Lethal Heating: 12/09/17

09/12/2017

Christmas Weather: La Nina To Affect Australia’s Climate During December

NEWS.com.au - Benedict Brook

LA NINA has decided to make an appearance just in time for Christmas. If you’re making plans, this is what you need to know.

Bureau of Meteorology: Understanding ENSO

JUST in time for Christmas, the weather has gifted Australia an early present with the declaration the country is now officially in the grip of La Nina.

But whether the La Nina climate driver will be a much cherished Christmas present, or the equivalent of yet another pair of socks, will depend very much on where you live.
While it’s a bit early to forecast exactly what the weather will be like on Christmas Day, La Nina is leading the meteorological boffins to firm up their thoughts on December’s weather — as well as for the rest of summer.

La Nina has been declared, now sea temperatures have cooled to -0.8C below average in the equatorial Pacific. Picture: Bureau of Meteorology. Source:Supplied

“We’re going to experience La Nina this Christmas. In December, the odds are over 60 per cent for a wetter, colder month in southern Queensland, NSW, Victoria, Tasmania and the populated areas of South Australia,” Dr Andrew Watkins, the Bureau of Meteorology’s (BoM) Manager of Long Range Forecasts told news.com.au.
It could be cloudier too, with less blue skies. However, the most southerly capitals also have an increased chance of longer, warmer spells this Christmas. But these are unlikely to be, “short, sharp extreme temperature” spikes, Dr Watkins said.

La Nina sees generally cooler waters in the equatorial region but warm waters around Indonesia. Picture: Bureau of Meteorology Source:Supplied

The Australian Bureau’s La Nina confirmation came a bit later than the organisation’s US counterparts which require equatorial sea surface temperature to sink to 0.5C below average. The bar is higher, and colder`, for the BoM which says the same seas must be 0.8C below.
But the outcome for Australia is the same. During a La Nina, which has counter effects to El Nino, while equatorial seas get cooler, the waters north of Australia warm up. That helps to produce rising air, clouds and rainfall over northern and eastern parts.
“Typically, the La Nina impacts we see is that summers are cooler and a bit wetter,” Dr Watkins said.
“But this year’s a bit different as the La Nina is looking weak and it’s starting much later which is quiet unusual.”

Looking forward to this on Christmas Day in Bondi? Picture: Dylan Robinson Source:News Corp Australia

There’s a chance it could be more like this in Bondi over Christmas. Source:News Limited

The late La Nina, as well as colder than expected seas around Northern Australia, means the effects are unlikely to be at the extreme end of the scale and could even weaken further, bringing conditions closer to average.
Dr Watkins said several effects of La Nina were already being felt. The heatwaves and rains in Victoria and Tasmania had La Nina written all over them.
But there were subtler signs too, which could mean Bondi may not be the best location for a Christmas Day dip.
“Summer swimming has come early around Tasmania and Victoria with waters 3C warmer than usual but around Sydney, seas are 3C cooler so it’s a bit chilly. Port Phillip Bay is actually warmer than Sydney Harbour,” he said.
This isn’t unheard of during a La Nina with winds coming off the Tasman Sea cooling down Sydney and Brisbane. Melbourne, Adelaide and Hobart miss out on these while also being affected by slow moving warm weather systems lolloping lazily across the continent.
The Bureau will release its official Christmas Day forecast on 18 December, but here’s the information we have so far on how La Nina could affect the capitals over the festive season.

Sea surface temperatures around Victoria and Tasmania are warmer than around Sydney. Picture: Bureau of Meteorology. Source:Supplied

BRISBANE
29.1C is the average for December with around 133mm of rain. The weak La Nina could see those highs decrease around Christmas time with increased rainfall.

SYDNEY
Around 90mm of rain falls in Sydney during a typical Christmas month with 25C the average maximum. Like Brisbane, La Nina could dampen the festive party and bring the maximums down.

CANBERRA
The nation’s capital could see lower than the December average of 26.3C but there’s no need to pack away the barbecue just yet; it could still be a very pleasant Christmas Day.

MELBOURNE
The average rainfall is 59mm in December but just a week into the month, and after a wild weekend of rain, a full 73.4mm has fallen.
“December already has a bit more of a La Nina feel to it,” said Dr Watkins.
However, the Victorian capital could yet see some Yuletide warm spells similar to what the city saw in late November.

