Your Development

The scientific evidence is now overwhelming: climate change presents very serious global risks, and it demands an urgent global response (Stern, 2006). In Australia, the climate in the 21st century is virtually certain to be warmer, with changes in extreme events and without further adaptation, potential impacts of climate change are likely to be substantial (IPCC, 2007).

If climate change is taken into account, then the development is more likely to have a long and successful future. As understanding of the importance of climate change issues increases, a climate-proofed development could become a better investment and command a higher price. Long-term running costs, including insurance, will be less and the future asset value higher. Where finance is needed from long-term investors such as pension funds, taking a long-term view at the design stage makes a lot of financial sense.

If not addressed, climate change could mean that the development proves to be too dangerous or uncomfortable to live in, too expensive to run and maintain, and affordable insurance may no longer be available. It could also contribute to or exacerbate problems for neighbouring development(s) and the wider region.

Australia has a wide range of climate regimes, and experiences large annual variations in rainfall with droughts, fires and floods being common. The surrounding oceans play a large part in Australia’s climate, which is strongly influenced by El Nino Southern Oscillation occurrences. Many Australian sectors and systems are highly vulnerable to climate change – including the property sector. Preparing Australia for the unavoidable impacts of climate change is imperative. Australia’s climate is clearly changing and increasing temperatures with associated heat waves, changes in rainfall distribution, and increases in extreme weather events will become more commonplace.

Read more about climate change in other factsheets:
Possible effects on buildings through climate change and
Adaptation to climate change - heat and fire.

 

Sea level rise and coastal erosion

Background: One effect of global warming is sea level rise. The main causes of sea level rise are the thermal expansion of water as it heats up and the contribution from melting of ice caps and glaciers. Mean sea level rise is expected to increase with local and regional variations due to land-sea movements and changes to ocean currents. The anticipated extent of sea level rise is estimated in the range of 18 to 59cm by the end of the century. Shoreline retreat can be as much as 50 - 200 times the vertical sea level rise, depending on coastal geomorphology.

Implications: Climate change is likely to increase coastal erosion, erosion of salt marshes and the risk of landslides due to sea-level rise and storm surges. Developers should not necessarily rely on defences to protect the land in all cases and should consider how the coast will change due to climate change over the development’s lifetime.

Adaptations: When considering the implications of coastal erosion developers and local authorities may adopt a precautionary approach to coastal development and take increased vulnerability of coastal properties into account in modelling of flooding, coastal erosion and sea inundation.

The first line of adaptation should be to avoid high risk areas; i.e. state and local planning codes should be adjusted to reflect potential impacts; however in the absence of those codes, developers can build areas up, ensure drainage and use coast care mechanisms such as planting and other land management measures.

Local authorities are usually in a better position than individual property owners to take preventative action to protect against flooding by using embankments, river straightening and similar measures. Allow for possible sea level rise in new drainage systems, coastal infrastructure, and buffer zones.

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Hail

Background: There is an indication that hail risk may increase over the south-east coast of Australia. Hail events may decrease in Melbourne, but increase in Sydney, which shows that hailstorm scenarios are very location or site dependant. Also, there have been a limited number of studies in this particular area of climate change.

Implications: Hail losses account for 34% of the total Australian economic losses in the 1967-2003 Insurance Disaster Response Organisation database, the largest proportion for any natural peril. Hail damage was involved in 10 of the top 20 insurance losses since 1967. NSW experiences the highest insurance losses due to hail.

Top 20 insured losses from 1967 to 2004. (www.idro.com.au/disaster_list)

Adaptations: Because there is significant building damage and subsequent financial losses experienced in hail events, adaptation options have been included here. Options for reducing the vulnerability of buildings to hail events (and related storms) include:

• ensuring roofing can withstand higher wind speeds and hail impact
• designing more appropriate window protection
• creating greater capacity to detain and harvest water from a deluge
• ensuring roofs are well maintained. 

Larger, multi-storey commercial buildings with typical concrete roof construction are less susceptible to hail impact damage. There is the possibility of glazing damage (depending on the angle of impact from the hail stones). The most vulnerable areas are externally fitted services or signage (e.g. air-conditioning systems on roofs). Adaptation options include the re-siting of these services or the addition of protective coverings. Similar to the advice given for residential buildings, commercial building managers should check for leaks after hail events.

