Smart futureS: VCCCar regional BuSineSS BreakfaSt roundtaBle Context PaPer

Smart futureS: VCCCar regional BuSineSS BreakfaSt roundtaBle Context PaPerCeleste Young and RogeR Jones

Smart Futures: VCCCAR Regional Business Breakfast Roundtable Context Paper Page �

This context paper was prepared for the VCCCAR Annual Forum Regional Business Breakfast – Smart Futures – held on May 13, 2013 in Geelong, Australia. This paper also contributes to the National Climate Change Adaptation Research Facility Project SD11 12 Valuing Adaptation Under Rapid Change.

Recommended citation: Young, C. K. and Jones, R. N. (2013). Smart Futures Regional Business Breakfast Roundtable Context Paper. Victorian Centre for Climate Change Adaptation Research, Melbourne.

Disclaimer: The views expressed herein are not necessarily the views of the State of Victoria, and the State of Victoria does not accept responsibility for any information or advice contained within.

© 2013. Victorian Centre for Climate Change Adaptation Research.


key points l Businesses across regional Victoria are being impacted by climate change, in particular by extreme events.

l It is important to understand the new challenges and opportunities arising from a changing climate.

l It is important to understand the capacities that regional businesses currently have and what further resources they may need to maintain business continuity and to thrive.

l Understanding what resilience is, and how it can be developed in businesses, business groups and local organisations, is pivotal to ensuring sustainable regional communities.

introductionTo date, adaptation has mainly focused on developing policy and adaptation plans within government and the community. The private sector has been less engaged, even though businesses, especially in regional areas, are key community stakeholders and their activities underpin regional economies. Regional businesses have a pivotal role in building the resilience to change needed to ensure future prosperity.

However, recent climate events have shown that many businesses across Victoria are vulnerable to climate impacts. This has highlighted the need for businesses to understand how these impacts affect them and the options they have to manage the risks and opportunities presented by such impacts. Key considerations for regional businesses and industry if they are to remain sustainable are:

l What are the key risks?

l What are the adaptation options available to address these risks?

l What resources are needed to implement these options?

l What are the research and policy needs for effective future adaptation?

regional overviewRegional Victoria is a key part of Victoria’s economy and has diverse and geographically-specific industry sectors. For example, the La Trobe Valley has substantial mining and energy generation, northern Victoria has substantial wine and food manufacturing based on irrigated agriculture, and tourism activities include downhill skiing in the mountains, tracking mallee fowl in the desert and surfing the pipe at Bells Beach.

Many of Victoria’s regional economies are in transition, with some industries in decline and new industries emerging. Although some sectors have recently declined, total regional employment has grown steadily from 585,996 in 2006 to 725,942 in 2011.1 Much of this increase has occurred in regional centres such as Ballarat, Bendigo and Greater Geelong – stimulating growth in sectors such as construction, retail, trade, health care and community services. Other sectors such as dryland sheep farming, employment in agriculture generally, and regional manufacturing have declined.

Over the past decade, changes in regional demographics, business composition and external economic pressures have combined with changing environmental and climatic conditions, compelling many businesses to find new and innovative ways to survive. Many regional businesses are now vulnerable in ways they have not been previously (see Appendix A). These vulnerabilities include cost burdens for small-to-medium businesses impacted by extreme events. New knowledge, skills and specific information are needed to enable businesses to assess the available options for managing these changing risks and to capitalise on emerging opportunities.

A key challenge for regional businesses is how to make effective decisions in environments that are becoming unfamiliar to ensure that they not only ‘survive but thrive in the future.’2


What is adaptation?Even with concerted efforts to reduce greenhouse gases, some climate change cannot be avoided, with most changes to 2040 being ‘locked in’. All businesses will need to adapt in some way to accommodate this. If they don’t do so in a planned way, they will have to respond to changes as they happen, increasing the likelihood of loss and damage. Such planned adaptation is geographically- and sectorally-specific and will vary across different regions.

