Lethal Heating: 11/19/20

19/11/2020

(AU) Climate Change To Inflate Insurance Costs In Flood And Bushfire-Prone Communities

ABC News - Sinead Mangan | Alex Hyman | Sofie Wainwright

A leading climatologist says Australians love living among trees and by the sea, but that may not be safe in future. (ABC News: Megan Hendry)

Key Points

A climate risk analyst says home insurance premiums could increase to the point where many areas become unaffordable
An insurance spokesman says that has not happened yet, but wants the Government to invest more in disaster mitigation
In a NSW town hit by fire in 2018, only 16 of the 69 houses had been rebuilt due to insurance issues

Severe weather has rendered parts of Australia uninhabitable, properties will become uninsurable, and people will be priced out of their homes, leading climate scientists warn.

Across Australia, 383,330 addresses were classified as high risk in 2020.

That number will almost double to 735,654 by 2100, according to a report produced for local government by analysis platform Climate Risk Engines.

Leading climate risk analyst Karl Mallon, chief executive of Climate Valuation, which provides extreme weather analysis on construction and development to banks and the property industry, said an increasing number of properties were in the insurance "red zone".

"Premiums are going to increase and they may become unaffordable," Dr Mallon said.

Insurance Council of Australia spokesman Campbell Fuller said no region in Australia was uninsurable — for now.

"However, it is possible some regions may become difficult to insure in the future," he said.

"Unless governments invest in appropriate mitigation and adaptation strategies."

Leading climatologist Greg Holland says climate change is no longer a future problem. (Supplied: Greg Holland)

This week, the CSIRO and the Bureau of Meteorology produced data that found Australia's climate had warmed by 1.44 degrees Celsius, plus or minus 0.24C, since 1910.

Leading climatologist Greg Holland, a fellow of the Australian Meteorological and Oceanographic Society, said the science clearly showed Australia's climate was continuing to warm and that the frequency of extreme events was increasing.

"We've been talking about climate change as something in the future — it's now in the past," he said.

"The reason people are experiencing things like massively increased intensity and types of bushfires, along with the other extremes weather brings along, is because it is here now."

Jo Dodds says even with the best insurance many Tathra residents have not been able to replace their homes. (Supplied: Tony Dean)

First the fire, then the finance

Bega Valley councillor Jo Dodds has witnessed the devastation of a major bushfire firsthand.

In early 2018, her home near Tathra, New South Wales, was threatened on three sides by bushfire.

She could see smoke rising from the homes of her friends and could hear gas bottles exploding.

Cr Dodds said 69 houses were lost in that fire — to date only 16 had been rebuilt.

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A major impediment to rebuilding, she said, had been insurance.

"Even people with gold-plated insurance … are still finding they can't replace the house they had with a similar house," Cr Dodds said.

"Some people may be finding they can't afford the level of insurance, and in some cases there are no insurers that are willing to insure.

"I haven't heard of cases of that yet, but there is no doubt it is in everybody's minds."

Dr Mallon described communities like Tathra as victims of a changing climate.

"These are people who, through no fault of their own, are facing costs and financial threats to their families that they can't afford," he said.

Insurance premiums have skyrocketed for businesses in Mackay. (Supplied: Beck McPherson)

'Data 30 years out of date'

Retiree Erna-Jean Pozzetti and her husband, Claudio, own a large stake in Ocean Resort Village, a unit complex in Mackay in northern Queensland, an area vulnerable to cyclones and floods.

When they bought 14 years ago in 2006, insurance on the property cost $18,000 a year.

Their latest strata commercial bill quote was for $174,000 — more than triple last year's amount.

Karl Mallon says insurance premiums are rising as climate change causes more weather extremes.

Dr Mallon said this type of inflation would become commonplace for areas prone to natural disasters.

"When you buy a house or issue a mortgage you are taking on a 30-year commitment," he said.

"Thirty years is a long time in climate change.

"In principal an insurance company only takes a one-year view of the future.

"But what we are seeing is over 30 years there will be substantial changes.

"Someone might be able to afford an insurance bill today, but it doesn't mean they can later on in their mortgage."

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Dr Mallon said insurance companies had been caught off guard by the severe weather caused by climate change.

"[Insurance premiums] are based on data that is frankly 20 or 30 years out of date," he said.

"They are playing catch-up to get their premiums to where they need to be.

"We have got properties not just in the north of Queensland, but big cities like Melbourne and Sydney, where the risks are extremely high because the wrong properties are being built in the wrong place."

Moving away from disaster zones

Australians love to live among the trees and by the beach, but Dr Holland said in parts of Australia this would simply be too dangerous.

He said governments would have to move people en masse from areas prone to severe weather.

"It's happening around the world," he said.

"We have gone for the sea change and tree change option and moved into these glorious areas without taking too much notice of the stark danger that exists there and existed there even 30 or 40 years ago.

"We could put that thought off because it was a relatively rare event — but as it has become more common we do have to make that decision."

Dr Holland says living among the gum trees is becoming increasingly dangerous. (Supplied: Adam Meredith)

Dr Holland said governments could not sit back and watch people get priced out of their homes.

