Modelling climate impacts – Greg Reid
The Australian climate is already one of the most variable in the world. Our farmers are skilled and resourceful in adapting to this variability but there are economic tipping points not included in the modelling of climate change. The Reserve Bank is no doubt heartened by recent inflation in food prices but this is not an indicator of demand growth but an indicator of production loss, a loss that may never be fully recovered. Our farmers use adaptation strategies such as property planning, feed reserves, opportunity cropping, rainfall catchment, efficiency etc. Such measures assist in coping with changes in the AVERAGE conditions, however when drought, heat waves and fires strike across massive areas there are additional scale effects.
There is no way to adapt to unstoppable fires that destroy all in their path. Shortages in fence posts, machinery, shed materials and labour, all increase rebuilding costs. National losses in live- stock from both the drought and fires will restrict restocking. Heavy losses in the bee industry will reduce crop pollination while loss of bird life will encourage pest insects. The complete loss of vegetation cover will cause erosion and fertility impacts that can take decades to recover.
As these catastrophic impacts become more frequent, the time that is available for recovery shortens. Debt is not fully repaid and income not fully restored.
Increasingly, farmers will seek an exit because of the financial or psychological drain. Corporates may take up some of the larger holdings and better land but they are unlikely to acquire marginal farms in an increasingly high risk climate.
The tourist industry will also suffer scale effects. People once evacuated from their annual holiday are unlikely to return when ANY fires are burning. The international headlines are also likely to reduce overseas tourism even in areas that were not affected by fire. Not only will businesses have to cope with the immediate loss of income but visitor
numbers may take several years to recover. Hopefully no large fires recur to reinforce tourist impressions though in a warming climate this will be likely.
When modelling climate impacts, aver- ages always underestimate consequences. The scale and frequency of extremes will be the real determinant of whether enterprises actually recover. In addition, there are critical thresholds.
For example, this year more bee hives were lost to heat stress than to bush- fires. Wheat becomes infertile at temperatures over 36 degrees, restricting when and where it can be planted in a warming climate.
Economic impacts from climate change will not have a smooth relationship to the average increase in global temper- ature. Instead it should be expected that there will be sharp contractions associated with the increasing frequ- ency and scale of extremes. Rising prices for essential commodities like food may entice farmers to take more risks but that does not mean they will successfully produce more. New technology may help in poorer than average seasons but as we have seen it is powerless in the face of extremes on a continental scale.
Greg Reid is an ERA member, and in the past served seven years as an advisory officer on climate change adaptation with the NSW Dept of Agriculture.