Infrastructure Australia says natural disasters could cost our nation $39 billion a year by 2050. “We need a new way of thinking about resilience,” says chief executive of Australia’s independent infrastructure advisor, Romilly Madew.
A Pathway to Infrastructure Resilience, a new duo of advisory papers prepared by Infrastructure Australia and Infrastructure NSW, estimates the annual economic cost of natural disasters will more than double – from around $18 billion a year to more than $39 billion annually by 2050.
“As the frequency and the severity of shocks and stresses increase, so too will the costs. How will the property industry cope? Let’s take this seriously by embedding resilience into our planning up front,” Madew says.
Property Council chief executive, Ken Morrison, says Infrastructure Australia’s proposed systemic approach to resilience “would represent a welcome evolution of the ad hoc strategies often employed in futureproofing our infrastructure” and the property industry “stands ready to contribute”.
Infrastructure and property are intrinsically linked, Madew notes. “A disruption to infrastructure services – whether it’s a power outage or a public transport issue – immediately impacts property. This is why the industry needs to start thinking differently about infrastructure resilience.”
Madew spells out the complexity of the resilience challenge as infrastructure networks become more interconnected. She points to the Black Summer Bushfires as an illustration. After fires damaged the energy grid in January 2020, 1,400-plus telecommunications towers failed. Phones went down, and with them ATMs and EFTPOS machines. Petrol stations could only accept cash, leaving many people in bushfire zones unable to flee.
The COVID-19 crisis has exposed other fault lines, Madew adds. “We had to pivot incredibly quickly to working from home and we weren’t prepared.” While businesses continued to operate, cyber-threats have intensified and our cities’ economic powerhouses, our CBDs, have suffered, she notes.
The latest report from the Intergovernmental Panel on Climate Change warned that rising temperatures will bring widespread devastation and extreme weather within a decade. “We are already seeing extreme weather events that no one could have predicted.”
Wildfires raging across Europe and North America, record-breaking snowfall in Madrid that caused €1.4bn in damage, winter storms in Texas that left 3.5 million businesses and homes powerless are just three examples this year. “Who would have thought a 10-year-old metro station would flood and kill people?” she asks, referring to the recent flash flood in China’s Zhengzhou, which engulfed a low-lying section of the city’s metro and claimed 14 lives.
“A failure of infrastructure has a cascading effect, and it impacts property at all levels.”
With such mountainous challenges to climb, Infrastructure Australia has identified 10 steps towards “transformational and systemic change” in infrastructure planning, as well as short-term actions for asset owners and operators.
The 10 steps range from better scenario planning to data collection. “Evidence-based decision-making requires data. Everyone knows this but we will continue to call it out because Australia does not have standard data sets. Our data doesn’t talk to each other.”
Another step towards resilience is to take a “place-based approach” which considers the connections between assets, their context and the communities they serve. Each place in Australia is unique, and what works in Brisbane won’t necessarily deliver resilient infrastructure in Broome or Ballarat. “Place-based planning should be part of everyone’s narrative,” Madew advises.
“Rather than looking at individual assets we must understand their contribution to the resilience of the system.” This means thinking more thoughtfully about how each piece of infrastructure – whether a bridge or a building – strengthens not only the network, but the place, precinct, city and region that the infrastructure operates within.
Resilience must also be valued and embedded into infrastructure decision making from the earliest planning phase of projects. “We can’t add this in as an afterthought. Resilience must be right up front in our thinking. It is costly and complex if we consider resilience later.”
Deloitte Access Economics’ report for the Australian Business Roundtable finds that investment in disaster resilience yields a double dividend: in the avoided impacts of disasters and in the broader co-benefits that arise in the absence of a disaster. The co-benefits of infrastructure investments, for example, may include employment opportunities, improved service reliability, greater business confidence and incentives for innovation.
The property industry already knows how to embed systems-thinking into its design and delivery, Madew says. “We started embracing systems thinking with Green Star. Now we need to start thinking about resilience in the same way.
“Look at the capabilities you’ll need to deliver these 10 steps in your organisation and if you don’t have those capabilities then go out and get them,” Madew adds.
“Right now, we are more vulnerable to shocks and stresses than ever before. But we also have the highest spend on infrastructure in our nation’s history. The obstacles may be big, but the opportunities are enormous.”
The Property Council’s Morrison agrees. The last 20 months have demonstrated why Australia must shockproof its services and facilities for the economy to function. “Whether it is natural disasters, pandemics or threats initiated by people, Australia needs to expect the unexpected and have strategies in place that appropriately manage risk”.