Many different definitions of adaptation are in use, most revolving around actions and processes. A widely-accepted definition of adaptation that accommodates both comes from Smit and Wandel: ‘ … a process, action or outcome in a system to allow the system to better cope with, manage or adjust to some changing condition, stress, hazard, risk or opportunity.’3

Why is adaptation different to mitigation?Adaptation and mitigation are two related but different aspects of the climate change agenda, forming the two main types of risk management: climate risk reduction and climate risk response. Mitigation’s primary focus is to reduce climate change risk by reducing greenhouse gas concentrations in the atmosphere through methods such as abatement, sequestration and geo-engineering. It requires a mix of policy and actions operating within global and national frameworks and quantifiable accounting.

Adaptation is context- and geographically-specific, working predominantly at local to regional scales involving actions by individuals, communities and businesses as well as government. Its primary focus is to reduce the negative effects of current climate impacts and prepare for future conditions.

Adaptation is a social process that integrates local knowledge of climate risks and how they are managed, with research findings on how these might change. Adaptation success is difficult to measure and without general guidance it is up to each business to develop their own measures of success.

Why are regional businesses adapting?Regional Victoria is already experiencing the impacts of changing climate through extreme weather events such as drought, heatwaves and storms.4 It has also recently experienced a number of extreme weather-related events such as flooding and extreme bushfires. Current research shows that the frequency and severity of heat-related and fire events has occurred in an abrupt, step-change manner.5 This is contrary to the popular belief that these changes are likely to happen gradually.6 Climate model output shows further sudden changes are likely.

Extreme weather-related events have had a significant economic impact in regional areas (see Figure 1, overleaf). In a recent vulnerability assessment for Victoria completed in late 2007, the risks of changing extremes were recognised7, but their short-term severity was under-estimated due to the assumption of gradual future change. If businesses with potential exposure to such risks are to remain financially viable and resilient, they will need to understand more fully:

l the nature of climate-related risks, especially how they may change

l how to identify and manage changing climate risks, and

l how to define and act upon opportunities that these changes offer.

In the climate-sensitive sector of agriculture, farmers are changing production types and techniques to minimise their exposure to climate-related impacts and take advantage of opportunities in a changing climate. For example, in areas such as the Golden Plains Shire, farming has changed to more intensive and mixed farming (pigs, cattle, chickens). This enables resources, such as water, to be used more effectively – producing higher yields per unit of input and allowing for better animal management during extreme events such as heatwaves. However, intensification may also increase financial risks to other extreme events such as flood and fire.

The community and health sectors have become more alert to the need for new strategies for community-based heatwave management to ensure that vulnerable people have access to essential services and resources. The Builders Labourers Federation is managing the dangers of working in extreme heat by ensuring its members attend training sessions to ensure the union’s heat stress policy is implemented appropriately.8


Changing demographicsThe Victoria in the Future 2012 report by the Department of Planning and Community Services, estimated that the municipalities of Geelong, Ballarat and Bendigo would account for almost 40% of regional population increases in the regions up to 2031. Areas such as Latrobe Valley, Warrnambool and Greater Shepparton could also expect ‘significant increases’ and areas such Horsham and Mildura are expected ‘grow strongly’. In the state’s west, the declining population is expected to continue.9

These changes are influencing economic growth, particularly in areas such as construction, retail, health and social services. Business owners who are new to an area may not have the necessary local knowledge to make informed choices in relation to their business and the possible risks associated with a changing environment. This was certainly the case in the floods of January 2011 in northern Victoria, where many rural landholders who had moved into the district since the last major floods in 1975 under-estimated the severity of the risks and lacked knowledge as how to best prepare and respond – sometimes suffering significant financial and personal loss.

Changing risksWhile future changes in extremes cannot be predicted with any certainty, some recent changes in extreme events show that these events are occurring in new and different ways. Some examples are:

l The millennium drought (1996–2009) was the warmest on record, with the warming being attributed to human causes with high confidence. The decrease in rainfall has also been associated with human causes, but with much lower confidence.10

l Recent warming in south-eastern Australia occurring rapidly in a step-wise fashion affecting days above 35°C. The number of days above 35°C (1997–2012) for Melbourne are equal to those projected for 2030.11

Figure 1: Record-breaking weather 2009/12. Distribution of record-breaking weather events in Victoria since 2009. Source: Bushfires CRC, BoM, Department of Health and Comrie Flood Review. Infographic courtesy of the Commissioner for Environmental Sustainabilty Victoria.


l Heatwaves and wildfires linked to warming and to drought have also undergone step-wise changes. Fire risk during the millennium drought (1996/7–2009/10) was equivalent to the CSIRO’s worst-case scenario projected for 2050.12

l The floods of 2010–11 were of a tropical origin, and though their cause is linked to natural variability, they may have been enhanced by warmer conditions.

l Victoria is currently in a stormy phase, with 21 tornados recorded during 2009–11, and several notable storms causing widespread damage (25 December 2011 and 6 March 2010).13 While consistent with a warmer climate, these events cannot be linked to a human origin with any confidence.