HOBART
Dr Watkins said Hobart’s recent hot run, where temperatures climbed above 25C on six consecutive days was “a classic La Nina spell”.
Even more so than Melbourne, Hobart’s rainfall has been off the scale. The 85cm the city has seen so far in December is eight times the average for the entire month.
La Nina could see more falls but with some strings of hot days over the festive period.

ADELAIDE
Average conditions are expected for Adelaide in the run up to Christmas, possibly even slightly below the festive average of about 27C.

It could be a dry Christmas in WA such as here at Cottesloe beach. Photo: Alamy Source:Alamy

PERTH
There isn't a strong swing to either exceptionally dry or wet conditions in WA but Dr Watkins said there was a 70-75 per cent chance Perth would see a drier than average December.
“La Nina and El Nino have less of an impact (in WA); it’s a bit more influenced by what’s happening in the eastern Indian Ocean. At the moment, the ocean is slightly cooler than normal which is pretty abnormal and the opposite of what we expect to happen.”

DARWIN
Where’s the monsoon? That’s the question in the Top End. Normally at this time of year there would be signs of the monsoon forming but it currently remains north of the equator. Yet, it could still make an appearance in time to dampen Christmas lunch.
Monthly rainfall totals can be quite variable during the wet season, for example in Darwin the average December rainfall is 254mm but the highest recorded was at 665mm in 1974 and the lowest just 19mm in 1991. The weak La Nina is expected to have a minimal effect on rainfall.

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Climate Change Starts To Take Its Toll On Housing Market

RenewEconomy - David Leitch

Source: publichealthwatch

Money talks; BS walks
If there is one thing Australians can relate to its house prices. There is a lot of coastal real estate.
This research discussed below is, to make a pun, “ground breaking”. It shows how a large sample of people are demonstrating their core climate beliefs in the largest investment decision many of them will ever make.
Politicians can say what they like. Scientists should take huge heart from papers such as this because it shows that property buyers and sellers are listening to them.
In my opinion, the most important work that needs to be done in climate change is showing what its impacts will be on the world. We are long past having to prove that climate change is real and we need to be preparing for next year’s battles and not re-fighting the last war.
I’d like to thank Kate Mackenzie director, finance, policy & decision metrics at Climate-KIC Australia for drawing attention to this paper. Way to go.

“Disaster on the horizon: The price effect of sea level rise”
That’s the title of an SLR paper published by Bernstein, Gustafson & Lewis. The headline conclusion is that homes exposed to sea level rise [SLR] sell at a 7 per cent discount relative to observable equivalent unexposed properties equidistant from the beach. This discount has grown over time.
I am mostly just going to quote paragraphs, as it is a well written report and the conclusions come through loud and clear.

“Our first contribution is to show that properties exposed to projected SLR sell at around a 7% discount relative to otherwise similar properties (e.g. same zip, time, distance to coast, elevation, bedrooms, property and owner type), which we show implies very similar time frames for rising sea levels as the medium to highly pessimistic scientific forecasts. This effect is primarily driven by properties unlikely to be inundated for over half a century, suggesting that it is driven by investors pricing long horizon concerns about SLR costs.
Moreover, the same discount does not exist in rental rates, indicating that this discount is due to expectations of future damage, not current property quality……Finally, we show that the SLR exposure discount has increased substantially over the past decade, coinciding with both increased awareness and more pessimistic prognoses about the extent and speed of rising oceans. In particular, we document increased transaction volume and lower prices for sophisticated buyers following the significant revisions of the IPCC’s 2013 release, which increased SLR projects and awareness”

Comment: An analyst might suggest that a 7 per cent discount is excessive, given the 50-year time horizon. People overvalue the risk. Still people also overpay on tollroads in the sense that the time saved compared to the toll implies a high value for time and a willingness to pay a premium to avoid inconvenience.

480,000 property sales analysed

“Our main test sample contains over 480,000 sales of residential properties within 0.25 miles of the coast between 2007 and 2016. In our baseline analyses, we define any property that would be inundated at highest high tide with a 6 foot global average SLR to be exposed…….
….We further break this into exposure buckets, with properties that will experience ocean encroachment after 1 foot of global average sea level rise trading at a 22%, 2-3 feet at a 17% discount, 4-5 feet at a 9% discount and 6 feet at a 6% discount.4 Using the long run discount rate provided by Giglio et al. (2014) and assuming complete loss at the onset of inundation, we estimate that markets expect 1 foot of sea level rise within 35 years, 2-3 feet within 45 years, 4-5 feet after 65 years, and 6 feet in 80 years. These results are consistent with the medium to high projections provided in Parris et al. (2012) and utilized by the NOAA in their 2012 report.”