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Coastal and inland flooding

Background: There is greater chance of flooding events in areas where increased rainfall and storms events are likely. Thermal expansion of water as it heats up and the contribution from melting of ice caps and glaciers is causing sea level rise. Mean sea level rise is expected to increase with local and regional variations due to land-sea movements and changes to ocean currents. The anticipated extent of sea level rise is estimated in the range of 18 to 59cm by the end of the century. Shoreline retreat can be as much as 50 - 200 times the vertical sea level rise, depending on coastal geomorphology.

Implications: The choice of location will affect the risk of flooding of all types. The likelihood of flooding will increase over time due to climate change, including rising sea levels, higher average winter rainfall and more intense rainfall events. Areas currently not at significant risk could become so during the lifetime of developments. This needs to be taken into account in the choice of location, as well as the design of the development. The type of development will affect what level of risk is acceptable. For example, an area that might be suitable for a warehouse might not be suitable for a hospital.

Climate change is likely to increase coastal erosion, erosion of salt marshes and the risk of landslides due to sea-level rise and storm surges. Developers should not necessarily rely on defences to protect the land in all cases and should consider how the coast will change due to climate change over the development’s lifetime.

Adaptations: There are a number of options for reducing the risk and impact of flooding. A key strategy to reducing flood problems is one of avoiding siting buildings on river flood plains and low-lying coastal areas in the first place.

Local authorities are usually in a better position than individual property owners to take preventative action to protect against flooding by using embankments, river straightening and similar measures. Allow for possible sea level rise in new drainage systems, coastal infrastructure, and buffer zones. Check with the Local Planning Authority to review any strategic flood risk assessments; undertake an appropriate flood risk assessment and evaluate the flood risk over the design life of the development. Demonstrate that this is acceptable for the proposed use(s) and, at a minimum, that there will be no overall increase in flood risk (likelihood and negative impact).

Increased frequency and severity of extreme rainfall events may cause significant flood damage to road, rail, bridge, airport, port and, especially, tunnel infrastructure. Ports and coastal infrastructure are particularly at risk from storm surges and sea level rise will add to the problem. Although the first line of adaptation should be to avoid high risk areas; i.e. state and local planning codes should be adjusted to reflect potential impacts; in the absence of those codes, developers can build areas up, ensure drainage and use coast care mechanisms such as planting and other land management measures.

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Case Study - Northern Territory’s coastline

The intensity of tropical cyclones is likely to continue to increase due to global warming, but changes in cyclone frequency are uncertain. The combination of sea level rise, stronger wind speeds and more intense rainfall may lead to more significant coastal impacts due to tropical cyclones.

Tropical cyclones, in addition to producing devastating winds and rainfall, also generate adverse oceanic conditions including storm surges and extreme waves. Storm surges can produce severe coastal flooding and bring sea waves further inland, which enables the destructive effects of breaking waves to erode the coastline and damage or destroy infrastructure.

When riverina flooding occurs, storm surges can worsen the upstream flooding by slowing the drainage of rivers and streams. The coastline and islands of the Northern Territory are prone to storm surges due to the relatively shallow coastal waters across northern Australia. For example a storm surge of 6.6 m above normal tide level, occurred at Groot Eylandt in 1923. The storm surge caused by Cyclone Tracy was 1.6 m, although (fortunately) it did not coincide with high tide. A high tide with such a strong cyclone would have been far more disastrous.

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Legal liabilities for large emitters

Over the past two decades, tobacco companies and asbestos makers have paid billions of dollars in liabilities for harming consumers with cigarettes and insulation. Now companies responsible for emitting greenhouse gases may face similarly costly legal bills for contributing to dangerous levels of global warming.

While a direct causal link between emissions and damaging weather events is difficult to establish, there is a potential litigation risk to businesses responsible for the creation of emissions and this type of litigation has already taken place.  In September 2006 the State of California filed a lawsuit against leading U.S. and Japanese auto manufacturers, alleging their vehicles’ emissions have contributed significantly to global warming, harmed the resources, infrastructure and environmental health of California, and cost the state millions of dollars to address current and future effects.

