldn’t pretend it’s only an American disease. We have our own version. Wrapped in hi-vis vests and divisive language. We have a political system still deeply influenced by fossil fuel money. 

We approve new coal and gas projects while claiming to take climate change seriously. We count domestic emissions while pretending exported emissions vanish at the port. We talk about the clean energy transition while expanding the very industries driving climate breakdown. And when communities, scientists, young people, First Nations custodians or climate advocates object, they’re too often treated as obstacles to progress rather than voices of reason.

But fossil fuel fascism will be overcome for one simple reason: it is fighting the future.

The clean energy transition is now powered by technology, economics and public demand. Solar panels, batteries, heat pumps, electric vehicles and renewable grids are not fringe ideas anymore. They’re infrastructure. They’re jobs. They’re cheaper bills. They’re cleaner air. They’re energy independence.

The International Energy Agency says renewable power capacity is set to grow faster between 2025 and 2030 in more than 80 per cent of countries than it did in the previous five years, with solar accounting for almost 80 per cent of the global increase. The fossil fuel industry can slow the transition. It can corrupt it. It can make it more unjust. It can make the climate damage worse. But it cannot stop the physics, the economics or the moral force of people wanting a liveable future.

So what do we do?

First, we name it. Fossil fuel obstruction is not “balance”. It’s not “pragmatism”. It’s not “keeping the lights on”. When governments approve new fossil fuel projects in a climate emergency, they are choosing to make the crisis worse.

Second, we electrify everything we can. Rooftop solar. Batteries. Efficient homes. Heat pumps. Induction cooking. Electric cars, bikes, and buses. Every household, business, and community that gets off fossil fuels weakens the political power of the fossil fuel industry.

Third, we stop rewarding climate vandalism. Move banking, superannuation and investments away from companies funding fossil fuel expansion. Ask councils, universities, festivals, galleries, and community organisations who sponsors them. Culture matters. Social licence matters.

Fourth, we mobilise and vote like the climate is real. Not as a side issue. Not as a nice-to-have. But as the foundation of economic security, food security, health security and intergenerational justice. For me, that means getting involved in the community-based independents movement to get more people like David Pocock, Sophie Scamps and Kate Chaney elected to our Parliament. 

And finally, we refuse despair. Despair is useful to the fossil fuel industry because it turns us citizens into spectators. Hope, properly understood, is not optimism. It’s discipline. It’s action. It’s choosing to fight because the future is still being made.

Fossil fuel fascism is rising because the fossil fuel age is ending. Our job is to make sure it ends democratically, justly and fast.

Gregory Andrews Climate Change Articles

• Climate Policy Counts Dollars and Tonnes. What if We Counted the Dead?
• The Climate Crisis is a Health Crisis
• The Science Is In: Global Warming Is Accelerating
• While We Watch Iran, the Planet Keeps Burning
• Have your say on Canberra’s next Climate Strategy: It will be make or break
• Science Warns of Future Where Billions Bake
• Two Years to 1.7°C: the “Prediction Game” We Can’t Afford to Lose
• Emergency Photos Ops Aren't Climate Leadership
• Why Fascists Reject Climate Science
• Don’t Be Distracted: Earth’s Life Support Systems Are Collapsing
• Diesel rebates for miners and a new EV tax? Australia’s climate policy double-think
• What Gas is That? Get to Know Your Climate Pollutants

The Uneven Ground: How Climate Change Is Reshaping Women's Lives in Australia - Lethal Heating Editor BDA

Australia's escalating climate disasters are falling hardest on women
who own less, recover slower, and carry the burden of care 
that never appears in disaster cost assessments

Key Points

Extreme heat is linked to elevated rates of preterm birth and stillbirth, with each 1°C temperature rise increasing preterm birth odds by around four per cent. 1 Domestic violence surges after natural disasters in Australia, with Black Saturday research confirming increased violence against women across affected Victorian shires. 2 Women in the Murray-Darling Basin report depression, family breakdown, and escalating caring burdens as drought and water scarcity destroy farm income and household stability. 3 Torres Strait Islander women face existential loss of Country as sea levels rise at more than double the global average, threatening cultural custodianship across generations. 4 Women hold fewer than 39 per cent of clean energy jobs in Australia and remain concentrated in administrative rather than technical or leadership roles. 5 Australia's disaster response and climate adaptation frameworks contain significant structural gaps in gender analysis, leaving women's compound vulnerabilities largely unaddressed. 6

At the height of the 2022 floods, women in Lismore, northern NSW, were wading through contaminated water to reach children. 