Comment: What a fantastic piece of research. Any investment bank research team would win awards for coming up with this evidence.

At the beginning of our sample in 2007 we find no significant difference between the prices of exposed and unexposed properties. By the end of our sample in 2016, exposed non-owner occupied properties are priced approximately 13.5% below comparable unexposed properties.

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Australia's Top Companies Ignore Climate Change, And We Let Them

Fairfax - Julien Vincent*

Last week, APRA Executive Board member Geoff Summerhayes warned the transition to a low carbon economy is already underway and “institutions that fail to adequately plan for this transition put their own futures in jeopardy, with subsequent consequences for their account holders, members or policyholders.”
The speech followed a Centre for Policy Development discussion paper on how companies can follow the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).

Swept under the rug: Australia's biggest companies aren't taking climate change seriously enough.

The TCFD has set the standard for climate risk disclosure since its draft recommendations were released a year ago. Its final recommendations were backed by over 100 companies with a combined market capitalisation of over $3 trillion, which should give an idea to how seriously the TCFD is being taken.
But is it though? Market Forces has just examined the ASX top 50 companies’ responses to the TCFD. Only seven had delivered on the key recommendation to disclose information on how their company performs in a scenario where global warming is held below 2°C, while 31 don’t even mention the TCFD recommendations, let alone implement them.
It isn’t the first warning sign that corporate Australia is failing to manage climate risk. The Australian Council of Superannuation Investors' (ACSI) own research shows just 48 companies in the ASX200 have set climate targets.
Both the Investor Group on Climate Change (IGCC) - a group of Australian and New Zealand investors focusing on the impact that climate change has on the financial value of investments - and ACSI called for the implementation of the TCFD recommendations well before the vast majority of ASX companies published their annual/sustainability reports this year.
But responses to questions at annual general meetings suggest these calls are falling on many deaf ears.
Earlier this year, Santos said that, despite being supportive of the Paris climate change goal of holding global warming below 2 degrees, it was actually basing its own scenario analysis on a future where global warming increases by 4 degrees.
Similarly, Whitehaven Coal laid claim to a bright and prosperous future at their AGM, citing a 10 per cent increase in electricity generation from coal by 2040 projected by the International Energy Agency (IEA).
This stat is plucked from the IEA’s “Current Policies” scenario, consistent with up to 6 degrees of global warming and in no way reflective of reality.
These are two ASX 200 companies telling investors they’re planning for a future where the world succumbs to runaway global warming.
Karoon Gas Chairman David Klingner wasn’t willing to set a greenhouse gas reduction target, claiming it would be meaningless, despite this being another key TCFD recommendation. However, when asked if the company would keep offering executive bonuses for meeting exploration targets, effectively incentivising the search for likely stranded assets, “You betcha!” was the answer.
Boral appears exposed to multiple climate risks, with an energy bill of $300 million per year, annual greenhouse gas emissions of 2.5 million tonnes and having lost $10 million this year due to the impacts of US hurricanes. The company described climate change at its AGM as a mega-risk that will affect all businesses yet, moments later, admitted it didn’t consider climate change a material business risk when preparing the financial reports.

Having it both ways
Others, like Oil Search, seem to want to have it both ways. Oil Search is currently analysing how its portfolio performs in a 1.5 degrees Celsius and 2 degrees Celsius economy. While this move is laudable in and of itself, Carbon Tracker had already found Oil Search was on track to spend more than half of its upstream capex on oil and gas that could not be burned within the 2 degrees carbon budget, meaning the scenario analysis would likely make for nervous reading for investors.
Since then, Oil Search has announced a planned expansion of the PNG LNG project, and taken a stake in an undeveloped oil field in Alaska, increasing its likely exposure to stranded assets in a low carbon economy.
Perhaps most stunningly, despite Australia’s big four banks moving to adopt the TCFD recommendations in the second half of the year, Macquarie Bank’s Chairman Peter Warne admitted at the company’s annual shareholder meeting in July that he didn’t know what the TCFD was.
These are just a few examples but, on the whole, the mis- or non-management of climate risk is rampant in corporate Australia.
Whether the situation stays like this is up to investors. They have options available to force the issue with the companies they hold, take punitive action such as voting against directors or remuneration packages, or simply divesting from companies that won’t get with the program.
But after a year of companies calling investors’ bluff on their own expectations, what happens next will tell us whether investors are prepared to match their words with outcomes.

*Julien Vincent is the executive director of Market Forces.

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