A national security problem – Sea Level rise

21 Feb
By David Holland (BAS Env Planning; Grad. Dip. Env. Mngmt)

Introduction

In 2015 the effects of climate change are starting to be felt by Australian communities. Although there are still some who either do not recognize that climate change processes are affecting our daily lives or believe climate change is a natural process, which is the phase of global warming as part of a cycle of global weather patterns from cooler climates to warner climates that have not been affected by human activities on the planet.

These people tend to discount the effects of burning fossil fuels intensively over the last 100 years or so.  They do not recognise that over time concentrations of certain gases in the atmosphere including carbon dioxide have and are affecting the climate.

Presently many of the effects of this warming pattern are relatively mild but over time unless progress is made to curb carbon emissions these effects will impact the economics of Australia and every individual living within Australia.

However climate change deniers and climate change skeptics suggest that if there is a process of global warming happening today, there is nothing we can do about it. Human activity over the last 150 years in digging up and burning fossil fuels has had little to no impact on global temperatures.

Science tells us just the opposite. Scientific records tell us that temperatures have risen much faster than the trend over the last 100 years than any time in the last 1000 years.

This warming is not just a natural cycle of warming, but an accelerated warming principally caused by the industrial revolution’s use of fossil fuels to drive the economic engine of world commerce.

Scientists have produced data that shows the world has warmed on average one degree since the year 1900. Scientists have predicted that if the average world temperatures warm more than two degrees since that time there will be a cycle of events that will increase global temperatures even if the global population stopped using fossil fuels from that point onwards.

There is a wide range of impacts associated with global warming that should be considered in Australia and planned for to help mitigate the effects on the Australian people, the way we live and on our economic status in the world’s economy.

The particular climate change impact that we will be focusing on in this paper is climate change induced sea level and coastal flooding caused by extreme weather and tidal events.

Australia is an island and although large will have the effects of sea level rise, severe weather events and tidal inundation around its entire coastline. Much of the population of Australia resides in coastal regions and much of this population is and will increasingly be subject to the effects of wild weather as global temperatures increase.

A smaller proportion of the population live in lower lying areas and the land they occupy will be subject to a variety of effects which include rising sea levels, tidal inundation and higher floods caused by more precipitation caused by more extreme weather events.

Some politicians have suggested that the mitigation processes related to sea level rise should be managed at the State and Local government level. This option has merit in that the bulk of the work in managing these effects should be through State and local government planning instruments. But State and local government do not have the capacity to coordinate strategies to mitigate the effects of the following kind. These are impacts on the social and economic fabric of the nation. This will require a nationwide a response to the effects of climate change induced sea level rise. Only the Federal government will have the overall capacity to co-ordinate an Australian wide approach to these effects on the economy, the environment and the social cohesion of all Australians.

One of the mechanisms that could be used to ensure a coordinated approach would be through enabling federal legislation that would be agreed upon through the COAG process. This legislation would then be dovetailed into all State legislation and then through State government consultation with agencies and local government incorporated into local government planning schemes. This would ensure a best practice approach which would be fairly and uniformly applied across the country.

This process of ensuring a coordinated approach to mitigate the effects of climate change in this one area of sea level rise and associated effects goes to the issue of national security.[1]

The National security of our economic systems within Australia.[2]

Security of markets is about protecting markets within the economy.

Coastal Property markets

The protection of coastal property markets is very important in a growing and prosperous country like Australia. The property market is the bedrock of the economy and a solid source of asset security for the financial sector in Australia.

Potentially affected land by sea level rise up to a level of 1.1 meters above current sea levels hold in the vicinity of $300 billion worth of asset value according to an ABC report in 2013. This asset value does not take into consideration any additional rises due to tidal inundation in storm events.

If people were to overnight loose confidents in the value of these assets, banks would want to foreclose on loans as many properties are included in an asset list securing the loan. A collapse in property values would affect the financial sector and a scarcity of available funds for business using coastal properties as collateral would mean that extreme pressure would be put on business and on jobs court in this situation.

Insurance cover scarcity

Risks associated with buying such properties will mean that insurance providers will not insure coastal properties. At present some of these properties are the most expensive in the total real-estate market and a collapse will deviate the property market.

What are the processes by which such a collapse may occur? Under the current coastal property boom prognosis it is likely that the market will continue to increase without abating until a loss of confidence in the market occurs.

What would be the likely cause of a loss of confidence in the coastal property market without any intervention from the federal or state government? It is likely that the upon a catastrophic storm event that produces very high tides and extensive flooding coastal property owners will start to reassess the viability of staying on the coast.

With the insurance industry being saddled with an overwhelming number of claims for damage and destruction of homes and property, the industry would realise that many insurance premiums are massively too low and a reassessment would follow which would increase premiums. (In this scenario there is a possible situation where an insurance company will not insure a particular property.)

In addition the local governments will be shocked into the reality that they are massively exposed to risk of litigation because they had not responsibly informed the property owners of the heightened risk of inundation due to changing climatic conditions.