They had no cars. Several had no phones. The evacuation orders had come by text. 

Disability care workers, overwhelmingly female, stayed with clients who could not be moved. Emergency shelters offered no privacy screening, no sanitary supplies. 

In the months that followed, housing services recorded a sharp rise in women presenting with housing instability and domestic violence. The flood had broken open everything that was already fragile.

This is what gendered climate vulnerability looks like in practice. It sits beneath the aggregate damage figures, invisible in the official tallies. 

Women own fewer assets to lose, carry heavier care obligations when systems fail, and earn less to rebuild. 

They concentrate in the industries climate disrupts first. They get sick differently from the heat. They die less often in the acute disaster and suffer more in the long aftermath.

The Body Under Pressure

Heat is doing something to Australian pregnancies. A 2024 meta-analysis across 198 studies and 66 countries, including substantial Australian data, found that for every 1°C rise in ambient temperature, the odds of preterm birth increase by approximately four per cent. During heatwaves, that figure rises to 26 per cent. ¹

University of Queensland researchers have spent years tracking maternal exposure to ambient temperature across Queensland birth registers, documenting associations between extreme heat in the third trimester and preterm birth, stillbirth, and low birth weight. 

Their work points toward a particular cruelty: the pregnancies most exposed are in regional and outer suburban areas, where housing stock lacks insulation and cooling, and where women are less able to avoid outdoor heat exposure. As Australian summers lengthen, the window of reproductive risk widens.

For older women, the health calculus shifts. Respiratory medicine researchers have documented the long-term cardiovascular and pulmonary consequences of repeated bushfire smoke exposure, with elderly women facing compounded risk from pre-existing conditions amplified by particulate inhalation. The Black Summer of 2019-20 blanketed Sydney for weeks in smoke that frequently breached hazardous thresholds. Many older women in outer metropolitan and peri-urban areas spent that summer indoors, unable to open windows in summer heat, managing asthma, managing fear.

Vector-borne disease is expanding southward. Warming temperatures are extending the habitat range of mosquito species that carry Ross River virus and dengue, with coastal and peri-urban women facing elevated exposure through domestic and community care roles that keep them close to yards, gardens, and stormwater systems. The interaction between climate, ecology, and women's gendered use of space creates health vulnerabilities that standard occupational risk frameworks rarely map.

The Hidden Ledger of Care

Australian disaster cost estimates run to tens of billions of dollars. They count damaged infrastructure. They record insurance payouts. What they leave out is the economy of care that holds communities together during and after disaster, and that economy is run almost entirely by women.

During flood evacuations, women coordinate children, manage pets, communicate with elderly parents, liaise with schools about disrupted schooling, and maintain the household's administrative coherence under conditions of acute stress. In recovery, they manage insurance claims, find temporary accommodation, register for payments, and absorb the emotional demands of traumatised family members. ABS time use data has consistently shown women performing a disproportionate share of unpaid care and domestic work in normal conditions. In disaster conditions, that asymmetry deepens. ⁶

Women in frontline health and community services carry a version of this burden professionally. Emergency nurses, rural GPs, community health workers, and social workers, professions where women constitute the large majority of the workforce, absorb the cascading health and welfare consequences of climate disasters. The moral injury of managing inadequate resources against overwhelming need, of seeing the same patients return with new crises, constitutes a climate health impact on its own terms, one accumulating with each successive fire season or flood event.

The psychological weight of domestic climate adaptation also falls unevenly. Women in drought-affected households describe the daily cognitive load of rationing water, adjusting food budgets as climate-driven price shocks move through the fresh produce supply chain, preparing emergency plans, and monitoring fire risk apps. This is invisible labour, performed without support, without recognition, and without end.

The Murray-Darling: A Case Study in Accumulated Loss

Margaret Alston and colleagues at Monash University spent years in the Murray-Darling Basin during and after the Millennium Drought, listening to farm women describe what sustained water insecurity actually does to a household. The findings published in the journal Research, Action and Policy were stark: women reported depression, work-related family separations, marital breakdown, increasing financial responsibility for family sustenance as farm incomes collapsed, and escalating incidences of violence against them linked to drought stress. ³

Farm women in the Basin hold a particular structural exposure. Their unpaid labour, managing books, managing domestic operations, managing the social glue of the enterprise, rarely appears in farm income calculations. Their retirement savings are tied to land that loses value during drought. Their career continuity is disrupted by the cycles of agricultural crisis. The superannuation gap between men and women is wide across Australia, and wider still in rural communities where women's formal employment histories are interrupted by the demands of the family agricultural enterprise.

