Bushfires ravaging Australia are expected to cost vast amounts of dollars in recovery efforts and the nation’s bills for tackling natural disasters risk soaring in coming decades with worsening climate change.
Record-breaking temperatures and severe droughts have fuelled the fires that have burnt countless hectares across the country. At least 24 people and thousands and thousands of animals happen to be killed.
Data from the Australian government Bureau of Meteorology shows December's mean temperature was 3.21C warmer compared to average for the month. Ed Hawkins, a professor of climate science at the University of Reading, said the country's mean December temperature had warmed about 1.4 times faster compared to global annual average temperature over the past century.
But pro-coal Pm Scott Morrison has denied the hyperlink between global warming and the unprecedented concentration of bushfires across the country, describing it as “misconstrued”.
On Monday, Morrison announced the creation of a National Bushfire Recovery Agency, initially funded to the tune of $2billion AUS ($1.4bn) over a two-year period to assist families, farmers and businesses get over the fire-front.
However, the money could miss the recovery effort needed.
“If further funds are required, further funds is going to be provided. We will do whatever it takes,” Morrison said. “What we are focusing on here is the human costs and also the rebuilding cost for people's lives.”
The money will be used rebuild roads and telecommunications infrastructure, replenish producers’ livestock, provide mental health support and help restore the impacted environment and wildlife. The funds are due to seriously top of disaster recovery payments and allowances, which $100m AUS ($69m) has reached communities, based on the government.
The agency is going to be modelled on a recovery fund set-up following cyclone Yasi and the Brisbane floods in 2011. At the time, that fund paid out $5.6bn AUS ($3.9bn) over six years.
Ten years ago, a series of bushfires over the state of Victoria known as the Black Saturday bushfires cost at least $4bn AUS ($2.8) in damage, based on a quote by the royal commission faced with your research.
“It would be a mistake to treat Black Saturday like a 'one-off' event,” the 2010 report noted. “With populations in the rural -urban interface growing and the impact of climate change, the potential risks associated with bushfire are likely to increase.”
On Monday, the insurance coverage Council of Australia said it has handled a lot more than 6,000 insurance claims in the states worst-affected by the bushfire crisis, New South Wales, Queensland, South Australia and Victoria. Insurance losses have so far been estimated at $431 million AUS ($297m).
The bushfire smoke that descended on Sydney cost the city between $12m AUS ($8.3m) and $50m AUS ($34.5m) a day, based on Terry Rawnsley, a regional economics expert in the consultancy SGS Economics and Planning.
For Richie Merzian, climate and energy programme director in the Australia Institute think-tank, the recovery fund announced by Morrison will are unsuccessful if it isn’t accompanied by further climate policies.
“The $2bn AUS fund is yet another ad hoc measure with no clear long term technique to address global warming. Nor is it anywhere near to enough,” he told Climate Home News.
The Australia Institute has called around the creation of a National Climate Disaster Fund, which may be financed by a $1 AUS levy for every tonne of CO2 resulting from producing coal, gas and oil in the country.
The levy could raise around $1.5bn AUS ($1bn) annually, based on the think-tank.
A 2023 analysis by Deloitte Access Economics found disasters cost Australia $9bn per year typically. The report found the price could reach $27bn per year by 2050.
“A modest levy on fossil fuel producers is needed to shift the economic burden of those disasters from regular Australians to the coal and gas companies that are fuelling the climate crisis,” said Australia Institute's deputy director Ebony Bennett.
The costs of wildfires is difficult to estimate due to the indirect costs like the destruction of wildlife and also the environment, harm to public health and harm to tourism.
Swiss Re, among the world's largest insurance companies, found direct economic losses only represent a small fraction of the true economic impact, which can span years.
Across the world, the economic cost of wildfire has grown in recent decades. In 2023, direct economic losses from wildfires amounted to $21bn worldwide – up from $6bn in 2023, according to Swiss Re.
