Widespread and severe impacts on ecosystems and species are now evident across the region (very high confidence) (Table 11.4). Climate impacts reflect both ongoing change and discrete extreme weather events (Harris et al., 2018), and the climatic change signal is emerging despite confounding influences (Hoffmann et al., 2019). Fundamental shifts are observed in the structure and composition of some ecosystems and associated services (Table 11.4). Impacts documented for species include global and local extinctions, severe regional population declines and phenotypic responses (Table 11.4). In terrestrial and freshwater ecosystems, land use impacts are interacting with climate, resulting in significant changes to ecosystem structure, composition and function (Bergstrom et al., 2021), with some landscapes experiencing catastrophic impacts (Table 11.4). Some of the observed changes may be irreversible where projected impacts on ecosystems and species persist (Table 11.5). Of note is the global extinction of an endemic mammal species, the Bramble Cay melomys (Melomys rubicola), from the loss of habitat attributable in part to sea level rise (SLR) and storm surges in the Torres Strait (Table 11.4).

Natural forest and woodland ecosystem processes are experiencing differing impacts and responses depending on the climate zone (high confidence). In Australia, an overall increase in the forest fire danger index, associated with warming and drying trends (Table 11.2a), has been observed particularly for southern and eastern Australia in recent decades (Box 11.1). The 2019–2020 mega wildfires of south eastern Australia burnt between 5.8 and 8.1 million hectares of mainly temperate broadleaf forest and woodland, but with substantial areas of rainforest also impacted, and were unprecedented in their geographic location, spatial extent and forest types burnt (Boer et al., 2020; Nolan et al., 2020; Abram et al., 2021; Collins et al., 2021; Godfree et al., 2021). The human influence on these events is evident (Abram et al., 2021; van Oldenborgh et al., 2021) (Box 11.1). The fires had significant consequences for wildlife (Hyman et al., 2020; Nolan et al., 2020; Ward et al., 2020) (Box 11.1) and flow-on impacts for aquatic fauna (Silva et al., 2020). In southern Australia, deeply rooted native tree species can access soil and groundwater resources during drought, providing a level of natural resilience (Bell and Nikolaus Callow, 2020; Liu et al., 2020). However, the Northern Jarrah forests of south western Australia have experienced tree mortality and dieback from long-term precipitation decline and acute heatwave-compounded drought (Wardell-Johnson et al., 2015; Matusick et al., 2018). While there is limited information on observed impacts for New Zealand, increased mast seeding events in beech forest ecosystems that stimulate invasive population irruptions have been recorded (Schauber et al., 2002; Tompkins et al., 2013).

Table 11.2a | Observed climate change for Australia.

Table 11.3b | Projected climate change for New Zealand. Projections are given for different RCPs (RCP2.6 is low, RCP4.5 is medium, RCP8.5 is high) and years (e.g., 20-year period centred on 2090). Uncertainty ranges are 5th–95th percentiles, and median projections are given in square brackets where possible. Preliminary projections (10th–90th percentiles) based on CMIP6 models are included for some climate variables from the IPCC (2021) WGI report.

Table 11.4 | Observed impacts on terrestrial and freshwater ecosystems and species in the region where there is documented evidence that these are directly (e.g., a species thermal tolerances are exceeded) or indirectly (e.g., through changed fire regimes) the result of climate change pressures.

In the near term (2030–2060), climate change is projected to become an increasingly dominant stress on the region’s biodiversity, with some ecosystems experiencing irreversible changes in composition and structure and some threatened species becoming extinct (high confidence). Climate change will interact with current ecological conditions, threats and pressures, with cascading ecological impacts, including population declines, heat-related mortalities, extinctions and disruptions for many species and ecosystems (high confidence) (Table 11.5). These include inadequate allocation of environmental flows for freshwater fish (Vertessy et al., 2019), native forest logging for old-growth-forest-dependent fauna (Lindenmayer et al., 2015; Lindenmayer and Taylor, 2020a; Lindenmayer and Taylor, 2020b), and invasive species (Scott et al., 2018). Climate change has synergistic and compounding impacts, particularly in bioregions already experiencing ecosystem degradation, threatened endemics and collapse of keystone species, including those of value to Indigenous Peoples, and high extinction rates as a consequence of human activities (Table 11.4) (Gordon, 2009; Australia SoE, 2016; Weeks et al., 2016; Cresswell and Murphy, 2017; Hare et al., 2019; MfE, 2019; Lindenmayer and Taylor, 2020a; Lindenmayer and Taylor, 2020b; Bergstrom et al., 2021). Some native species are projected to have potentially greater geographic range if they can colonise new areas, while other species may be resilient to projected climate change impacts (Bulgarella et al., 2014; K.E. Lawrence et al., 2017; Conroy et al., 2019; Rizvanovic et al., 2019).