Climate change is intensifying the pressure on these women without a corresponding increase in support. The National Farmers Federation has produced agricultural outlook reports tracking commodity impacts and water availability projections. What those reports leave largely unexamined is the gendered distribution of the losses they document. Women own a minority share of agricultural land in Australia, inherit less, and have fewer liquid assets to draw on during prolonged income disruption. The Basin's next climate stress event will find them in the same position as the last, only older, and with less time to rebuild.

When Disasters Follow Women Home

Dr Debra Parkinson's research is among the most cited in Australian disaster studies, and the core finding remains disturbing: domestic violence increases in the aftermath of natural disasters. Her qualitative research across two Victorian shires following the 2009 Black Saturday bushfires, drawing on in-depth interviews with 30 women, confirmed that violence against women rose in the disaster's wake. The data gap that made her work necessary, no reliable statistics had existed beforehand, itself revealed the historical resistance to examining male violence against women in post-disaster contexts. ²

Subsequent research has mapped this pattern internationally. A 98 per cent increase in physical victimisation of women followed Hurricane Katrina. A 53 per cent surge in family violence call-outs occurred on the weekend of the Christchurch earthquake. The mechanisms are consistent: economic stress, social displacement, alcohol, cramped temporary housing, severed support networks, and the concentrated exposure of women and children to men whose psychological resources have been stripped bare by disaster.

As bushfires intensify under climate change, this dynamic will worsen. The services designed to receive women fleeing violence, community legal centres, specialist DFV services, women's shelters, are the same services placed under maximum pressure by the disasters that generate the violence. In regional communities where services already operate on thin margins, disaster events can break the referral pathways entirely.

Climate-driven economic precarity compounds the picture. Farm debt, uninsurability in high-risk postcodes, job loss in climate-disrupted tourism and hospitality sectors, all concentrate financial pressure in households where women's economic autonomy is already constrained. The link between economic coercion and intimate partner violence is well established. Climate change is manufacturing the conditions for both.

Country Going Under

Women on the island of Saibai in the Torres Strait have told the Australian Human Rights Commission that within their lifetimes they may need to leave the place of their birth, the resting place of generations before them. Sea levels in the Torres Strait are rising at more than double the global average, at around 6.4 millimetres per year since 1992. For low-lying coral cay islands composed of alluvial sediments only metres above sea level, the physics are unforgiving. ⁴

For Torres Strait Islander women, the stakes exceed the material. Women hold custodianship of Country in ways that are legal, cultural, and spiritual simultaneously. The erosion of shorelines, saltwater intrusion into freshwater aquifers, coral bleaching, seagrass die-back, the disruption to marine species on which communities depend for subsistence and ceremony, all of these are losses that accumulate in the body as a form of ecological grief that Western mental health frameworks lack the vocabulary to fully describe.

The Torres Strait Regional Authority has confirmed that most parts of the low-lying inhabited islands will eventually be lost to sea level rise. The UN Human Rights Committee, in a 2022 ruling arising from a complaint by Torres Strait Islander community members filed in 2019, found that Australia's climate inaction constituted a violation of their right to family life and right to culture. The legal finding has produced limited material change.

Aboriginal women across mainland Australia are experiencing related forms of dispossession. Changes to seasonal calendars disrupt the transmission of plant medicine knowledge, food harvesting practices, and ceremony across generations. The warming of Country erases the ecological cues through which that knowledge is indexed. Once broken, these chains of transmission do not repair themselves.

The Green Economy's Uneven Dividend

Australia's clean energy transition will require the workforce to more than double. According to the Clean Energy Council, the sector needs to grow from roughly 21,500 workers to more than 59,000 to build and operate the generation, storage, and transmission infrastructure required to reach 82 per cent renewable electricity in the National Energy Market. Half the population, women, remain significantly underutilised in building this future. ⁵

Women currently hold fewer than 39 per cent of clean energy workforce roles in Australia. Their representation in technical, trades, and generation roles is lower still. The gender disparity is sharpest in upstream positions, electricity generation, network, transmission, and field jobs. Administrative and support functions retain the familiar pattern: women concentrated in the roles that pay least and carry least decision-making authority.

