Australian Government response to the Productivity Commission inquiry into Barriers to Effective Climate Change Adaptation

Department of Climate Change and Energy Efficiency, 2013


Australia’s climate is changing and will continue to so do for the foreseeable future. The unavoidable impacts of climate change will affect life in Australia and, without preventative action, could impose significant economic, social and environmental costs. Governments, businesses and households are vulnerable to projected changes in the frequency and intensity of extreme weather and other events such as intense precipitation, storms, bushfires, heatwaves and floods, as well as to incremental changes in climate such as rising temperatures and sea levels.

The Australian Government therefore welcomes the findings of the Productivity Commission’s detailed inquiry report into barriers to effective climate change adaptation.

In the report’s overview, the Productivity Commission notes that governments, businesses and households can all act to manage the risks associated with climate change, and that some adaptation is already taking place. The Roles and Responsibilities for Climate Change Adaptation in Australia paper agreed by the Select Council on Climate Change (SCCC) on 16 November 2012 states that local initiative and private responsibility will be at the forefront of climate change adaptation in Australia, with the most significant benefits flowing directly to those who plan well and adopt flexible adaptation strategies.

The Productivity Commission found that there are key roles for governments in securing adaptation to climate change, primarily by:

  • managing climate change risks effectively in their own activities
  • ensuring regulatory and policy frameworks do not impede private risk management
  • correcting market failures (for example, by providing information and disaster-mitigation infrastructure) where the benefits to the community exceed the costs
  • managing the distributional consequences of climate change for disadvantaged and vulnerable groups.

The Australian Government agrees with the Productivity Commission on the need to embed consideration of climate change in its own agencies’ risk management practices. Where there is scope to improve risk management practices, the Department of Climate Change and Energy Efficiency (DCCEE) will work with relevant agencies to develop appropriate guidance. DCCEE is currently developing guidance for Australian Government agencies on managing risks to assets in the coastal zone.

The Productivity Commission’s insight into the potential barriers in the uptake of climate change adaptation measures – in particular cognitive barriers beyond information provision and use – may need further development. The Government will consider whether, for example, Australian businesses and households are aware of the risks of climate change; have the decision-making tools to plan for climate change impacts such as extreme weather events in the face of uncertainty; and have the capacity and resources to translate awareness of climate change into action.

More generally, the Government will examine how it can support Australian businesses to take advantage of emerging markets as countries around the world adapt to climate change.

Australia is well placed as a nation to provide adaptation solutions, given we are likely to be significantly affected by climate change. The market has already responded, for example, through improved agricultural and water management practices – areas of expertise in which Australia can offer solutions to the rest of the world, particularly in Asia. Further opportunities exist for Australian businesses in all sectors of the economy to deliver internationally-competitive adaptation solutions, including in sustainable mining, manufacturing, architecture, business and financial services and tourism.

Noting the Productivity Commission’s recommendations to state and territory governments, the Australian Government will also continue to work with those governments to advance adaptation reforms where national action is required, for example, through reforms in relation to land-use planning, building regulation, existing settlements, emergency management and insurance. These reforms will build upon the Government’s National Urban Policy and Council of Australian Government (COAG) City Reforms.

In undertaking the adaptation task, Australia’s three levels of government will together aim to balance local knowledge and expertise against national interest considerations, taking particular account of the benefits of national coordination, existing responsibilities and accountabilities, and the diversity of impacts likely to be experienced across the nation.

Government policy has the potential to facilitate more effective adaptation to climate change and hence better community outcomes. Accordingly, the Australian Government’s response to this challenge must be cohesive and well-targeted. This will not necessarily involve new spending, but does mean demonstrating national leadership and ensuring climate change is taken into account in the design and delivery of a range of policies and programs and in how it manages public assets. It means adopting policy settings that facilitate a flexible and responsive economy, promoting efficient adaptation.

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