Table 11.5 | An indicative selection of projected climate-change impacts on terrestrial and freshwater ecosystems and species in Australia and New Zealand respectively.

In southern Australia, some forest ecosystems (alpine ash, snow gum woodland, pencil pine, northern jarrah) are projected to transition to a new state or collapse due to hotter and drier conditions with more fires (high confidence) (Table 11.5). In Australia, most native eucalyptus forest plants have a range of traits that enable them to persist with recurrent fire through recovery buds (sprouters) or regenerate through seeding (Collins, 2020), affording them a high level of resilience. For high-end projected 2060–2080 fire weather conditions in southeast Australia (Clarke and Evans, 2019), stand-killing wildfires could occur at a severity and frequency greater than the regenerative capacity of seeders (Enright et al., 2015; Clarke and Evans, 2019). Most New Zealand native plants are not fire resistant and are projected to be replaced by fire-resistant introduced species following climate-change-related fires (Perry et al., 2014).

A loss of alpine biodiversity in the southeast Australian Alps bioregion is projected in the near-term as a result of less snow on snow patch feldmark and short alpine herb fields as well as increased stress on snow-dependent plant and animal species (high confidence) (Table 11.3, Table 11.5). In Australia, invasive plants’ and weeds’ response rates are expected to be faster than for native species, and climate change could foster the appearance of a new set of weed species, with many bioregions facing increased impacts from non-native plants (medium confidence) (Gallagher et al., 2013; Scott et al., 2014; March-Salas and Pertierra, 2020) (Table 11.5), along with declines in some listed weeds (Duursma et al., 2013; Gallagher et al., 2013). In New Zealand, climate change is projected to enable invasive species to expand to higher elevations and southwards (medium confidence) (Table 11.5) (Giejsztowt et al., 2020; MfE, 2020a).

Projected responses of ecosystem processes are uncertain in part due to complex interactions of climate change with soil respiration, plant nutrient availability (Hasegawa et al., 2015; Orwin et al., 2015; Ochoa-Hueso et al., 2017) and changing fire regimes (Table 11.5) (Scheiter et al., 2015; Dowdy et al., 2019). For aquatic biota, responses will reflect seasonal differences in water temperature (Wallace et al., 2015) and changes in rainfall intensity, productivity and biodiversity (Jardine et al., 2015). Extreme floods may have negative impacts on New Zealand river biota, by mobilising nutrients, sediments and toxic chemicals and aiding the dispersal of invasive species. These effects are compounded by homogenisation of rivers through channelisation (Death et al., 2015).

Improved coastal modelling, experiments and in situ studies are reducing uncertainties at a local scale about the impact of future sea level rise (SLR) on coastal freshwater terrestrial wetlands (medium confidence) (Shoo et al., 2014; Bayliss et al., 2018; Grieger et al., 2019). Low-lying coastal wetlands are susceptible to saltwater intrusion from sea level rise (SLR) (Shoo et al., 2014; Kettles and Bell, 2015; Finlayson et al., 2017) with consequences for species dependent on freshwater habitats (Houston et al., 2020). Saline habitat conditions will move inland and new coastal ecosystem states may emerge, including the World Heritage listed Kakadu’s freshwater wetland (Bayliss et al., 2018) (Table 11.5). Increasingly, sea level rise (SLR) will shrink the intertidal zone, having implications for wading birds which use this zone (Tait and Pearce, 2019) (Box 11.6). The ecology of freshwater wetlands in New Zealand are projected to be impacted by the intersection of warming, drought and heavy rainfall (Pingram et al., 2021) (Table 11.5).

The impacts on species from projected global warming depend on their physiological and ecological responses for which knowledge is limited (Table 11.5) (Bulgarella et al., 2014; Carter et al., 2018; Green et al., 2021). Knowledge of projected impacts is constrained by uncertainties about the influence of physiological limits, barriers to dispersal, competition, the availability of habitat resources (Worth et al., 2014) and disruptions to ecological interactions (Lakeman-Fraser and Ewers, 2013; Parida et al., 2015; Porfirio et al., 2016). Gaps in ecological modelling of future climate impacts include consideration of long-term rainfall and temperature changes (Grimm-Seyfarth et al., 2017; Grimm-Seyfarth et al., 2018), species dispersal rates, evolutionary capacity and phenotypic plasticity and the thresholds at which they are considered adequate to counter the impacts of climate change (Ofori et al., 2017b), as well as indirect effects including sea level rise (SLR) and altered fire regimes (Shoo et al., 2014; Cadenhead et al., 2016; He et al., 2016).