"There are some hard decisions that have to be made," he said.

"I understand this, because I live on a farm where we live with the fear of smelling smoke every day during summer.

"But the facts are there are some regions that are uninhabitable, that we are in at present — unless you have the money.

"We put a lot of blame on the insurance company because they are the sort of people who are charging you that money, but they are caught by the same thing.

"The Government has done very little in the way of helping out those who are in trouble and it has done pretty much zero in stopping the climate change happening."

Dr Mallon said governments needed to provide grants and investment to help communities build appropriately in areas of bushfire and flood.

"It is not their fault," he said.

"They are not the polluters, but we need to step in and support these communities financially."

Mr Fuller said governments needed to invest in mitigation to future-proof communities.

"Implementation of stronger building codes, improved land use planning and permanent mitigation measures, where necessary, will be key to ensuring an insurable future," he said.

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(AU) The Australian philanthropists spending big and fast to fight catastrophic climate change

ABC Radio National - Belinda Sommer

Julie and Jeff Wicks' foundation is designed to run out of money. (Supplied)

When Jeff Wicks retired, he and his wife Julie reflected on their life in Queensland. They asked themselves, how much is enough?

They decided they had more than enough money to live on and they wanted to give the rest away.

Now.

So the Wicks set up a private philanthropic foundation — one of 1,600 in Australia.

"We're probably giving away each year maybe 10 times what we need to live," Jeff says.

Most foundations operate through the investment of a main sum, or the 'corpus', and profits are used for grants.

But a growing number of Australian philanthropists, like the Wicks, are establishing foundations designed to run out of money.

They see no point in continuing giving beyond the next decade — which will be critical in the fight against climate change.

It's called spending down.

Throwing everything at the climate problem

Sue McKinnon and her husband John also run a philanthropic foundation, which will give away about $10 million over 10 years.

Sue McKinnon runs a philanthropic foundation with her husband aimed at avoiding catastrophic climate change.(Supplied)

Initially, the family foundation was to have continued well into the future.

But Sue says "the best legacy we could leave is one of avoiding catastrophic climate change".

"I know Australia is a small place, but it's a big actor on the world stage when it comes to fossil fuels, social license and the control and influence that various players here have," she tells RN's The Money.

"We decided that more needs to be thrown at it, we need the best brains and the most money in the room."

The McKinnon Foundation fights climate change through the legal and financial sectors.

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For example, they've been able to support the work of lawyer David Barnden, who this month settled a landmark case against super fund Rest over its climate change disclosures.

"Finding other really terrific people to do it with really helps. Whether they're some of the amazing staff in these organisations, the lawyers, the finance experts, and so on," Sue says.

In other circumstances, it might be deploying capital to obtain a major shareholding or a seat on the board.

Sue notes that advocacy can be frustrating and difficult to measure — but that's where her business background comes into play.

"Our whole selves come to this. Our skills, education, networks, and the energy and the time that we can put into this. That's what we work on."

A 'big, hairy, ambitious goal'

Norman Pater wants to spend $40 million in the next 10 years.

He's just returned from a trip to the mid-west wheat belt of Western Australia where he bought three farms, each about 2,000 hectares, which are being reforested as part of his Carbon Farming Foundation.

Norman Pater and his wife, Gita Sonnenberg. (Supplied)

"Our immediate goal is to revegetate biodiversity, at least one million hectares," the former IT entrepreneur says.

"This is the big, hairy, ambitious goal that we've set ourselves.

"I get the sense that the neighbours think we are loco."

In 2011 Norman attended a training weekend with former US vice-president and environmentalist Al Gore.

That, he says, "was really the big awakening for me".

A farm being revegetated in Western Australia as part of a project funded by the Carbon Farming Foundation. (Supplied)

His new farms will develop, test and scale carbon farming models.

"At the end of the day, we want to make carbon farming profitable, such that many other farmers start to engage in the same activity," Norman says.

The farms are aimed at developing carbon farming models that can be scaled-up. (Supplied)

Accredited farmers can currently receive about $16 a tonne under the Australian Carbon Farming Initiative, but Norman says that isn't enough to encourage farmers to plant trees.

"We're approximately $10 a tonne south of where we need to be to break even, on our own land," he says.

"What we're trying to do is to develop the metrics and the success factors that would give the highest possible chance of success in the plantings."

He says this is a way he can make a real difference.

"The Carbon Farming Foundation is intended to be absolutely real and tangible and long lasting, irrespective of what the political twists and turns may take in the future."

Norman and Gita planting in the WA wheatbelt this winter. (Supplied)

Something worth more than money

And then there's the Wicks.

Jeff started buying property as a hedge against his career in aviation.

"The trouble with pilots, if you lose your license, you're not really qualified for a easy transition to another career," he says.

With no children, the Wicks have set up their foundation to spend down over the next decade.

"Our view is that what we do in the next 10 years, or maybe even the next five years, will absolutely be absolutely key to the eventual outcome. Let's do it now," Jeff says.

The ACME Foundation directs money to about 25 or 30 different organisations. One of them is the climate change think tank, Beyond Zero Emissions.