 “Global warming is causing significant harm to California’s environment, economy, agriculture and public health. The impacts are already costing millions of dollars and the price tag is increasing,” said Attorney General Bill Lockyer in a press release from the Office of the Attorney General. “Vehicle emissions are the single most rapidly growing source of the carbon emissions contributing to global warming, yet the federal government and automakers have refused to act. It is time to hold these companies responsible for their contribution to this crisis.”

In the United States, there are currently about a dozen cases involving demands for tighter regulation and claims for damages. Among them is a case currently brought by property owners in Mississippi against oil and coal companies they accuse of playing a role in Hurricane Katrina, which struck the region with devastating consequences in August 2005.

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Key Issues

Benefits

Developers and those who invest in new development should consider the financial implications of climate change as a key component of the business case for building, and investing in, a development.

Early site selection benefits may be realised by avoiding, for example, low-lying coastal areas, even before local authorities policies reflect climate change risks.

Corporate responses to climate change may alter brand values and perceptions among customers, staff, suppliers and shareholders. Climate change presents a number of opportunities, as well as risks, to a developer and the wider organisation. The benefits of addressing climate change can be categorised as:

Better risk management:

• Reduce risks and liabilities through pro-active risk management by bringing planning for climate change into the mainstream of operations.
• Demonstration of due diligence of climate change related risks such as property damage, and the health and safety of the community.

Financial:

• Higher future asset values due to lower long term running costs from insurance, repairs, maintenance, and heating and cooling costs.
• Good financial sense for long term investors taking a long-term view at the design stage, especially to those considering corporate social responsibility (CSR).

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Risks

In general there are two types of risks associated with anticipating and adaptation to climate change: the risk of increased exposure and vulnerability to the impacts and consequences of climate change and the financial risk of over-spending or making unnecessary or cost inefficient adaptations; the risk of investing in the wrong kind of adaptation measures; and last but not least, the risk of investing with a false sense of security, in the face of large uncertainties.

The most attractive adaptation actions are those that, regardless of what changes are occurring to Australia’s climate, will provide a net benefit. Some degree of benefit or co-benefits irrespective of the scale of climate change, will help lessen the difficulties associated with scientific uncertainty.

The main risk categories are:

Operational/financial:

• Failure to adapt may result in developments too expensive to run, too uncomfortable to live or work in, and even uninsurable later in its life.
• Investors with climate vulnerable assets may start to offload vulnerable assets and invest in climate proofed assets instead.

Consumer expectations:

• That there will be an expectation among buyers and tenants that developments designed and built now will withstand the impacts of climate change within the lifetime of the development.

Legislation:

• Human induced climate change can no longer be considered speculative and the need for due diligence can not be excluded simply because a risk for harm is uncertain or lies in the future.
• By failing to take voluntary measures now (that anticipate future requirements), there is a risk that more expensive remedial measures may need to be taken at a later date to ensure compliance as legislation comes into force.

Funding:

• Public subsidy may not be available to developers that have not incorporated climate change into the location and design of their development, or investing bodies may not want to invest in non-climate proofed developments.

Reputation risks:

• Failure to address climate change threatens the sustainability of a building, development and/or land by, for example, flooding that make the building undesirable;
• If property insurance cannot be provided in areas of increasing risk e.g. due to high subsidence risk and/or flood risk.

Increased weather risks:

• Increased insurance premiums could add to running costs, affecting the value of the development;
• Secondary damage inside buildings due to events happening outside of the building (e.g. damp carpet, mould, broken ornaments).

Delaying action:

• Flooding on site is expected to become more common adding cost to construction.

Loss of productivity:

• Climate change may threaten working conditions and travel arrangements for staff.

Supply chain

• No company operates in isolation. Most of the risks above will relate to a greater or lesser degree to a businesses’ supply chain;
• Added carbon charges would increase energy costs for raw materials and manufacturing processes, and impose additional costs on steel, aluminium, and cement manufacturing. Timber would probably have the lowest price increase, more for cement, much more for steel and even more for aluminium.

The magnitude and applicability of the above risks for your development will depend on a number of factors such as geographic location, type of development, and funding and ownership structure.

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Savings

The expected savings from a climate change prepared development will depend on the specific location and regional conditions, but in general they are:

• Avoided investment failures by moving away from high-risk sites;
• Lower insurance premiums as the development can demonstrate lower risks towards adverse changes in the climate such as increases in extreme weather events, floods and coastal erosion;
• Lower life cycle costs from avoided needs to repair as well as avoided compliance costs for retrofits and reinforcements demanded by adapted regulations or tenant demands;
• A climate change adapted development have reduced or avoided the risk of disruptions of utilities, communications or other infrastructure, which in turn will increase overall productivity compared to non-adapted developments.

