Australia one of the countries most exposed to climate change, bank warns
Globally, the World Health Organisation forecasts that around 250,000 additional deaths annually will be attributable to climate change.
HSBC developed the report as a tool for investors to provide in-depth information on countries' climate change risk profiles, on their energy issues, risks to business operations, supply and demand and logistics as well as their long-term sustainable development issues.
Australia was ranked as highly sensitive to the physical risks of climate change, with predictions of more storms, floods, rain and bushfires. New Zealand ranked as one the nations least exposed to those risks.
Hurting the economy
Late last year, Deutsche Bank also developed a tool to forecast where its investments across the globe may be impacted by natural disasters brought on by climate change.
The German bank's economic modelling estimated that if carbon emissions aren't reduced throughout this century, per capita GDP will be 23 per cent lower than it otherwise would be.
Principal Advisor at The Australia Institute, Mark Ogge, said Australia's industries and infrastructure, such as coastal based business, roads and rail, and both commercial residential assets, are at significant risk from climate change-related events.
"There's up to $236 billion of infrastructure at risk from a one-metre sea level rise alone," Mr Ogge said. Temperature increases also put Australia's tourism industry at risk, with a rising number of days above 35 degrees celsius in holiday destinations such as Far North Queensland, he added.
Australia is the only developed market that ranked within the top ten in HSBC's report for energy transition issues due to its high levels of fossil fuel exports – particularly coal – and is one of the few countries that has seen these exports growing as a percentage of their gross domestic product.
HSBC sees risks to the nation's economy as Australia attempts to shift its energy and economic system, currently underpinned by fossil fuels, to one with a greater mix of renewables.
“Many countries and other actors are at risk of seeing parts of their old energy economy becoming effectively ‘stranded assets’ – or economically non-viable – given the relative economics of alternatives and new breakthrough technologies,” the HSBC report stated.
“Managing the transition to a lower carbon economy is key to mitigating downside risks," the bank said. "We think achieving diversification is key.”
The good news
However, it is not all bad news. Australia was ranked amongst the top three nations – along with New Zealand and Norway – with the greatest potential to respond to climate change and financially prepare the country for a changing environment.
Despite Australia’s frequent drought conditions, it was seen as a market with adequate water resources availability, while Singapore was the developed market most at risk over water availability.
Covering energy and policy at Fairfax Media.
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