In the Latrobe Valley, where Victoria's coal-fired electricity sector is winding down and offshore wind is beginning to scale up, the transition dynamic is revealing. The declining coal workforce is male-dominated and the subject of substantial policy attention and retraining investment. The day-to-day coordination work that makes the transition real at community level, the trust-building, community engagement, education, and social infrastructure functions, falls largely to women, most of it unpaid or in lower-paid community sector roles.

Jobs and Skills Australia has identified increasing women's participation as essential to the workforce scale-up the transition requires. The federal government's $60.6 million Building Women's Careers programme, announced in the 2024 budget, is a step toward addressing structural barriers. Whether it reaches the scale and depth required to shift entrenched patterns across STEM education and workplace culture is a different question.

Governance Failures and the Data That Does Not Exist

Australia produces significant volumes of climate risk data. The Climate Change Authority's National Climate Risk Assessment, the work of CSIRO, the Bureau of Meteorology, and state emergency management bodies, all map hazard exposure, projected costs, and adaptation priorities. The gender analysis within those documents is thin. Systematic gender-disaggregated data collection across health, housing, labour, and disaster response datasets remains patchy. The information needed to design gender-responsive policy is, in many crucial areas, absent. ⁶

Australia's legal framework for disaster response, including the National Disaster Risk Reduction Framework and state emergency management acts, references vulnerability but rarely operationalises gender equity in the specific, enforceable terms that would shift practice. Women's Environmental Leadership Australia's 2024 report on gender, climate, and environmental justice identified the vulnerability of women and gender-diverse people as amplified by intersecting factors including socioeconomic status, cultural and linguistic diversity, and disability, and called for systematic institutional responses that have been slow in coming.

Climate litigation is beginning to fill some of the governance vacuum. The Environmental Defenders Office has supported duty of care cases and planning law challenges that bear on the rights of future generations, many brought by or on behalf of women and young people. The Torres Strait complaint to the UN Human Rights Committee demonstrated the reach of international human rights law into Australia's domestic climate policy failures. These legal mechanisms are consequential but slow, expensive, and accessible to few.

What Remains

The picture that emerges from the research is one of compound disadvantage operating across multiple scales simultaneously. Individual women in drought-affected farming communities face financial ruin, psychological distress, and elevated risk of violence at the household level, while the institutional frameworks designed to protect them contain structural gaps at the policy level. Torres Strait Islander women face existential dispossession at the community level, while the international legal architecture that vindicates their rights lacks enforcement teeth at the geopolitical level.

None of these problems is intractable. Gender-disaggregated data collection can be mandated. Disaster response frameworks can embed gender equity as an operational standard, not an aspiration. Clean energy workforce programmes can prioritise women in technical and leadership roles, in the communities most affected by transition, in the trades that will pay most. Climate adaptation funding can be directed to the community-level organisations, overwhelmingly led and staffed by women, that build the resilience governments claim to want.

What the evidence demands is a reckoning with the structural causes of women's greater climate exposure. Climate change does not create these inequalities. It finds them already in place, then deepens every fault line. The policy response that treats gender as a secondary consideration, something to address once the main work of decarbonisation and adaptation is done, has already cost women in flood plains and farm communities and Torres Strait communities more than any official damage estimate acknowledges. The arithmetic of delay runs through women's bodies, women's savings, and women's futures.