Although previous experience of such events can be used to inform understanding, this experience is incomplete and ‘thinking frameworks’ are needed to deal with managing potentially rapid changes in climate risks into the future.

Types of climate-related risks that a business may face include:

l place-based risks – risks at a specific location (eg. sea level rise and storm surge, flooding, fire)

l activity-based risks – risks faced by a specific activity, especially those that are climate-sensitive (eg. agriculture, nature-based tourism, sea based infrastructure), and

l secondary or transferred risks – risks propagated from a place or an activity to another entity (eg. insurance, finance, loss of supply).

As further rapid changes in climate extremes are anticipated (which will arrive as ‘surprises’ if unprepared for), business and industry need to plan strategically to minimise impacts on their operations. Unmanaged risks can be transmitted widely across a region and its businesses and community with long-lasting effects. The degree to which a business may be affected is generally determined by the nature of the business and where it is situated. Understanding these future risks can assist with building greater preparedness to these events, and can also enable businesses to capitalise on opportunities. Existing examples are the transition of alpine tourism to year-round operations and changes in farming activity to suit new climatic conditions.

Managing change

Managing a changing climate has synergies with innovation and transformation because uncertainty is a key component in all three activities.14 Key areas of uncertainty in adaptation include:

1. uncertainty surrounding future climate risks – particularly when, where and how some future climate events will happen, and

2. uncertainty associated with the outcomes of various adaptation options.

As a result of these uncertainties, process and managing of the risks associated with implementation is core to enabling successful actions. Learning by doing is particularly important.

Managing changing business conditions is equally important. Risks can increase in severity when combined by other stressors, such as:

l financial stressors, such as economic downturns, changing market needs and market failures

l changes in land use and communities

l restrictions in resources (eg. water, land affordable housing for employees, employee skills)

l lack of sector-specific information and knowledge regarding adaptation and how to apply actions into operational frameworks

l changes in government policy, and

l limited capacity and capability.

These added factors can be strong determinants as to how well a business may or may not cope under climate stress.


What is resilience?

‘resilience is not just about being able to survive but also thrive in the future.’— Participant, Climate Adaptation Pathways Workshop,

Department of Industry, Innovation, Climate Change, Science Research and Tertiary Education, 14 April 2013

Resilience in relation to climate change is becoming a more often used term, featuring in both the state Adaptation Plan and Emergency White Paper. Its meaning is not always clear, and can mean different things to different people, making it a difficult concept to put into operation. A useful definition (modified from Grigg et al., 2012) is: ‘ … the capacity of a system (or business) to absorb disruption and reorganise so as to retain its identity by preserving its function, structure and internal workings.’ In the US National Advisory Infrastructure Council report, resilience is described as the aspect that provides the bridge between the possible and the ideal and it describes key elements including:

l robustness

l resourcefulness

l rapid recovery, and

l adaptive capacity.

Another important aspect of resilience is understanding thresholds. A critical threshold for a business is the point where a component of that business (or the business itself), ceases to be able to function in the way it did. Being able to identify the signals that precede these thresholds and take action before the threshold is reached is a key to this concept.16 Thresholds for each business will be different. In situations where a number of businesses are affected, a sectoral or regional critical threshold may be reached.

Business-related thresholds are now being more widely-recognised for their role in regional sustainability. Football teams, bank branches, chemists, doctors and supermarkets are all recognised as being critical to local viability, and the loss of each of these is associated with consequent population and business decline. Therefore, adaptation is being seen in a more pro-active light in being able to maintain important local functions in a changing climate.

Some regional businesses also need to consider whether their processes and business models reduce resilience. The recent trend in lean management led to many businesses removing redundancies or outsourcing services to reduce costs and improve efficiency. In some cases, these actions may increase vulnerability to the impacts of climate change.

