Adaptation and Disaster Risk Reduction Seminar - Kathryn Matthews, Deloitte

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Kathryn Matthews, Director of the Economic and Infrastructure Advisory Group at Deloitte, presented at our seminar entitled 'Adaptation and Disaster Risk Reduction: Shared Risks to Shared Values: A Business Case' on Tuesday 24 June 2014 in Melbourne.

Held as part of our Sustainability Leadership Series, the seminar brought together experts and practitioners from across government, business, academia and civil society to provide the business case for disaster risk reduction and climate adaptation.

For more information about this seminar and the UNAA Sustainability Leadership Series please visit www.unaavictoria.org.au/education-advocacy/masterclasses/

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Adaptation and Disaster Risk Reduction Seminar - Kathryn Matthews, Deloitte

  1. 1. Building our Nation’s Resilience to Natural Disasters Kathryn Matthews Melbourne, 24 June 2014 Australian Business Roundtable for Disaster Resilience and Safer Communities
  2. 2. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd Background to the Paper • Roundtable members
  3. 3. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd What is the (economic) problem? • The problem is large: The total economic costs of natural disasters in Australia are estimated to average around $6.3 billion per year – every year. • And it is getting larger: In today’s money (i.e., taking out inflation), the total annual cost of natural disasters is forecast to reach $23 billion by 2050. • An ounce of prevention would make sense: An increase in pre-disaster resilience expenditure could see Australian Government expenditure on future natural disaster response costs cut by 50%.
  4. 4. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd Why will costs rise? • Conservative costing: Even after allowing for inflation, costs will rise notably. That isn’t due to any allowance for the effects of climate change. • People and place: Partly the lift in costs will be due to population growth. And partly it is because population density will lift • Housing and infrastructure values will lift too. • But another factor will be WHERE we will live: Australians will increasingly live in the ‘pretty bits’ of our nation. But many of them are low lying coastal regions, which tend to be more at risk in natural disasters.
  5. 5. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd It can be done … History proves it, and a range of economic studies suggest the same Case Studies – Range of Benefit Cost Ratio of specific resilience measures
  6. 6. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd So ‘prevention’ makes sense. But why is it so hard? • Good progress has been made in some areas: for example, the National Strategy for Disaster Resilience, Geosciences Australia, Bushfire and Natural Hazards CRC. • But fresh impetus and new approaches are required if we are to address the most difficult challenges, such as existing settlements. • Improving resilience can be achieved with the combination of: • aligned government financial support (consistent with reduced future disaster relief and recovery costs to government) • appropriate price signals from business, and • increased awareness of risk by individual home owners. • However the coordination challenge is large and alignment of incentives is critical.
  7. 7. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd The key recommendations 1. Coordinate: Improve coordination of pre-disaster resilience by appointing a National Resilience Advisor and establishing a Business and Community Advisory Group. 2. Commit: Commit to a long term annual pre-disaster resilience fund. 3. Invest: Identify and prioritise pre-disaster investment activities that deliver a positive net impact on future budget outlays.
  8. 8. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd Building a more resilient Australia
  9. 9. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd Where to next? • The Productivity Commission is considering these issues and due to report at the end of the year • A second paper on the issues around data and research is being finalised now • To get involved go to the website and register interest. http://australianbusinessroundtable.com.au/

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