References

1. Chersich, M. et al. (2024). A systematic review and meta-analysis of heat exposure impacts on maternal, fetal and neonatal health. Nature Medicine. See also: Dalugoda, Y. et al. (2024). Spatiotemporal Association Between Temperatures and Adverse Birth Outcomes, Queensland Alliance for Environmental Health Sciences, University of Queensland.
2. Parkinson, D. and Zara, C. (2013). The hidden disaster: domestic violence in the aftermath of natural disaster. Australian Journal of Emergency Management, 28(2). See also: Parkinson, D. (2019). Investigating the Increase in Domestic Violence Post Disaster: An Australian Case Study. Journal of Interpersonal Violence, 34(11).
3. Alston, M. and Whittenbury, K. (Eds.) (2013). Climate Change, Women's Health, Wellbeing and Experiences of Gender Based Violence in Australia. In Research, Action and Policy: Addressing the Gendered Impacts of Climate Change. Springer, Dordrecht. See also: Yazd, S.D., Wheeler, S.A. and Zuo, A. (2019). Understanding the impacts of water scarcity and socio-economic demographics on farmer mental health in the Murray-Darling Basin. Ecological Economics.
4. Torres Strait Regional Authority. Climate Change in the Torres Strait. TSRA, 2024. See also: Australian Human Rights Commission. Intervention on Climate Change Impacts in the Torres Strait. AHRC.
5. Australian Renewable Energy Agency. (2025). Marching forward: the women leading the way in clean energy. ARENA. See also: Clean Energy Council. Clean Energy Australia Report, 2023.
6. Women's Environmental Leadership Australia. (2024). Gender, Climate and Environmental Justice in Australia. WELA. See also: Climate Change Authority. National Climate Risk Assessment. Commonwealth of Australia, 2023.
7. Australian Women's Health Alliance. (2025). Towards Climate, Health and Gender Justice: Addressing the Intersecting Impacts of Climate Change. AWHA.
8. Victorian Women's Trust. (2024). Heat Waves and Gender Gaps: Navigating the Complexities of Climate Change in Australia. VWT.
9. Gender and Disaster Australia. (2024). The Work of Gender and Disaster Australia. Presented at NEMA, 2024.
10. Jobs and Skills Australia. Cited in: The Policy Maker. (2025). (Em)powered women: towards a gender-inclusive workforce for Australia's clean energy future. APPI.
11. Australian Bureau of Statistics. Labour Force Survey; Gender Indicators, Australia. ABS, 2024.
12. Australian Institute of Health and Welfare. Mental Health Services in Australia; Australia's Health. AIHW, 2024.
13. ClientEarth. (2022). Torres Strait climate claimants win their historic human rights fight against the Australian Government. ClientEarth.

Back to top

The Uninsurable Nation: How Climate Risk Is Hollowing Out Australian Property Markets From Within - Lethal Heating Editor BDA

Home insurance is disappearing across Australia's flood plains, 
bushfire corridors and eroding coastlines, leaving hundreds of 
thousands of families financially exposed and a banking system 
quietly absorbing risk it has not yet priced

Key Points

APRA's 2026 Insurance Climate Vulnerability Assessment projects one in four Australian homes will be uninsured by 2050, up from one in seven today. 1 Two-thirds of households surveyed in Lismore's flood zone currently hold no flood insurance, mostly because they cannot afford it. 2 Australian home insurance premiums rose at 7.2% annually between 2010 and 2025, more than double the 3.1% average wage growth over the same period. 3 Research on the Hawkesbury-Nepean Valley shows properties in 1-in-100-year flood zones already sell at an approximately 11% discount to comparable low-risk homes. 4 RMBS issued by small regional banks carry disproportionately higher physical climate risk, with securitisation markets yet to fully incorporate this exposure. 5 The Insurance Council of Australia is lobbying for a government-backed Flood Defence Fund, arguing no equivalent to the Cyclone Reinsurance Pool currently protects flood-affected communities. 6

In the weeks after the 2022 Northern Rivers floods, residents of South Lismore began receiving letters. Not from emergency services. Not from the government. From their insurers. 

The letters said, in the dry language of actuarial assessment, that their homes were no longer insurable. Some had lived there for thirty years. A few had just finished paying off their mortgages. What the letters really said was: you are on your own.

A 2024 survey by Resilient Lismore found that two-thirds of households in the flood zone had no flood insurance, the majority because they could not afford it. ² 

Some had been quoted annual flood premiums of twenty thousand dollars or more. Others had simply been refused. 

For a town that sits in a river basin with a documented flood history stretching back to the colonial era, major floods in 2020, 2017, 2015, 2013, 2012 and the catastrophic 14.4-metre inundation of 2022, the retreat of insurance capital was not a surprise to hydrologists. It was a surprise to everyone who had a mortgage.

Lismore is not anomalous. It is instructive. Across Australia, a structural shift is occurring in the relationship between climate risk, private insurance, residential property and bank lending that is playing out below the surface of official discourse and well ahead of policy response. The question is no longer whether insurance deserts will form. They are forming now. The question is what they will leave behind.

The Scale of the Protection Gap

Australia's prudential regulator published its landmark Insurance Climate Vulnerability Assessment in early 2026. The headline figure is stark. Approximately one in seven Australian households is currently uninsured. ¹ 

By 2050, under both modelled scenarios, that figure rises to one in four. That is roughly one million additional households losing insurance protection over twenty-five years, at a rate of around 40,000 families every year. The five major insurers that participated, Allianz, Hollard, IAG, QBE and Suncorp, together hold around 80 per cent of the Australian home insurance market by gross written premium. Their own internal modelling produced those numbers, under APRA's supervision.