Managing climate change risks to ecosystems is primarily based on reducing the impact of other anthropogenic pressures, including invasive species, and facilitating natural adaptation (high confidence). This approach is most feasible within protected areas on public, private and Indigenous land and sea (Bellard et al., 2014; Liu et al., 2020) but is also applicable elsewhere (Barnes et al., 2015). Effective strategies promote ecosystem resilience by changing unsustainable land uses and management practices, increasing habitat connectivity, controlling introduced species, restoring habitats, implementing appropriate fire management, integrated risk assessment and adaptation planning (B. Frame et al., 2018; Lindenmayer et al., 2020; Macinnis-Ng et al., 2021). Complementary approaches include ex situ seed banks (Morrison and Pickering, 2013; Christie et al., 2020).

Best practice conservation adaptation planning is informed by data on key habitats, including refugia, and restoration that facilitates species movements and employs adaptive pathways (very high confidence) (Guerin and Lowe, 2013; Reside et al., 2014; Shoo et al., 2014; Keppel et al., 2015; Andrew and Warrener, 2017; Baumgartner et al., 2018; Harris et al., 2018; Jacobs et al., 2018a; Das et al., 2019; Walker et al., 2019; Molloy et al., 2020). Landscape planning (Bond et al., 2014; McCormack, 2018) helps reduce habitat loss, facilitates species dispersal and gene flow (McLean et al., 2014; Shoo et al., 2014; Lowe et al., 2015; Harris et al., 2018; McCormack, 2018) and allows for new ecological opportunities (Norman and Christidis, 2016). Coastal squeeze is a threat to freshwater wetlands and requires planning for the potential inland shift (Grieger et al., 2019). Adaptations that maintain critical volumes and periodicity of environmental flows will help protect freshwater biodiversity (Box 11.3) (Yen et al., 2013; Barnett et al., 2015; Wang et al., 2018b).

Adaptation planning for ecosystems and species requires monitoring and evaluation to identify trigger points and thresholds for new actions to be implemented (high confidence) (Tanner-McAllister et al., 2017; Williams et al., 2020). Best planning practice includes keeping options open (Barnett et al., 2015; Dunlop et al., 2016; Finlayson et al., 2017) and updating management plans in light of new information. New insights are emerging into how species’ natural adaptive capacities can inform adaptation planning (Llewelyn et al., 2016; Steane et al., 2017; Hoeppner and Hughes, 2019). Physiological limits to adaptation in some species are being identified (Barnett et al., 2015; Sorensen et al., 2016), and where natural responses are not feasible, human-assisted translocations may be warranted (Becker et al., 2013; Chauvenet et al., 2013; Innes et al., 2019) for some species (Ofori et al., 2017a; Ofori et al., 2017b). Legal reform may be needed to better enable climate adaptation for biodiversity conservation that recognises species’ natural adjustments to their distributions and the difficulties encountered in predicting the consequences for ecological interactions and ecosystem services (McCormack, 2018; McDonald et al., 2019).

Adaptation research priorities include understanding of the interactions and cumulative impacts of existing stressors and climate change and the implications for managing ecosystems and natural resources (Williams et al., 2020). For Australia, research on implementation strategies for conservation and managing threats, stress and natural assets is a priority (Williams et al., 2020). For New Zealand, understanding how terrestrial ecosystems and species respond to climate change is a priority, and where existing stressors are affecting freshwater quantity and quality, in situ monitoring to detect and evaluate projections of climate change impacts on biodiversity and a national data repository are lacking (MfE, 2020a). The projected increase in invasive species indicates the importance of a step-up in pest management efforts to ensure native species persistence as invasive species spread from climate change (Firn et al., 2015). There remains a gap between the knowledge generated, potential adaptation strategies and their incorporation into conservation instruments (medium confidence) (Graham et al., 2019; Hoeppner and Hughes, 2019), though there is increasing recognition of the need to improve governance and management structures for their implementation (Christie et al., 2020).

