Today's guest is Kate Cotter, the CEO of the Resilient Building Council. The RBC have been on the front foot for over a decade in seeking to support at risk households and home owners adapt their property so that it is more climate adaptive and able to withstand the threats that bushfires pose. This is no small deal - the loss of lives and properties to fire is a trend here in Australia as well as globally. A warming planet means a burning planet, and the past few years have seen record fires not only here in Australia, but Canada, the USA, Portugal, Chile, Russia, Greece and Algeria to name just a few others. We know we have entered a new climate age, and the clearest sign of that is the seemingly ever present-ness of unprecedented fires somewhere around the world.
The RBC work to support homeowners make practical changes using a robust tool that some insurers are now recognising with reduced premium pricing. So far their work has focussed on fires, but will soon be expanded to cover multiple hazard types - flooding, cyclone and heat. Considering the issues many now face in living in places where access to affordable insurance is increasingly difficult, RBC's work is urgent as we all grapple with what to do about the problems of the impacts we have locked in. We know and see the physical impacts of the climate crisis all the time - record flooding in Brazil, a record tornado season in the USA, a record warm April around the world. Climate change is a record breaking machine.
A new challenge is emerging which was brilliantly outlined by Christopher Flavelle in the New York Times last week in his article - The Possible Collapse of the US Home Insurance System. The progressive and visible impacts of a changing climate are one thing, the other is the progressive and invisible impacts of what financial services organisations are doing in response to managing enterprise risks that climate change is driving. What happens when imperilled homes can't access affordable insurance yet live in places where natural disaster events are not a case of if but when? What happens when banks require insurance to meet the contractual obligations of a mortgage but the home owner can't afford the insurance? What happens when investors undertake their own climate scenario analysis work and decide not to invest in climate adaptation measures and instead divest to other regions or sectors with lower climate peril exposures? How would any of us even know that this is happening? Based on the stories here and overseas of insurers leaving markets and the new phenomenon of 'insurance premium shock', we know something is occurring though.
So the maligned and avoided problem that is climate change may be arriving for many as the grand challenge we always knew it was going to be through standard insurance premium letters. What happens next, and what do we do? Kate has a recipe - not an exciting one but one that makes sense. It's made up of intervening and attempting to reverse the progressive losses and damages that a changing climate is delivering to Australians, its ecosystems and economies through nothing short of an incredible mobilisation of political courage, regulatory and legislative reform, construction innovation, shifts in how financial markets price risk and the way residents think about and value their home as a refuge from the worst the climate could be. This will take nothing short of a cultural, societal and political revolution in how we as a collective think about and act on the climate crisis - this isn't just about building big solar f
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