Between 2010 and 2025, Australian home insurance premiums rose at an average annual rate of 7.2 per cent. Wages grew at 3.1 per cent annually over the same period. ³ 

That gap has been compounding for fifteen years. In the Greater Sydney area alone, average home insurance rose by as much as 66 per cent since 2020. The Actuaries Institute estimated in 2024 that 1.6 million Australian households were already experiencing some form of insurance affordability stress. 

Climate Valuation, a property risk analytics firm, puts the current number of homes that are either uninsurable or practically unaffordable to insure at around 380,000, with the trajectory toward one in ten by 2035.

The Insurance Council of Australia has documented that insurance claims from catastrophic events rose by nearly 50 per cent in the five years to 2024, while around 1.2 million properties face some level of flood risk. Weather-related insured losses exceeded seven billion dollars in 2022 alone. ⁶ 

Of this, 80 per cent of the uninsurability risk nationally is attributable to riverine flooding. Bushfire and flash flooding account for most of the rest. Coastal erosion, slower and harder to model, is the third axis of a problem that planning systems have consistently underweighted.

The Mechanics of Disappearance

When insurers raise premiums or exclude specific perils from standard policies, they are not acting arbitrarily. They are translating data from third-party hazard modelling suites, layered over address-level exposure databases, into actuarial pricing. Risk Frontiers, Geoscience Australia's flood mapping datasets, satellite-derived coastal erosion models and global reinsurance pricing signals all feed into the algorithms that determine what a household pays. 

The insurer does not always disclose which maps govern a given address. The household often has no mechanism to challenge the assessment.

In coastal erosion zones like Wamberal on the NSW Central Coast, properties on the ocean side of a single street can face premiums an order of magnitude higher than those fifty metres inland. The automated underwriting logic responds to modelled inundation probability and retreat projections. It does not respond to the emotional reality of a family that bought a home, raised children there and now cannot sell it to anyone with a mortgage. ⁷ 

Banks require proof of insurance as a condition of settlement. Without insurance, the property cannot be sold to a mortgaged buyer. It becomes, in the blunt language of the market, a cash-buyer asset. That transition is not hypothetical at Wamberal. It is already occurring.

A significant driver of premium escalation is the international reinsurance market, which prices Australian catastrophe risk against a global portfolio of climate-exposed assets. As global losses from extreme weather have risen, reinsurance capital has become more expensive and, in some lines, more restricted. The cost is passed directly to the retail insurer and then to the consumer. 

In disaster-prone regional Queensland and northern New South Wales, the combined effect of local claims histories and international reinsurance repricing has produced the premium levels that now render entire postcodes uneconomic for standard household insurance products.

What Happens to a Mortgage

Home insurance is not optional for mortgaged property in Australia. It is a contractual condition of the loan. Banks require coverage for the life of the mortgage, and most lending contracts specify that a lapse in insurance constitutes a technical default. APRA's 2025-26 Corporate Plan is explicit on this point: declining insurance coverage among borrowers exposes banks to greater losses from climate risk. ⁸ 

A borrower who cannot obtain affordable insurance is, technically, in breach of their mortgage terms from the moment the policy lapses.

In practice, most Australian banks do not actively monitor post-settlement insurance compliance at the individual loan level. The mechanisms are ad hoc: periodic reminders at renewal, reliance on borrower self-reporting, occasional checks triggered by a disaster event. There is no centralised system that flags an individual mortgage as non-compliant when the insurance policy expires unrenewed. 

The exposure accumulates quietly. As APRA's Insurance CVA makes clear, a widening protection gap increases both the probability of mortgage default and the size of the loss when default occurs, because an uninsured damaged property may no longer cover the outstanding loan amount.

Reserve Bank research from 2024 found that residential mortgage-backed securities issued by small regional banks and credit unions carry disproportionately higher physical climate risk. ⁵ 

The RMBS market has not yet fully incorporated this exposure into credit enhancement structures. Regional lenders, by the nature of their geographic concentration, hold loan books with larger proportional exposure to high-risk postcodes than the major banks. If property values in those postcodes deteriorate materially, driven by uninsurability and the contraction of the mortgage market, the credit quality of those loan books deteriorates with them.

