Australia: Nat CAT forecast to exceed $800bn over the next 40 years
Source: Asia Insurance Review | Nov 2021
Even under a low emissions scenario - whereby timely action will see emissions start to fall and reach zero by 2100 - the costs of natural disasters will rise to at least A$73bn ($53bn) annually by 2060, or 4% of Australia’s GDP in 2020.
The figure is nearly twice the A$38bn per year on average estimated for today, representing approximately 2% of Australia’s GDP in 2020. If a low emission scenario is achieved, the cumulative cost of natural disasters is forecast to be A$1.2tn ($873bn) over the next 40 years.
A high emissions scenario – where emissions continue to rise across the 21st century, reaching 30 Celsius above pre-industrial levels just after 2060 – sees a significant increase in costs over time.
In 2020, the annual average costs of natural disasters were only 0.02% larger than the low emissions scenario. By 2060, costs would reach A$94bn, representing a 29% increase relative to the low emissions scenario.
Costs in Melbourne and Brisbane will also increase significantly, as major rivers in these cities alongside growing populations will lead to greater costs associated with flooding for Melbourne and tropical cyclones and floods for Brisbane. A