In the last few years, a number of organisations have argued for a substantial increase in investment in measures to mitigate against the risks and consequences of natural disasters. These include the Productivity Commission Inquiry into Natural Disaster Funding Arrangements, the Red Cross World Disaster Report and now the Insurance Australia Group.
These proponents argue that investing more in mitigation will reduce, in the long-term, the level of funding required for disaster recovery. While there is evidence to suggest that increased investment in mitigation would be beneficial, little substantial action appears to be occurring, meanwhile the costs of disasters is growing. The Climate Council predicts that the costs of bushfire alone to rise to $800 million per year by 2050.
There may be a few reasons why investment in mitigation is relatively low:
- Funding relief and recovery has direct and immediate benefits that are easily identifiable.
- The return on investment for mitigation actions is not usually immediate or certain.
- The benefits of some mitigation measures can be difficult to measure.
There are however a number of actions that policy makers can undertake to drive a more optimal balance between mitigation and recovery investment.
Information and data – Without good information on hazards and risks it is very difficult to make informed decisions or determine the benefits provided by mitigation investment.
A risk assessment framework – A risk assessment framework will help governments adopt a more strategic approach to disaster management and is an integral tool for identifying priorities.
A cost-benefit framework – Having a standard assessment framework for articulating the costs and benefits of mitigation options is an important decision making and communication tool.
Clear roles and responsibilities – All levels of government, business and individuals have a role in mitigating against natural disasters. Currently, the roles of different levels of government are unclear. This leads to:
- A lack of accountability for funding and investment in disaster mitigation which in turn can result in inaction.
- Uncertainty for business and the community as to their role in disaster mitigation.
Bushfires cost an estimated $375 million per year in Australia. With a forecast growth in costs of 2.2% annually between 2016 and 2050, the total economic cost of bushfires is expected to reach $800 million annually by mid-century.