The Big Four banks conducted climate stress tests under APRA supervision in 2022. They predicted they would respond to higher climate risk by cutting back on high loan-to-valuation lending and reducing exposure to higher-risk regions. That rational commercial response, if enacted systematically, becomes a self-fulfilling driver of property devaluation. 

When banks withdraw lending from a postcode, cash-only transactions become the norm. Prices fall. Equity erodes. Owners who financed against a higher valuation find themselves underwater. ⁹

Property Values and the Price of Risk

Research published in early 2026, drawing on home sales data and digital flood maps from the Hawkesbury-Nepean Valley, found that properties in the 1-in-100-year annual exceedance probability flood zone sold at an approximately 11 per cent discount compared to equivalent properties outside the zone. ⁴ 

In Richmond, a town of around 14,500 people in the valley with five major floods between 2020 and 2022, that translated to a median discount of around $89,000. The research noted that the discount reflected standard modelled flood risk but that buyers were systematically underweighting the far more destructive low-probability, high-severity flood events that the valley is capable of producing.

Insurers have already updated their pricing to account for these extreme events. The gap between what the market discounts a property for and what insurers charge to cover it signals something uncomfortable: the insurance pricing is ahead of the transaction pricing. Property buyers are still absorbing risk they have not fully priced. When a major flood event reprices the risk in a single season, the adjustment is sudden and severe.

In coastal erosion zones, the dynamics are structurally different. As insurance for the built structure disappears, the value of a beachfront or estuarine property collapses toward land value alone. 

At places like Wamberal Beach on the NSW Central Coast, where homes have been progressively threatened by erosion and where insurers have retreated from structural coverage, a property that commanded a premium for its ocean outlook increasingly holds its value only in the land parcel, and even that becomes uncertain as the shoreline moves. ⁷ 

The structure itself becomes worthless on the open market to anyone who cannot finance it and cannot insure it.

In Queensland, Climate Council modelling projected that one in sixteen homes statewide, or around 193,000 dwellings, could be classified as high-risk for insurance purposes by 2030. Federal electorates including Moncrieff, Wright, Griffith and Maranoa dominated the national top ten. In the highest-risk areas nationally, the proportion of properties facing effective uninsurability reaches 27 per cent.

A Socioeconomic Filter

The population bearing the greatest uninsurability risk is not randomly distributed. Flood plains, older riverine settlements and low-lying coastal towns disproportionately house working-class families, retirees on fixed incomes and people without the financial reserves to relocate. In Lismore's flood zone, Resilient Lismore's survey data documents a population with significant socioeconomic disadvantage. Affordability was the dominant reason for absent coverage. ² 

People who had returned to high-risk locations simply because they had nowhere else to go found insurers would not cover them at any price.

The rental dimension compounds this. When a landlord's insurance premiums rise sharply, those costs are absorbed first by the landlord and then passed to tenants. In a regional rental market with limited vacancy and housing stock already constrained by disaster damage, renters have little leverage to resist. The insurance cost effectively becomes an undisclosed component of the rent. The tenant carries the cost but not the coverage.

For elderly property owners who lack the liquidity to sell into a depressed market and the physical capacity to relocate independently, the situation approaches a permanent trap. Their homes, which often represent the primary store of intergenerational wealth for working-class families, are losing insurable value in real time. 

The ability to pass that asset to the next generation, mortgaged, insured and functional, is degrading. When the next major disaster strikes an uninsured community, the recovery will be financed by the household, by emergency government payments, or not at all.

The Governance Gap

The Northern Australia Cyclone Reinsurance Pool, established by the federal government in 2022 with a ten billion dollar backstop, demonstrated that public intervention can stabilise a private insurance market under acute climate pressure. When Cyclone Alfred was declared an insurance catastrophe in early 2025 with more than 63,000 claims lodged, the pool's structure meant that consumers were largely shielded from sharp premium spikes. ⁶ 

No equivalent mechanism exists for flood, the peril responsible for 80 per cent of Australia's uninsurability risk.

The Insurance Council of Australia is now lobbying for a government-backed Flood Defence Fund, arguing that a structural equivalent to the cyclone pool is the only mechanism capable of preserving affordable cover in flood-exposed communities at scale. 

The analogy with Florida's Citizens Property Insurance Corporation is instructive as both a model and a warning. Florida's insurer of last resort was originally conceived as a temporary backstop. It became, over two decades, the dominant insurer in the state, absorbing risk that private markets would not write and accumulating contingent public liabilities in the process.

