Australia lost tens of billions of dollars thanks to natural disasters
A Deakin University analysis of the consequences of natural disasters has found floods are more likely to impact the Australian economy than bushfires.
Professor Mehmet Ulubasoglu, from Deakin Business School, said while it was well known that natural disasters such as floods and bushfires had an immense impact on the economy and lives of people living in affected areas, any ongoing economic impact was less understood.
"In 2010-11 alone, the cost of damage and loss from the Queensland floods was $14.1 billion. It is estimated that by 2050 the economic cost of natural disasters will exceed $33 billion per year," Professor Ulubasoglu said.
"Being one of the largest countries in the world by land mass – almost 80 per cent of the size of continental Europe, with large enough differences in weather but with comparable institutional frameworks across states—Australia offers a unique platform to estimate the state-wide effects of natural disasters.
"To the best of our knowledge, this is one of the first systematic studies to highlight the state-wide economic impacts of natural disasters in an advanced country context."
Professor Ulubasoglu and Deakin Business School research fellow Dr Muhammad Habibur Rahman examined how natural disasters affect the prices of goods and services and different sections of the economy, including agriculture, mining and manufacturing and services sectors such as utilities, construction, transportation, safety and dwellings.
The pair analysed economic data from each Australian state and territory from 1978 to 2014, along with information on timing and location of 36 major fires and 47 major floods and found floods had an adverse and multi-year effect on agricultural output.
Their research, which is funded by the Bushfire and Natural Hazard Cooperative Research Centre (BNHCRC), found that a state that experienced a flood in a given year encountered, on average, 4.5 per cent lower agricultural production both that year and the next, compared to a state that did not experience a flood.
"This suggests that Australia lost two years' worth of agricultural output during the period 1978 to 2014," Professor Ulubasoglu said.
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