When Australia’s National Climate Risk Assessment (NCRA) was released last week, headlines such as the above announced that “climate change could cost Australians $40 billion per year by 2050.” [emphasis, links added]
It turns out that the claim is demonstrably false. Let’s take a close look.
The NCRA asserts the $40 billion cost on p. 102:
The Colvin Review (2024) projected disaster costs across each state and territory for flood, bushfire, storm, cyclone and hailstorm for a moderate emissions scenario may total an annual cost of approximately $40.3 billion by 2049–50 (median value).
However, the Colvin Review actually says no such thing.
Here is what it does say (p.13):
Based on average estimates in 2023-24 real dollars, the forecast total economic cost of natural disasters across Australia in 2023-24 is $11.8 billion and is predicted to increase to $40.3 billion in 2049-50.
The 2049-50 cost of $40.3 billion considers the anticipated underlying growth in the impact of natural disasters due to factors including increased population, and number and average size of dwellings at risk.
These cost estimates do not consider underlying impacts of climate change.
The NCRA implied that Colvin Review projected future disaster costs under a “moderate emissions scenario” when, in fact, the Colvin Review only considered societal factors.
For a formal government assessment, this is, at best, incredibly sloppy.
If I were a reporter who breathlessly promoted the false statistic or a member of the public who digested it, I’d be pretty upset and being hoodwinked.
The figure below shows normalized Australian insured disaster losses from 1967 to 2025.¹ There is no overall trend, once losses are adjusted for societal changes.²
The methodology is based on our 2019 paper:
McAneney, J., Sandercock, B., Crompton, R., Mortlock, T., Musulin, R., Pielke Jr, R., & Gissing, A. (2019). Normalised insurance losses from Australian natural disasters: 1966–2017. Environmental Hazards, 18(5), 414-433.
How will extreme events change in the future with climate change in Australia?
The answer is we don’t know.
Andy Pitman, a brave climate scientist at the University of New South Wales and Director of the ARC Centre of Excellence for Climate Extremes, explained last week, after also reading the NCRA report:
[W]e do not know what the future holds for riverine flooding, tropical cyclones, storms, and droughts. Think about that for a moment … we do not have confident projections for these things.
We do know, however, that disaster losses will increase simply due to more people, more property, and more wealth.
The future climate will see many extremes with or without climate change. Those factors alone mean that we know plenty enough to act in the face of an uncertain future.
My post yesterday on problems with climate scenarios in the NCRA went viral, and was featured on the front pages of several Australian national newspapers (in somewhat more colorful language than you’ll find here at THB!).
The Honest Broker is written by climate expert Roger Pielke Jr and is reader-supported. If you value what you have read here, please consider subscribing and supporting the work that goes into it.
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