Case study a: understanding rural landholder responses to climate change

A study into rural landholder perceptions and responses to climate change in the Muckleford (west of Castlemaine) and Kamarooka (north of Bendigo) districts assessed the influence of attitudes and capacity on their responses to climate change.15 Adaptive responses to prolonged dry conditions (1997–2007) were not related to belief about whether climate was changing due to human causes, but was more tightly related to capacity and resources. The larger farms had greater on-farm diversity in Kamarooka, particularly the options of using lucerne and low-till farming which led to greater responses to drought conditions. Landholders at Muckleford had smaller properties and less capacity, often moving to less intensive activities to reduce their financial risks. In the Muckleford area, this lack of confidence in adaptive capacity was associated with high levels of personal stress.

Case study B: building redundancies into operations to increase resilience

Telstra is the primary provider of telecommunication services in Victoria. Telstra have developed a number of responses to restore damaged services as quickly as possible after an event. One strategy involves building system redundancies. For example, this involves backup power generators for all key pieces of infrastructure and the development of the Cell on Wheels (COW) – a mobile tower that can be transported into areas if the fixed transformers are damaged. There are five COWs in Australia and they are stored in different areas to ensure that only one COW at a time will be damaged in the case of an accident.


The costs of changing climates in the regions

‘We had to borrow an extra, nearly three quarters of a million dollars to get through last year because of our loss,” he said. “But we’ve decided we’re not borrowing any more money to go again, so if we can’t get through we’ll have to reassess the whole situation as to where we go. it’s amazing. i’ve never seen anything like it.’17

— Farmer in Gippsland, ABC Rural News

Many of the businesses impacted by changing events over the past decade, either directly or indirectly, have incurred extra costs as result of these events through:

l loss of services and assets

l reduced income

l recovery costs

l refinancing to maintain operations, and

l cost increases after the event(s).

The costs of single events can be substantial. For example, initial losses incurred in the 2010 and 2011 floods resulted in:

l $836 million claims in insurance

l 123,077 hectares of grazing pasture damaged, and

l 345,645 deceased livestock (330,180 poultry).18

In many parts of regional Victoria, consecutive events have increased not only vulnerability to impacts, but also the cost and damages sustained through subsequent events.

Case study C: gippsland floods 2007, 2012

In the last week of June 2007, Gippsland received record rainfall. The storm followed one of the state’s worst fire seasons, the 2006/07 Great Divide Bushfires, burning 1.2 million hectares and exposing vast areas of soil. Compounded by other minor floods in March and November 2007, the storm in June 2007 resulted in major flooding and widespread damage to community and public assets in Gippsland.

Up to 45 Traralgon properties were inundated, while some remote East Gippsland communities were left without power for up to four days. At Lindenow, vegetable growers lost millions of dollars in produce when the Mitchell River rose, with Bonaccord Farm’s Ross Ingram losing $500,000 worth of cabbages and carrots. Twenty of their trucks were stranded in NSW and the company faced $10,000 in equipment repairs and $150,000 on earthworks. Regionally, the Insurance Council of Australia reported payouts of $15 million.

In response to this event, the State Government quickly established a Flood Recovery Ministerial Taskforce, which outlined a $60 million Flood Recovery Initiative. Of the $60 million, $10 million was allocated to remediation and recovery on public land. Another $10 million of the program was allocated for works focused on stream and water quality.19 This was considered an extreme, 1:100 year event.

Heavy rainfall on 5–6 June 2012 led to severe flooding across many of the same rivers. The Morwell River Diversion, which had cost $120 million and received design awards collapsed, flooding the Yallourn brown coal mine. This lead to significant production losses in the mine and adjoining power station. The collapsed bank was letting about 500 megalitres of water per day into the mine almost six weeks later, hampering both mining and power generation. By the end of June, direct costs had been $109 million20 but were expected to be much higher – with owner estimates of up to $300 million21.

In early 2013, the owner applied for a pipe diversion direct from the Morwell to La Trobe Rivers to bypass the mine and increase pumping from rainfall being collected by the expanded mine area.


key aspects of adaptation

Infrastructure

Infrastructure – both ‘hard’ and ‘soft’ – is recognised as a key aspect of regional business viability. In many areas, damage to hard infrastructure by fire and flood have led to power outages and transport blockages incurring considerable cost to businesses. In the 2010–11 floods, infrastructure such as roads and weirs were totally destroyed, and the replacement of these assets made significant demand on local, state and federal resources. Soft infrastructure is reflected in the vitality, knowledge and resilience of the business and broader community.

