Appendix 3

Appendix 3

Recommendations from Productivity Commission Inquiry Report on Barriers to Effective Climate Change Adaptation

Productivity Commission Inquiry Report No. 59, 19 September 2012[1]

Assessing reform options and identifying priority reforms


Reforms to address barriers to effective climate change adaptation should be assessed on a case-by-case basis to determine whether they are likely to deliver net benefits to the community. This should include consideration of any risks to their implementation.

If there is a high degree of confidence that reforms will deliver net benefits, they should be implemented without delay.

If there is uncertainty about the net benefits of reform options, there could be a case for delaying implementation or adopting a flexible approach until decision makers have better information on the factors that affect their decisions, particularly if the up-front costs are large and the benefits are likely to be distant.


'No regrets' policies


Australian governments should implement policies that help the community deal with the current climate by improving the flexibility of the economy. This would also build adaptive capacity to deal with future climate change. This includes reforms to:


Information provision


The Australian Government initiative to improve the coordination and dissemination of flood-risk information should proceed in the most cost-effective way, be regularly updated and be expanded over time to encompass other natural hazards. Guidelines to improve the quality and consistency of risk information should also be regularly updated and take climate change into account where feasible.


Local government


To help clarify roles and responsibilities of local government for climate change adaptation, the state and Northern Territory governments should publish and maintain a comprehensive list of laws that delegate regulatory roles to local governments. This would assist both state and local governments to assess whether local governments have the capacity to discharge their roles effectively.


Local governments’ uncertainty about their legal liability is a barrier to effective climate change adaptation. State governments should clarify the legal liability of councils with respect to climate change adaptation matters and the processes required to manage that liability.


Land-use planning


As a priority, state and territory governments should ensure that land-use planning systems are sufficiently flexible to enable a risk management approach to incorporating climate change risks into planning decisions at the state, territory, regional and local government levels. Consideration should be given to:

State and territory governments should provide appropriate guidance to local governments to implement these provisions in local government schemes.


Building regulation


The Council of Australian Governments’ Building Ministers’ Forum should provide formal direction to the Australian Building Codes Board to:

This body of work should be transparently and formally incorporated in the Australian Building Codes Board’s annual work program.


Existing settlements


The Council of Australian Governments should commission an independent public inquiry to develop an appropriate response to managing the risks of climate change to existing settlements. The inquiry should:

State and territory governments should draw on the findings of the inquiry to:


Emergency management


The Australian Government should commission an independent public review of disaster prevention and recovery arrangements. This should be broader than the review currently being conducted by the Attorney-General’s Department. The review should cover the Natural Disaster Relief and Recovery Arrangements, as well as the funding mechanisms for disaster mitigation, including the National Partnership Agreement on Natural Disaster Resilience. This review should:


The role of insurance


State and territory taxes and levies on general insurance constitute a barrier to effective adaptation to climate change. State and territory governments should phase out these taxes and replace them with less distortionary taxes.


The Australian Government should only proceed with reforms that require all household insurers to offer flood cover if it can be demonstrated that the benefits to the wider community would exceed the costs.


Governments should not subsidise household or business property insurance, whether directly or by underwriting risks.

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