Climate change could slash the viability of farms in some parts of Australia over the next forty years as rainfall totals shrivel and days of heat stress increase, the Commonwealth Bank said in a new report.
The bank - which also reported a modest drop in annual profit and a plan to exit lending to thermal coal by 2030 - said it had done the analysis to "understand the risks [and] identify ways to support our customers".
 |
| Hard times down on the farm - and they may get even harder as climate change bites, Australia's biggest bank says. Credit: Christopher Lorrimer |
The bank found grain-growing regions could see profitability declines as productivity falls by 50 per cent in some areas by 2060, compared with a 2018 baseline, with "changes in predicted rainfall" the driver.For the livestock sector, profitability could drop by 40 per cent over the same time period because of a decline in pasture quality and quality.
The dairy industry, too, faces "falls in most regions" of as much as 40 per cent drop in profitability by 2060 because of the rising likelihood of significant heat stress, the bank said. After five consecutive days of extreme conditions, cows can stop lactating and producing milk.
 |
| The CBA sees climate change hitting farming hard in some parts of the country. Credit: Glenn Hunt |
The Commonwealth Bank is among the first big lenders to signal concern about farming productivity in the future.The bank, though, said "adaptive measures" could be moderate and even reverse those declines, such as the introduction of genetically modified grain able to increase the crop's resilience to extreme weather.
Similarly, new technology could help reduce overgrazing, while shade and water sprays could help keep cows cool, the bank said.
Even so, conditions may still deteroriate too much for some farms to cope.
"[T]he trend of declining rainfall could result in some regions becoming significantly less viable for crop production in the long term," the bank said.
Erwin Jackson, director of policy at Investor Group on Climate Change, said the physical effect of climate change was "increasingly recognised as a systemic financial risk requiring the same levels of governance and active management as any other dimension of material financial performance".
"Sophisticated investment tools are rapidly emerging to strengthen the resilience of infrastructure, the economy and our communities to the effects of climate change," he said.
"However, there are a number of practical barriers to investing in and supporting climate change adaptation [and] governments have a clear role in helping overcome these barriers."
Links
- Commonwealth Bank Risk Report (pdf)
- Action Now’: The Farmers Standing Up Against ‘Wilful Ignorance’ On Climate
- This Is A $15 Trillion Opportunity For Farmers To Fight Climate Change
- Act Now On Emissions Says Farmers For Climate Action
- Life After Solving Climate Change: Not Mud Huts And Gruel But Clean Air And Warm Homes
- The Future Of Farming In The Era Of Climate Change
- Climate Change Making Drought Worse, Farmers' Federation Chief Says
- 'No Real Appetite': Former Farmers Chief Lashes Ministers Over Climate Link To Drought
- Australia Is Devastated By Drought, Yet It Won't Budge On Climate Change
- Australia Struggles With A Devastating Drought While The Government Ignores Climate Change
No comments:
Post a Comment