Telecommunication providers are increasingly important to regional businesses, not only for voice communication but also for supply of data services such as EFTPOS.22 Although exchanges are built on high ground, they are still vulnerable to fire or extreme weather; it can take weeks and sometime months after a major event such as the Black Saturday bushfires in 2009 to fully restore services. The fire at the Warrnambool Regional Telephone Exchange in November 2012 (although not caused by a bushfire), illustrated the financial impact this sort of event can have, affecting approximately 12,000 businesses. With flow-on consumption effects included, the total regional cost was estimated at $28.3 million, with a loss of up to 89 jobs.23

Supply chains can be severely disrupted if critical infrastructure such as roads, ports or rail are impacted. This has particular ramifications for businesses that rely upon or supply food, as Australia does not hold any official food reserves for use in the event of a shock to the food supply.24

Recent events such as the heatwaves, bushfires and flooding have increased pressure and, at times, exceeded capacity and available resources in health, police and emergency services sectors. Businesses will increasingly need to consider their own responsibilities and capacities during these types of events.

All businesses will need to assess how exposed their core operations are to changing climate risk, and consider how they may forestall or respond to the failure of any climate-exposed critical infrastructure on which they rely.

Skills development

For emerging markets to succeed, new skills will need to be developed, requiring some businesses to transform. Up-skilling will assist employees of declining industries to move to new growth industries and will provide personnel with the skills to develop the new operational processes needed to deal effectively with adaptation. TAFE and industry bodies have a key role in providing such training.

Accessible communication and information

Although most businesses are aware of climate change and mitigation, awareness of adaptation remains limited – particularly in the small-to-medium business sector.25 Sector-specific communication and information that is fit-for-purpose is needed to enable businesses to plan and build resilience to future events. Ascertaining what should be communicated and by whom is pivotal. Organisations, such as industry bodies and local government, that allow for transfer to the most recent research to the businesses most at risk, are key to enabling decision-making that supports future resilience.

Resources

Resource availability can directly impact on the ability of a business or sector to overcome the adverse effects of climate impacts, as illustrated in case study C on page 6. It is important to understand:

l the types of resources needed by specific business and industry sectors

l what actions can be undertaken with the resources that sectors and businesses have at their disposal, and

l the potential for resources to be shared across businesses and sectors.

New ways of resourcing activities that are responsive to the changing needs of business and industry need to be explored. Access to finance is key. For example, the dairy processor Murray Goulburn Cooperative has set up a program where it finds investors to buy a farm, then lease it back to dairy suppliers who want to expand. Currently, they are funded by a European super fund and are looking for future investors in Australia.


Smart futures – creating opportunities

‘We’ve got some international funds at the moment, but really it’s more about for us putting capital in the hands of good dairy farmers, local dairy farmers, who can use that capital in the best way.’26

— Manager of Shareholder Relations, Robert Poole, Murray Goulburn Cooperative

Many businesses and industry sectors in regional Victoria are already responding through innovation to environmental change. Many of these innovations are as a result of the core service or product being affected by impacts of climate change and the need for a business or industry sector to transition to new practices or transform to survive.

Some of the key areas of opportunities that arise with adaptation are:

l provision of new goods and services

l development and communication of new knowledge

l transition or transformation of new processes and business models

l inclusion of adaptation options into business decisions to develop better resilience

l long-term planning to reduce risk and cost in relation to climate impacts, and

l developing new ways of resourcing and financing business operations.

Opportunities may also arise (that are not a result of climate change) that could be maximised by considering adaptation options. Such opportunities lie with replacing ageing infrastructure or crop selection where the previous choice is economically unviable.

Knowledge may also exist within an activity or individual that is no longer needed in one circumstance but is needed elsewhere. An example of this is a group of farmers in Victoria who, although they had ceased farming, mentored some Indonesian farmers, increasing their yields.

Policy at the state levelAdaptation policy in Victoria is informed by two recent documents: the Climate Change Adaptation Plan for Victoria, released in March 2013; and the White Paper on Victorian Emergency Management Reform. These documents are complementary – the White Paper focuses on improving emergency and disaster response to extreme events (disaster resilience), whereas the Adaptation Plan focuses on planning for changing conditions due to climate change. Both aim to increase resilience to changing hazards within government, industry and the community.

