The National Climate Risk Assessment should motivate, not intimidate

You will have likely seen the headlines generated by the release of Australia’s first National Climate Risk Assessment – visions of a Mad Max world, transformed coastlines and species forced to move and adapt or become extinct.

What should encourage us is that in many cases (particularly in metropolitan areas) Australia’s capacity to adapt is high and we have the resources to assist where capacity to adapt is low (particularly in remote communities). We are considerably better placed than some of the most densely populated parts of the world where the impacts of climate change will be most extreme and the ability to adapt the most limited.

Ricardo regularly works with clients and communities who know they need to build their resilience and adapt, but don’t know where to start or have become stuck along the way. The information base is nearly as overwhelming as the risks, and it is difficult to understand how guidelines, standards, tools, portals and models relate to the tactical decisions that organisations make every day. Often, the response is to seek more information. Commission more research. Build a new model. Write a new report. Meanwhile discussions and decisions about actions continue to be kicked down the track.

Our advice is not to let uncertainty, incomplete information or a perceived lack of internal capability hold you back — keep moving. Many small steps tend to add up faster than trying to tackle one big step that feels perpetually beyond reach.

Have real world conversations in your organisation about the manner in which climate already impacts your objectives as plainly as possible. Write them down. Once you can articulate those relationships, understanding how your climate risk may change in a world that is hotter, with more frequent severe weather and (depending on where you are) possible changes to rainfall patterns, becomes much easier.

What the National Climate Risk Assessment means for the sectors we work in

We work across a range of sectors, from water, environment, agriculture and mining. Many will face similar hazards — hotter conditions, warmer oceans, more frequent severe weather and fires, shifts in rainfall, and more variable water supplies but the way these hazards drive risks, how organisations approach them, and what actions they take will differ depending on a range of matters, including:

• How climate risks rank against, and relate to, other risks to the organisation's objectives,
• Expectations of regulators, stakeholders and investors, and
• Available capital and the urgency associated with each risk.

Effective climate risk management is not about prescribing one-size-fits-all actions, and more about helping organisations to frame their risks, identify their options, choose pathways that suit their situation, secure investment and deliver them successfully as part of their business.  And doing this while operating in scenarios where history is no longer a reliable guide.

From risk to action

No one will know how climate changes may affect the achievement of your organisation’s objectives better than you. Consulting firms like Ricardo can facilitate processes to help you define those risks, and source quality information and methods to quantify current and plausible future risk.

We know it can be difficult to navigate complex data and deep uncertainty. The key is to use that information in a way that builds understanding and ownership, so you get buy-in and can arrive at actions that are right for your organisation. This approach helps avoid reports that sit on a shelf or processes that never move beyond risk assessment, and instead supports decisions that lead to meaningful and proportional transition and adaptation.

Applying Climate Risk to Water Policy and Management  The Water Security Technical Report published with the National Climate Risk Assessment noted that while there are nationally significant risks to water security, each water system comes with its own characteristics that contribute to its security. Climate risks need to be considered in an integrated manner with the other major risks to water security in Australia, including ageing infrastructure, insufficient revenue base, workforce challenges and bill affordability. The report also highlighted that the impacts of climate change will play out very differently across different parts of the country. While all of Australia will continue to get hotter, which generally increases demand for water while reducing supply, there is considerably more diversity and uncertainty in possible changes to rainfall. This uncertainty will not be resolved through more modelling and water managers will need to develop plans for what could happen, rather than investing the bulk of time and resources trying to predict what will happen. For most of Australia, the biggest risks will not come from the overall change in average annual rainfall (see Figure 5 from the report below), rather from changes to rainfall variability, changes to rainfall-runoff relationships, changing demand and the frequency of extended droughts and extreme floods.   Effective adaptation for water policy and management often involves developing plans to respond to certain risks, but sometimes deferring implementation and/or investment until particular triggers are met signalling that action is now necessary. This is because some adaptations are very costly. In the case of water resource management in regional areas, we know we might need to put aside more water to secure town water supplies or to maintain key environmental assets, but we don’t want to take water away from economic, social or cultural uses in times when water is plentiful. And we know that even in a drying climate we are likely to have wet years and possibly wet decades. Apportioning water through extraction limits based on long-term averages may be increasingly limited in managing extreme events. Instead, we might need more sophisticated arrangements that see water sharing adapt more dynamically in response to climate triggers.    Similarly, adaptive policy and management will only work alongside adaptive governance arrangements. Good governance is critical in this context, enabling fair, transparent, and timely decision-making that supports flexible water allocation and effective responses to both scarcity and excess. This is becoming ever more critical as diverse and often competing interests intensify the demand for limited water resources.

At Ricardo, we are passionate about supporting organisations large and small, public and private, to progress practical adaptations that reflect individual circumstances, values and resources. Our aim is to leave your team with a greater understanding of the climate risks to their work; the ability to engage with fit-for-purpose data, tools and methods in-house; and the confidence to create compelling, practical business cases for change.

If you would like to chat about what this might look like in your organisation (or offer alternative views to those expressed in this article), please get in touch with our Associate Director, Matthew Coulton, or complete the form at the bottom of the page and we will get back to you promptly.