"They've recently come out with their Million Jobs Plan in response to the recovery from COVID-19," Jeff says.

"That's quite an ambitious plan and they're getting quite a bit of traction with that, so that's quite a stunning plan that they're rolling out and trying to get government support, both state and federal."

The feel-good factor has Jeff and Julie hooked.

'It's something we can't stop doing. This is our path for the rest of our lives, so we're pretty committed, and we really enjoy it," Jeff says.

And he remains optimistic.

"The one cause for hope is that from the millennials, down into the younger generations, they're no longer focused solely on money," he says.

"In fact, quite often they'll work for less than they could earn just to be connected with organisations they're proud to be connected with.

"It's probably a change from my generation, a baby boomer. Money is not the driving force quite so much and that's a really positive thing for our future."

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(AU) Victoria Pledges $797m For Australia's Biggest Household Energy Efficiency Drive

The Guardian - Adam Morton

Measures include a $1,000 rebate for low-income residents to replace old heaters and upgrades to 35,000 social housing properties

The Victorian government says it will extend existing incentive schemes for home solar and battery systems as part of its $797m household energy efficiency drive. Photograph: David Mariuz/AAP

Victorians have been promised Australia’s biggest household energy efficiency drive, with the Andrews government pledging $797m to programs it says will cut power bills and greenhouse gas emissions.

Measures include a $1,000 rebate for low-income households to replace old heaters with modern split-systems, upgrades to 35,000 social housing properties and a new requirement that landlords keep rental properties at a minimum efficiency standard.

The state government said it would also extend existing incentive schemes for home solar and battery systems and offer a one-off $250 payment for concession card holders to help with bills.

Social welfare and environment groups said the commitments were likely to have an immediate impact, particularly for vulnerable households. They followed the government’s weekend announcement that it would spend $5.3bn building more than 12,000 public and community homes with a 7-star energy efficiency standard.

Luke Menzel, the chief executive of the national Energy Efficiency Council, said it was a “transformative investment” that would create thousands of local jobs, help the climate and save lives. He cited evidence that a similar New Zealand program led to $7 in benefits for every $1 spent, mostly through reductions in health costs and deaths.

Victoria’s energy, environment and climate change minister, Lily D’Ambrosio, said the Covid-19 lockdown meant most people had spent more on power bills than usual this year. “This pandemic has been hard enough without worrying about whether you can pay the power bill,” she said. “Not only will we help cover the cost, we’ll help Victorians make their home more efficient and fight climate change.”

The Coalition’s energy and renewables spokesman, Ryan Smith, said the help with energy efficient appliances was welcome but followed a substantial increase in electricity bills under Labor. He said a Coalition government would have given concession card holders a bigger rebate on electricity bills – $1,000 – and paid it directly to retailers, rather than require people to sign up online to receive it.

The Victorian commitment follows a cross-community push for governments to invest in improving energy efficiency to both stimulate the economy to drive a recovery from Covid-19 and help set up a long-term response to the climate crisis.

In May, groups representing business, the energy industry, property owners, unions and major investors wrote to the national cabinet arguing that Australia’s prosperity depended on eradicating greenhouse gas emissions, and that fixing inefficient buildings and industry should be a primary focus. They estimated a major national drive to improve buildings could create tens of thousands of jobs.

A similar case has been made overseas as part of a global call for a “green recovery”. The International Energy Agency has said energy efficiency upgrades are “job-intensive and strongly support economic stimulus goals”.

The Victorian announcement, which will form part of next week’s state budget, includes:

$335m for 250,000 low-income households to replace old wood, electric and gas heaters with energy efficient split systems.
$112m to seal windows and doors and upgrade heating, cooling and hot water in 35,000 social housing properties.
$14m to expand a rebate scheme for efficient appliances.
Increased funding for rebate schemes for rooftop solar, household batteries and efficient appliances.
New minimum energy efficiency standards for rental homes, which the government estimated would benefit tenants in about 320,000 poor-quality properties.

Emma King, the chief executive of the Victorian Council of Social Service, said the commitments were “good for people, good for the economy and good for the planet”.

The Brother of St Laurence’s executive director, Conny Lenneberg, said for many low-income households they would be the difference between “living in a bitterly cold home through the winter and a warmer, healthier home”.

Nicholas Aberle, a campaign manager with conservation group Environment Victoria, said the scale of the investment made Victoria “a clear leader” on energy efficiency. “It’s exactly the kind of economy-stimulating and job-creating climate solutions we wanted to see,” he said.

But Beyond Zero Emissions, a climate change think tank that recently released a “million jobs plan” to hurry the shift to a clean economy, called on the Victorian government to go further. Michael Lord, the group’s research lead, said it should aim to create net-zero energy “all-electric” homes that no longer relied on gas, and generated at least as much renewable energy as they consumed over the course of a year.

He said the nearly $800m commitment was “a good start” but the government could do more to stimulate private investment by setting up pilot schemes that showed net-zero energy homes were possible. “The closer to net-zero energy we build new homes and retrofit existing homes, the lower the running costs for the Victorians living in these homes,” he said.

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