One of the four major stakeholder partnerships within the Adaptation Plan is to engage with the private sector to inform and support business in understanding and managing their climate risks.

Regulatory frameworks for private industry that allow businesses to manage their own risks, remove disincentives for private adaptation and promote market mechanisms for adaptation are favoured by the plan. This recognises that risk management is generally best undertaken by those who are directly affected, and who are in a position to manage these risks. The Adaptation Plan also suggests that climate-related risks can be allocated with the other risks that businesses generally have to manage.

Three priorities for private sector support within the plan are:

1. facilitating place-based risk management, including through hazard identification management and land-use planning

2. setting the right conditions for businesses to adapt such as removing barriers to effective adaptation, providing access to information to support appropriate risk allocation and promoting business innovation, and

3. supporting the development of effective insurance markets for climate risk.


The Victorian government has key roles in:

l providing information and helping to build adaptive capacity

l removing barriers to effective adaptation

l providing access to information to support appropriate risk allocation, and

l promoting business innovation.

Access to research is seen as a public good – particularly where information on climate and climate risks can help organisations shape their own resilience needs, and where that research would be too costly to generate inhouse. Organisations such as Victorian Climate Change Centre Adaptation Research, and peak bodies such as Australian Industry Group and Municipal Association Victoria are currently engaged in such roles.

For disaster management, priorities are business continuity, emergency relief and loans, and post-event advice on recovery. A new Strategy for Critical Infrastructure Resilience is being developed this year (2013) to replace Part 6 of the Terrorism (Community Protection) Act. Infrastructure resilience is based on the sectors: banking and finance; communications; energy; food; health; police and emergency services; transport; and water. Again, it is stated that owners and operators of private infrastructure are best placed to undertake planning and preparation to protect their assets.

federal policyIn 2010, a new national adaptation strategy was published with the following priorities:

l coastal management

l water

l infrastructure

l natural systems of national significance

l prevention, preparedness, response and recovery with regard to natural disasters, and

l agriculture.

National vulnerability assessments have also been produced for coasts, biodiversity, world heritage sites, the national reserve system, and fire regimes. A National Strategy for Disaster Resilience: Building our nation’s resilience to disasters has also been tabled by COAG, with government programs in place to develop this agenda.

The future for a national research program for adaptation is uncertain, as the National Climate Change Adaptation Research Facility, the main Commonwealth-funded adaptation research body, is not funded beyond June 30 this year. As such, the research-outreach relationship between federal and state governments remains unclear.

Public-private relationshipsTo date, most adaptation research activities have been undertaken by research institutions, but the results of this research are not always clearly communicated or transferred to businesses. Some of these projects apply to business and industry sectors. Due to the location- and context-specific needs of adaptation, it is increasingly important for research bodies to develop working relationships with business and industry bodies. This will ensure that end-user needs are met and that the research is relevant, accessible and can be used in specific business/industry contexts.

Properly applied, adaptation is an area of innovation, allowing new skills and knowledge to be transferred between businesses and across sectors. Most innovation is being undertaken through collaborative frameworks involving research bodies, local communities and government agencies. These communities of practice are still in their infancy and will develop more fully as the practice of adaptation matures. To be effective, they require business, researchers and government bodies to identify synergies and develop a common understanding that incorporates and respects their different areas of expertise. Although changes to public policy may still be a goal, the involvement of business as a central player is absolutely necessary, to help avoid maladaptive responses.

Smart Futures: VCCCAR Regional Business Breakfast Roundtable Context Paper Page �0

Over the last few years, the role of research has progressed in some sectors from providing scientific information for analytic decision-making to participatory processes that involve both researchers and practitioners. There is potential to expand these types of collaborations to include all regional business and industry sectors. Key possibilities for future adaptation research include:

l building new scientific knowledge and technology into business innovation models

l documenting business responses to climate to develop an ‘adaptation library’

l assisting monitoring and evaluation activities, and

l developing new frameworks that enable decision-making and action in collaboration with stakeholders.

