About the Submission
The Draft Report of the Productivity Commission’s inquiry into regulatory and policy barriers to effective climate change adaptation raises some important considerations for government and the community. The Department of Climate Change and Energy Efficiency (DCCEE) supports many elements of the approach set out in the Commission’s Draft Report, including building on our capacity to manage current climate variability and the use of flexible approaches to manage future climate risks.
This submission sets out four broad areas where we consider the Draft Report could benefit from further analysis and consideration. These are (a) in the assessment of climate uncertainty and its implications for decision-making; (b) the Commission’s assessment of how much adaptation is already taking place and the quality of that adaptation; (c) the Commission’s interpretation of ‘real options’ analysis in the report; and (d) the consequences of the foregoing for the Commission’s conclusion on the appropriate role of government in adaptation. The points we make below build on the framing and analysis of our original submission to the Commission, and should be read in that context.
The Draft Report could be improved by a more rigorous analysis of climate uncertainty. For climate impacts such as temperature and sea level rise, the likely trends and timeframes in which they will occur are well understood. There is certainly sufficient evidence now available on which to make certain long-term adaptation decisions, for example on the robustness and location of public infrastructure.
Unavoidable climate change impacts are a significant risk to Australia’s wellbeing. The Draft Report would benefit from an analysis of the nature, scope and magnitude of these risks. Effective adaptation may be thought of as the set of measures that is most likely to manage risks to Australia’s wellbeing from climate change impacts. The report does not systematically assess what this set of measures might look like. Instead, the draft report assesses the individual merits of various proposed adaptation measures in the absence of an overall framework.
DCCEE is concerned by the Commission’s conclusion that there are few systemic barriers to climate change adaptation. This does not match DCCEE’s experience or the evidence of surveys which have been conducted on current adaptation activity (these are outlined in this submission). In fact, the relatively low awareness about climate vulnerability and low take-up of adaptation action suggests that information and other barriers are still prevalent.
The draft report correctly emphasises the need for a flexible approach to decisions under uncertainty. DCCEE agrees that ‘real options’ analysis is a useful method for identifying the benefits of flexible adaptation strategies and that the most beneficial strategies may often involve delaying action. However, the draft report often seems to assume rather than demonstrate that delaying action is an optimal strategy. There is emerging evidence that in some cases early action may be more beneficial than delaying action. Finding the best adaptation strategy will require rigorous analysis on a case-by-case basis.