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Costs

Two main drivers for adapting to climate changes are reduced risk and lower life cycle cost (LCC) from avoided repairs, maintenance and retrofits, and reduced operational energy and water costs. However in order to achieve reduced LCC there may be added costs in time and money in the planning, design and construction phases in order to identify, assess and reduce climate change risks.

Examples of added initial costs may include:

• Investments in time and fees for investigating the need for and options to strengthen and reinforce foundations and riverbanks, or add impact-resistant roofing materials to withstand extreme weather events.
• Measures to strengthening and reinforcing foundations and river banks;
• Barriers to reduce wave energy to protect from coastal erosion;
• Green roofs to insulate against heat gains, absorb rainfall and reduce stormwater runoff from flash floods;

Future costs may include loss of property as the asset value and rents for developments with increased exposure or vulnerability towards extreme weather events, flooding, sea level rise, energy costs or water availability.

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Barriers

The magnitude of global warming, and ultimately the regional impacts in Australia, will depend on the combined development of the global population, economy and individual lifestyle choices etc. over the next decades. Although the current ambition of many countries is to limit warming to 2°C this will require urgent, significant and sustained international cooperation and action for which there currently are no guarantees or agreements. This uncertainty underpins many barriers to adaptation such as:

• The precision of local climate change impact projections over the lifetime of a development
• The general awareness of the large scale impacts of climate change has increased dramatically over the last years. In many cases local governments have published climate change impact assessments and adaptation plans;
• Lack of regulatory drivers guiding and mandating adaptation;
• Lack of urgency and priority to address long term climate change impacts;
• Financiers’ ability to get return on investments in climate change adaptation returns which are realised over the lifetime of the development.

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Benchmarks

There are no widely applied tools or benchmarks to quantify adaptation to climate change in Australia. For the New Zealand context the Climate Change Sustainability Index is available for rating residential or office building development with regards to vulnerability towards climate change in the categories: flooding, extra-tropical cyclones, overheating and greenhouse gas emissions (assuming escalating energy prices and carbon charges will increasingly be factors).

The federal government have developed climate change adaptation and risk management guidelines such as the Australian Greenhouse Office’s ‘Climate Change Adaptations for the Local Government’ addressing six local functions: infrastructure and property services, provision of recreational facilities, health services, planning and development approvals, natural resource management and water and sewage services.

The ‘Climate Change Impacts and Risk Assessment – A Guide for Business and Government’ is a guide to integrate climate change impacts into risk management and other strategic planning activities for both the public and private sector. Many local governments have developed strategic and/or adaptation plans for climate change.

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Development phase actions

Feasibility

Climate change may affect the feasibility of a development with regards to:

• Safety and sustainability:
  • How will the location be affected by sea level rise, flooding, cyclones and increase in pest and diseases? Is this an inappropriate location of urban expansion? Is this area vulnerable to climate change impacts and risk of future liability?
  • For example, a flood risk assessment should be undertaken to demonstrate that flood risk can be maintained below an acceptable level for the lifetime of the development.
• Economic sustainability:
  • How will the local community, industry or business be affected by climate change? Is the development dependent on tourists visiting the nearby beach?
  • Does a significant portion of the local community living on a flood plain?
• Regulatory changes:
  • How will the development be affected by changes to building regulations and land use zoning?
  • How would increased need for disaster management and response resources affect the development?
• Infrastructure resilience:
  • Is the development dependent on infrastructure or utilities that may be vulnerable to or even retired due to climate change?
  • Is the development reliant on people travelling long distances? How will rising energy and fuel prices impact the economic viability of the development?

Contact local governments for local climate change impact assessments and the risk assessment and adaptation guides introduced under “Benchmarks”.