Conclusion

‘the reality is that we must address emerging risks with diligence, commitment, and the understanding that we cannot reroute hurricanes, intercept every cyber attack, or prevent every disruption.’— Executive Summary, National Infrastructure Advisory Council A Framework for Establishing Critical Infrastructure

Resilience Goals, Final Report and Recommendations by the Council, October 19 2010.

Regional Victoria is in a state of transition. As a result, it is a time of both opportunity and challenge for the business sector in Victoria. In planning for the future, regional businesses and industries need to consider how to integrate adaptation options in business decision-making processes. Consideration of how to minimise physical, legal and financial risks through improving the resilience of their assets (social and capital), the development of new processes and business models, and accessible and relevant communication are pivotal to this.

The key to being part of a Smart Future is the ability to make informed decisions that enable the changes needed with the resources available. For business and industry sectors, ensuring future market needs are met will depend on their ability to build capacity in a way that creates resilience and capitalises on the opportunities these changes offer.

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references1 Department of State Development, Business and Innovation. (2013). Industry Atlas Of Victoria, State Government of Victoria.

http://www.dbi.vic.gov.au/research-reports/industry-atlas-of-victoria (Accessed 8 May 2013).

2 Participant, Climate Adaptation Pathways Workshop, Department of Industry, Innovation, Climate Change, Science Research and Tertiary Education, 14 April 2013.

3 Smit, B. and Wandel, J. (2006). Adaptation, adaptive capacity and vulnerability. Global Environmental Change, 16, 282–292.

4 Steffen, W., Hughes, L., Sahajwalla, V. and Hueston, G. (2012). The Critical Decade: Victorian climate impacts and opportunities. Climate Commission Secretariat (Department of Climate Change and Energy Efficiency), Canberra, Australia.

5 Jones, R.N. (2012). Detecting and attributing nonlinear anthropogenic regional warming in southeastern Australia. Journal of Geophysical Research, 117, D04105.

6 Jones, R.N., Young, C.K. and Handmer, J. (2012). Beyond the Mean: Valuing Adaptation under Rapid Change, Climate Change Working Paper No 17, Victoria University Centre for Strategic Economic Studies, Melbourne, Australia.

7 Jones, R. and Webb, L. (2008). Regional and Sectoral Vulnerability to Climate Change in Victoria. Report prepared for Victorian Department of Treasury and Finance, CSIRO Climate Adaptation Flagship, Melbourne, Australia.

8 Slater and Gordon. (November 2012), Media release. http://www.slatergordon.com.au/media/news-media-releases/vic-act-sa-tas-nt/Outdoor-workers-should-be-mindful-of-heatwave-121130 (Accessed 8 May 2013).

9 DPCD. (2012). Victoria in Future: 2012 population and household projections 2011–2031 for Victoria and its regions. Spatial Analysis and Research, Department of Planning and Community Development, Melbourne, Australia.

10 The South-east Australian Climate Initiative (SEACI). (2011). The Millennium Drought and 2010/11 Floods. CSIRO, Melbourne.

11 Jones, R.N., Young, C.K., Handmer, J., Keating, A., Mekala, G.D. and Sheehan, P. (2013). Valuing Adaptation under Rapid Change, National Climate Change Adaptation Research Facility, Gold Coast, Australia.

12 Ibid.

13 Bureau of Meteorology data, downloaded April 2013.

14 Jones, R.N., Young, C.K., Handmer, J., Keating, A., Mekala, G.D. and Sheehan, P. (2013). Valuing Adaptation under Rapid Change, National Climate Change Adaptation Research Facility, Gold Coast, Australia.

15 Rogers, M., Curtis, A. and Mazur, N. (2012). The influence of cognitive processes on rural landholder responses to climate change. Journal of Environmental Management, 111, 258–266.

16 Greg Hunt, Executive Officer SECCCA, Climate Adaptation Pathways Workshop, Department of Industry, Innovation, Climate Change, Science Research and Tertiary Education, 14 April 2013.

17 ABC Rural. (14 February, 2012). http://www.abc.net.au/rural/news/content/201202/s3430150.htm?site=melbourne (Accessed 8 May 2013).

18 Commissioner for Environmental Sustainability Victoria. (2012). Foundation Paper One. Climate Change Victoria: The science, our people and our state of play, 40.

19 Victorian Government of Sustainability and Environment & Parks Victoria. (2010). 2007 Gippsland Flood/Storm Recovery Program Final Report. Victorian Government of Sustainability and Environment & Parks Victoria, Melbourne, Australia.

