4 April 2018
Last week 35 early career climate change researchers, engineers, actuaries, modellers, engineers and policy advisors gathered in Sydney at the third of the Hub’s young professional forum events. These hypothetical-style events challenge participants to consider climate risks
New Derby: the jewel in Northern Australia’s crown
Participants in this event were transported to 2025 to the fictitious town of New Derby on the north-west Western Australian coast. This bustling regional administration and export hub is home to more than 100,000 people. There are significant developments planned here, including:
- Expanding Derby Airport
- A 400-bed hospital
- New domestic accommodation (5000+ houses/units)
- A pier and loading facility for Panamax ships (65,000 ton) with a rail terminal
However, currently planning does not take future climate risks into account and building codes and design standards are based on historical data.
It’s a tough environment up here. The region is prone to tropical cyclones (fewer than in the past, but more intense when they do occur), king tides and storm surges, and temperatures here, like the rest of the country, are warmer than they were in 2000. In fact, back in 2018 when the development of New Derby was kicking off, the Australian insurance industry told the Federal and Western Australian Governments that as plans currently stood, New Derby and all its infrastructure would be uninsurable.
Insuring the ‘uninsurable’
With guidance from ESCC Hub Stakeholder Advisory Group chair Nick Wood and Actuaries Institute Climate Change Working Group Convenor Sharanjit Paddam, the young professionals were challenged to think about how to determine the climate-related risks for this hypothetical development and whether cover under current insurance products would be available and affordable to property and infrastructure owners there in 20 years’ time.
Other considerations included:
- What resilience/adaptation options could be considered, and how would they impact cost and time?
- What types of insurance coverage would the builder/owner need, both for construction and ongoing operation?
- What are the implications for current insurance models of the future projected climate for New Derby?
- How suitable are current insurance products?
- Can current products be adapted to improve viability?
- What kind of physical resilience structures may be needed to improve the ‘insurability’?
- How can the new measures be implemented?
Participants demonstrated a great deal of insight, innovation and creativity as they worked through the exercise, with Sharanjit Paddam noting, ‘The answers provided clearly reflected deep engagement between the scientists and the actuaries to bring their respective skill sets to resolving the problem.’
While the activity was about managing climate risk in a hypothetical scenario, the experience of working through the challenge had very real and positive benefits.
Before participating in the event, Lisa Ye thought that climate change was something very complex, and that there was not much she could do about it. After working through the scenarios with the climate change researchers and other young professionals, she has a more positive outlook. “I still think climate change is very complex”, she says, “however it no longer feels like it is a problem I can’t tackle – we can make relevant input into how communities deal with climate change.”
Andrew Xu appreciated how the event made him consider climate change from a new perspective. “It made me think more about quantifying the impact of climate change rather than thinking of it in qualitative terms,” he said.
For Bei Zhu, the opportunity to work with a multi-disciplinary group was a highlight. “The most valuable thing about the event was to exchange knowledge with professionals with different technical backgrounds and jointly tackle the problem from different perspectives.”
As the climate change information providers and users of the future, the participants in this event also had the opportunity to start establishing networks that will become increasingly important in the future.
“That’s the real aim of these events,” explains facilitator Nick Wood. “To raise awareness of the climate change information that is available and how it can be used, and to establish networks and relationships that will help this information be used to its best advantage.”
Read about the workshop from the perspective of one of the young actuaries in this article from Actuaries Digital.