Then when coastal property owners attempt to reinsure their properties they find that the premiums are astronomically high or even worst that they cannot insure their property at all due to the risk on the property after a reassessment of risks of storm event damage by the insurance companies.

The devaluation of coastal properties

After a very severe storm or a chain of storms producing flooding and the likelihood of a hike in insurance premiums, property owners will be clambering to move away from the coast. Supply for coast properties will rise and as a result coastal property prices will plummet. This drop in asset value will impact the ability for many businesses to operate in a constrained credit environment.

To explain this we must look at the mechanism that allows businesses to borrow. Businesses borrow from financial institutions like banks because they have a capacity to pay back the loan. Often security on a loan is a property and is put up by the borrower as collateral on the loan in case the ability to pay the loan by the borrower evaporates. If the collateral for the loan is a devalued coastal property then the lender may call in the loan on the basis of the reduced value of the asset to lower the exposure to the loan by the lender or financial institution. This will adversely affect the business. Even if the loan is not called in, the business may need to gain more finance in a growing business. If the coastal property asset used as collateral is a devalued coastal property the business may not be able to gain further finance from the lender.

This process of a financial freeze on a section of the business community will affect jobs and growth in Australia’s economic engine at large. A flow on effect of this is a down turn in tax receipts income and business taxes which affects government revenues.

Local and State governments will be under pressure to raise rates and funds.

With a drop in coastal property prices Local government will have little choice but to increase rates putting further pressure on rate payers and business owners.

With less money in the economy discretionary spending will be down and marginal businesses will go out of business further reducing Australia’s economy.

Local government and State governments will be under extreme pressure to mitigate the impacts of tidal inundation and prolonged flooding. Massive amounts of money will be needed for projects along the coastal regions of the Australian coast. State and local governments will not be able to supply this money even if their revenues had not dropped due to the economic downturn.

Politically speaking there will be a questioning of the fairness to the whole community on spending such a large amount of money on owners of high value coastal properties and propping them up for a few years to keep these properties above the flood waters, just so these owners will not loose asset value of their property in the near term.

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References:

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WWF, Salt water intrusions into ground water supplies, http://wwf.panda.org/about_our_earth/aboutcc/problems/rising_temperatures/sea_levels/, (accessed Jan. 2016)

Armstrong T J, Determination Of Aquifer Properties And Heterogeneity In A Large Coastal Sand Mass: Bribie Island, Southeast Queensland, Bribie Island study of freshwater ground water in a sea water surrounded island, https://core.ac.uk/download/files/310/10884977.pdf, (accessed Jan. 2016)

Lapowski I, Oct 2015, Wired Web site, How climate Change became a national security problem. Ref. http://www.wired.com/2015/10/how-climate-change-became-a-national-security-problem/ (accessed Feb. 2016)

Abel N, Gordard R, Harman B, Leitch A M, Langridge J, Ryan A, Sea level rise, coastal development and planned retreat: analytical framework, governance principles and an Australian case study https://www.researchgate.net/profile/Anne_Leitch/publication/236005298_Sea_level_rise_coastal_development_and_planned_retreat_analytical_framework_governance_principles_and_an_Australian_case_study/links/0c96051870c0b6bfe8000000.pdf (accessed Jan. 2016)

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ABC News, 14th Jan 2013, $300 billion of properties at risk with sea level rise of up to 1.1 meters, http://www.abc.net.au/news/2013-01-14/how-will-rising-seas-impact-australia/4460688, (accessed Jan. 2016)

ABC News, Prevention Web – Australia; Rising sea levels may put $300 billion of properties at risk – source ABC news, http://www.preventionweb.net/english/professional/news/v.php?id=30516, (accessed Feb. 2016)

Garnaut review, Chapter 6, Climate Change impacts on Australia, http://www.garnautreview.org.au/pdf/Garnaut_Chapter6.pdf, (accessed Feb. 2016)

Holland David, Habitat Association Blog site, Planning for Sea Level Rise Risk in some Coastal Regions of Australia – A Market Approach, https://habitattownplanningforum.files.wordpress.com/2015/04/planning-for-climate-change-the-risk-model-for-sea-level-rise-discussion-paper-3rd-edition-rev1-20151.pdf, (accessed Feb. 2016)

Australian Government, Australian stories, Australian Farming agriculture – grazing and cropping, Effects of Climate change on Agriculture and food production at risk due to sea level rise, http://www.australia.gov.au/about-australia/australian-story/austn-farming-and-agriculture, (accessed Jan. 2016)

Holland David, Habitat Association Blog site, Climate Change related sea level rise Policy changes in NSW, https://habitattownplanningforum.wordpress.com/2014/04/16/climate-change-related-sea-level-rise-policy-changes-in-new-south-wales/ (accessed Feb. 2016)

Payet Rolf, Antoine Moustache, Sea Level Rise, Climate Change and Its Impacts on Food Security in SIDS: Challenges and Opportunities, http://www.fao.org/fileadmin/user_upload/foodclimate/forum/SRLF_Payets.pdf

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