20 Song, M. (21 August, 2012). $109m bill for Yallourn. In: Latrobe Valley Express. Latrobe Valley Express Partnership, Morwell, Australia.

21 Morton, A. (16 July, 2012). Yallourn coal mine flood worsens. In: The Age, Fairfax Press, Melbourne, Australia.

22 Phone Interview with Jeremy Flanders, General Manager, Risk and Compliance, Telstra Consumer Telstra. (1 May, 2013).

23 Victorian Government Submission to the Commonwealth Department of Broadband, Communications and the Digital Economy. (February 2013). Inquiry to learn lessons from the Warrnambool exchange fire, 8

24 Keating, A. (2013). Food Security in Australia: The Logistics of Vulnerability. In: Food Security in Australia: Challenges and Prospects for the Future (Eds Farmar-Bowers, Q., Higgins, V. and Millar, J.). Springer, New York and Heidelberg, 21–34.

25 Interview with Kate Elsbourough, Manager Sustainable Services, Victorian Employers’ Chamber of Commerce and Industry (VECCI).

26 Wendy Collis, (2 May, 2013). ABC Rural. http://www.abc.net.au/rural/news/content/201305/s3750218.htm (Accessed 8 May 2013).

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appendix a: regional Business risk

STATISTICAL DIVISION MAJOR CLIMATE-RELATED RISKS

ECONOMIC OVERVIEW SENSITIVE INDUSTRIES

Melbourne Drought, flash-flooding, fire, heat waves, severe storms, storm surge and sea level rise

Major state economy, mixed but dominated by services

Placed-based enterprises in coastal, peri-urban and low-lying areas; logistics and transport, health

Barwon Drought, flash-flooding, fire, heat waves, severe storms, storm surge and sea level rise

Economy close to the state average, agriculture may benefit relative to northern regions, strong tourism

Placed-based enterprises especially in Otways and coast, agriculture, tourism, health, coastal infrastructure, energy

Western District Drought, fire, heat waves, riverine flooding, severe storms, storm surge and sea level rise

The second-most dependent statistical division on agriculture, and small service and tourism economy

Place-based enterprises in coastal and forested areas, agriculture, tourism, coastal infrastructure, water services

Central Highlands Drought, fire, flash flooding, heat waves, riverine flooding, severe storms

Mixed economy close to state average, extensive agriculture shifting to local intensive, growing service and amenity economy

Place-based enterprises in forested areas, agriculture, water services, health, forestry

Wimmera Drought, fire, flash flooding, heat waves, riverine flooding, severe storms

Most agricultural economy in the state, highly dependent on wheat,

Place-based enterprises in forested areas and on floodplains, agriculture, tourism, health, water services

Mallee Drought, fire, heat waves, riverine flooding, severe storms

Agriculture-dominated economy, especially irrigated viticulture and wine-making.

Place-based enterprises in mallee areas and on floodplains, wine industry and irrigated agriculture, health

Loddon-Campaspe Drought, fire, heat waves, riverine flooding, severe storms

Economy close to the state average due to recent declines in agricultural output

Place-based enterprises on floodplains and in forested areas, irrigated agriculture, health, tourism, infrastructure

Goulburn Drought, fire, flash flooding, heat waves, riverine flooding, severe storms

Irrigated agriculture and manufacturing-dominated economy

Place-based enterprises on floodplains and in forested areas, irrigated agriculture, tourism, health, infrastructure

Ovens-Murray Drought, fire, flash flooding, heat waves, riverine flooding, severe storms

Agriculture and manufacturing-dominated economy

Place-based enterprises on floodplains and in forested and alpine areas, irrigated agriculture, tourism, energy and infrastructure

East Gippsland Drought, flash-flooding, fire, heat waves, riverine flooding, severe storms, storm surge and sea level rise

Agriculture, forestry and tourism-based economy

Place-based enterprises in coastal, floodplain and forested areas, agriculture, forestry, tourism, coastal infrastructure

Gippsland Drought, flash-flooding, fire, heat waves, severe storms, storm surge and sea level rise

Agriculture and energy-dominated economy

Place-based enterprises on floodplains and in forested areas, tourism, energy and infrastructure

Date post:	13-Nov-2023
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