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Planning

Planning for climate change includes accommodating for and adaptation to:

• Extreme weather events:
  • Direct impacts from extreme weather events, including increased risk of flood, hail, cyclones and sea level rise;
• Stormwater/drainage:
  • More intense rainfall will result in more inflow into drainage networks with infrastructure capacity exceeded;
  • Breaching of existing flood defences;
  • Drainage capacity exceeded due to sea level rise and storm surge; and
  • Changes in mean and peak stream and river flows.
• Road/pavement construction and maintenance
  • Increased deterioration rates in wetter areas and potential slower rates in areas where rainfall is expected to decrease;
  • Increase in road subsidence and surface damage;
  • Increase in maintenance and repair costs; and
  • Changes in frequency of interruption of road traffic from extreme weather events.
• Coastal assets and infrastructure
  • Increased coastal erosion and loss of coastal public open space.
  • Permanent or increased frequency of inundation of coastal infrastructure and utilities.
  • Damage and disturbance to coastal assets (e.g. marinas and jetties).
  • Breaches and increased erosion of seawalls and damage to other coastal defences.
• Impact on neighbours
  • Any development in an area will affect the ability of other developments, existing or future, to adapt to climate change. Issues include: increased surface water run-off; changes to the flood or groundwater regimes; provision of wind protection, ventilation and shade; fragmentation and vulnerability of habitats; and increased land instability.

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Design

Actions required during the design phase are highly dependent and driven by the risks and opportunities identified in the feasibility and planning phase. Likely design issues include:

• Site layout: Ensure the overall layout and massing of the development:
  • Does not increase the flood risk and where possible reduce risk;
  • Maximise natural vegetation;
  • Take account of the increased risk of subsidence;
  • Provide homes and other appropriate uses with outdoor space wherever possible
• Connectivity
  • Ensure there are safe access routes above the likely flood levels and routes are clearly marked during the design life of the development; and
  • Negotiate with utilities and others over the resilience of services and infrastructure to the development.

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Lot Creation

• New housing estates should be based on sound geotechnical advice assuming this increase in water loading.
• Large cuts into unstable soils should be avoided.
• Providing adequate drainage and soil cover near critical and potentially unstable sites is recommended.

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Completion

• Verify that climate change risk mitigation has been properly implemented.
• In order to capitalise on the many benefits from a climate change adapted development it may be prudent market, communicate and learn from the measures and strategies devised.
• Capture learning from implemented climate change adaptations.

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AGO, 2007, Climate Change Adaptation Actions for Local Government.

AGO, 2006, Climate Change Impacts & Risk Management - A Guide for Business and Government.

Bengtsson, J., Hargreaves, R. and Page I, 2007, An Assessment of the Need to Adapt Buildings in New Zealand to the Impacts of Climate Change, BRANZ Study Report 179. BRANZ Ltd, Judgeford, New Zealand.

BRANZ Ltd, 2007, An Assessment of the need to adapt buildings for the Unavoidable Consequences of Climate Change, Department of the Environment and Water Resources, Australian Greenhouse Office.

CSIRO, 2007, Climate Change in Australia.

CSIRO, Maunsell Australia Pty Ltd and Phillips Fox, 2007, Climate Change and Infrastructure Planning Ahead, Prepared for Victorian Government.

Energy Efficient Strategies, 2006, 'Status of Air Conditioners in Australia' – Updated with 2005 data, for the National Appliance and Equipment Energy Efficiency Committee.

K Hennessy, C Page, K McInnes, K Walsh ,B Pittock, J Bathols and R Suppiah, 2004, Climate Change in the Northern Territory, Consultancy report for the Northern Territory Department of Infrastructure, Planning and Environment

Hennessy K,  Lucas C, Nicholls N, Bathols J, Suppiah R and Ricketts J, 2005, Climate change impacts on fire-weather in south-east Australia, CSIRO.

IPCC, 2007, Technical Summary. 'Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panle of Climate Change', M.L. Parry, O.F. Canziani, J.P. Palutikof, P.J. van der Linden and C.E. Hansen, Eds., Cambridge University Press, Cambridge, UK, 7-22.

London Climate Change Partnership, 2005, Adapting to climate change: a checklist for development Guidance on designing developments in a changing climate, Greater London Authority, ISBN 1 85261 795 0.

Steeds J and Danielsen P, 2007, Emerging Issues in Environmental Due Diligence – Managing Carbon, Energy and Social Risks, Global Legal Group, in association with Freshfields Bruckhaus Deringer.

Stern, N, 2006, Stern Review: The Economics of Climate Change, HM Treasury, London, UK.