Local governments in high-risk zones face a compounding fiscal problem. Their rate revenue is assessed against property values. As uninsurability drives down those values, the municipal rate base erodes. Infrastructure maintenance, emergency preparedness and the mitigation works required to reduce insurance risk all cost money that a shrinking rate base cannot reliably generate. The councils that most need levee upgrades and drainage improvements are the ones with the least financial capacity to fund them.

The planning system's role in creating this exposure cannot be avoided. Residential lots were approved across Australian flood plains and high-severity bushfire zones for decades by local councils that either could not foresee or chose not to confront the climate trajectory. In many cases, developer appeals overrode council refusals that had been grounded in flood risk. 

The structures built under those approvals are now the inventory of the insurance desert. A resident of South Lismore who bought on a flood plain because that was what was available, at a price they could afford, in the town where their family lived, had no individual means to anticipate that their street would one day be deemed uninsurable by an algorithm in an underwriting office in Sydney.

Looking Forward

The contraction of private insurance from Australia's highest-risk residential zones is not a failure of the insurance market. It is the market communicating a signal that the planning system, the banking sector and successive governments have been reluctant to hear. Risk that cannot be priced cannot be insured. Risk that cannot be insured cannot be mortgaged. 

Property that cannot be mortgaged cannot be sold at values that reflect what households paid for it. That sequence, playing out in slow motion in Lismore, in Richmond, in Wamberal, in northern Queensland, is the real estate equivalent of a balance sheet reckoning.

APRA will release further findings from its Insurance Climate Vulnerability Assessment to federal government and key agencies including the National Emergency Management Authority. 

The data will sharpen policy choices that are already uncomfortable: whether to subsidise insurance in zones that climate science says should not bear permanent residential development; whether to expand government-backed insurance pools knowing the contingent fiscal risk; whether to mandate managed retreat from the highest-exposure areas and at what compensation. None of these choices is without cost. The question is who bears it.

What is clear from the trajectory is that the cost of inaction accumulates faster than the cost of intervention. Between 2015 and 2024, the protection gap in Australia meant that 33 per cent of economic losses from natural catastrophes went uninsured, against a global average of 57 per cent. Australia, in other words, was already absorbing an unusually high proportion of its disaster losses without insurance cover. 

Every year that the protection gap widens, the bill deferred to households, to governments and to the financial system grows larger. 

The letters arriving in Lismore after 2022 were the beginning of an accounting that the rest of the country has not yet opened.

References

1. Australian Prudential Regulation Authority. 2026. Insurance Climate Vulnerability Assessment: One in Four Australian Homes Projected Uninsured by 2050. APRA.

2. Resilient Lismore. 2024. 2024 Lismore Flood Zone Survey and Outreach Project. Resilient Lismore.

3. Insurance Business Australia. 2026. One in Four Australian Homes Will Be Uninsured by 2050, Regulator Warns. Insurance Business.

4. The Conversation. 2026. We Pay Less for Houses in One-in-100-Year Flood Zones, But Overlook Risks of More Devastating Floods. The Conversation.

5. Reserve Bank of Australia. 2024. Assessing Physical Climate Risk in Repo-Eligible Residential Mortgage-Backed Securities. RBA Bulletin.

6. Money Magazine Australia. 2025. Uninsurable: The Truth About Australia's Flood Insurance Crisis. Money Magazine.

7. Australian Property Update. 2025. Flood, Fires, and Coastal Erosion: Assessing Property Risks. Australian Property Update.

8. Australian Prudential Regulation Authority. 2025. APRA Corporate Plan 2025-26. APRA.

9. Investing.com. 2022. Australian Banking System Cushioned for Imminent Climate Change-Related Risks, Regulator Says. Reuters/Investing.com.

10. Lismore City News. 2023. Uninsurable, Unsellable, Unrentable: Flood Insurance Inquiry Welcomed to Protect Homeowners. Lismore City News.

11. Green Central Banking. 2025. Australia and NZ Face Home Insurance Crisis Due to Climate, Experts Warn. Green Central Banking.

12. Reserve Bank of Australia. 2025. Financial Stability Review, October 2025: Resilience of the Australian Financial System. RBA.

13. Climate Council of Australia. 2022. Uninsurable Nation: Australia's Most Climate-Vulnerable Places. Climate Council.

Back to top