Insurance is set to get much less affordable in Australia, with the cost of natural disasters forecast to triple over the next 30 years.

The CSIRO’s decadal megatrends report, Our Future World, published today, warns that extreme weather caused by climate change will cost the country more than $39 billion annually by 2050.

Key points:

• COVID and Russia’s invasion of Ukraine have heralded a seismic shift in our near-future direction.
• Climate change is set to triple the cost of natural disasters in Australia without urgent government spending on resilience, according to the report.
• Food security will be a key challenge, with alternative protein sources necessary to meet growing demand

The report is intended to identify the key global forces that will shape our lives in the coming decades, with “the view to guide long-term investment, strategic and policy directions,” according to the CSIRO.

Australia’s north is already hardest hit by rising insurance premiums, with home and contents insurance costing about 1.8 times more than in the south, as of 2020.

And on average, almost double the number of households above the Tropic of Capricorn — about 20 per cent — are already foregoing insurance, compared to those in southern Australia, the report states, citing data from the ACCC.

The megatrends report also echoes recent warnings from the Insurance Council that at least $30 billion will need to be spent to protect coastal communities from sea level rise, and on relocating some vulnerable communities.

Globally, as many as 150 million people living in coastal areas could be vulnerable to the impacts of sea level rise by 2050, but that figure could be far more if Antarctica becomes less stable, the report says.

The report, last released a decade ago, is a synthesis of the CSIRO’s own data and independent data, according to Stefan Hajkowicz, principle scientist in CSIRO’s strategy and foresight team.

“With climate change, some of the things we were talking about as predictions in 2012 have become a reality for many Australians,” Dr Hajkowicz said.

“The floods have been very tough, but the other ones are heatwaves and droughts.

“Heatwaves are actually more deadly [than floods].
We can see what’s happening in Europe now, it’s pretty shocking.”

COVID brought seismic shifts

As well as adapting to climate change, the CSIRO has identified six other megatrends that will define our coming decades.

Broadly they are:

• health;
• artificial intelligence and autonomous systems;
• geopolitical shifts;
• digital and data economies;
• resource pressure and biodiversity; and
• diversity, equity and transparency

Dr Hajkowicz said today’s report was an invitation to try to understand what challenges are coming.

He said in doing so, we might even be able to thrive in changing circumstances.

“This report is a message to build resilience, to stretch the scenarios beyond where we previously thought we have to.

“We have to get out of our comfort zones and ask: how does our infrastructure and our economy continue to work in this challenging scenario?”

Source
ABC News