Climate change is having major impacts on the region’s oceans (very high confidence) (Table 11.6) (Law et al., 2016; Sutton and Bowen, 2019). Rising sea surface temperatures (SSTs) have exacerbated marine heatwaves, notably near western Australia in 2011, the GBR in 2016, 2017 and 2020 and the Tasman Sea in 2015/2016, 2017/2018 and 2018/2019 (Table 11.2) (BoM and CSIRO, 2018 ; AMS, 2019; NIWA, 2019; Salinger et al., 2019b; Sutton and Bowen, 2019; BoM, 2020; Salinger et al., 2020; Oliver et al., 2021). Temperature anomalies ranged from 1.2°C to 4.0°C and durations ranged from 90–250 days (Table 11.2).

Table 11.6 | Observed climate-change-related changes in the marine ecosystems of Australia and New Zealand. Climate-related impacts have been documented at a range of scales from single-species or region-specific studies to multi-species or community-level changes.

Ocean carbon storage and acidification has led to decreased surface pH in the region (Table 11.2), including the sub-Antarctic waters off the East Coast of New Zealand’s South Island (very high confidence) (Law et al., 2016). The depth of the Aragonite Saturation Horizon has shallowed by 50–100 m over much of New Zealand, which may limit and/or increase the energetic costs of growth of calcifying species (low confidence) (Anderson et al., 2015; Bostock et al., 2015; Mikaloff-Fletcher et al., 2017).

In the estuaries of southwestern Australia, sustained warming and drying trends have caused dramatic declines in freshwater flows of up to 70% since the 1970s and increased frequency and severity of hypersaline conditions, enhanced water column stratification and hypoxia and reduced flushing and greater retention of nutrients (Hallett et al., 2017).

Extensive changes in the life history and distribution of species have been observed in Australia’s (very high confidence) (Gervais et al., 2021) and New Zealand’s marine systems (medium confidence) (Table 11.6) (Cross-Chapter box MOVING SPECIES in Chapter 5). New occurrences or increased prevalence of disease, toxins and viruses are evident (de Kantzow et al., 2017; Condie et al., 2019), along with heat stress mortalities and changes in community composition (Wernberg et al., 2016; Zarco-Perello et al., 2017; Thomsen et al., 2019). Extreme climatic events in Australia from 2011 to 2017 led to abrupt and extensive mortality of key habitat-forming organisms — corals, kelps, seagrasses and mangroves — along over 45% of the continental coastline of Australia (high confidence) (Babcock et al., 2019).

In 2016 and 2017, the GBR experienced consecutive occurrences of the most severe coral bleaching in recorded history (very high confidence) (Box 11.2), with shallow-water reef in the top two-thirds of the GBR affected and the severity of bleaching on individual reefs tightly correlated with the level of local heat exposure (Hughes et al., 2018b; Hughes et al., 2019c). Mass mortality of corals from these two unprecedented events resulted in larval recruitment in 2018 declining by 89% compared to historical levels (Hughes et al., 2019b). southern reefs were also affected by warming, although significantly less than in the north (Kennedy et al., 2018). Coral reefs in Australia are at very high risk of continued negative effects on ecosystem structure and function (very high confidence) (Hughes et al., 2019b), cultural well-being (very high confidence) (Goldberg et al., 2016; Lyons et al., 2019), food provision (medium confidence) (Hoegh-Guldberg et al., 2017), coastal protection (high confidence) (Ferrario et al., 2014) and tourism (high confidence) (Deloitte Access Economics, 2017; Prideaux and Pabel, 2018; GBRMPA, 2019). If bleaching persists, an estimated 10,000 jobs and AUD$1 billion in revenue would be lost per year from declines in tourism alone (Swann and Campbell, 2016).

Future ocean warming, coupled with periodic extreme heat events, is projected to lead to the continued loss of ecosystem services and ecological functions (high confidence) (Smale et al., 2019) as species further shift their distributions and/or decline in abundance (Day et al., 2018). Compounding climate-driven changes in the distribution of habitat-forming species, invasive macroalgae are predicted to exhibit higher growth under all higher pCO2 and lower pH conditions (Roth-Schulze et al., 2018). Corals and mangroves around northern Australia and kelp and seagrass around southern Australia are of critical importance for ecosystem structure and function, fishery productivity, coastal protection and carbon sequestration; these ecosystem services are therefore extremely likely 2 to decline with continued warming. Equally, many species provide important ecosystem structure and function in New Zealand’s seas including in the deep sea (Tracey and Hjorvarsdottir, 2019). The future level of sustainable exploitation of fisheries is dependent on how climate change impacts these ecosystems. Native kelp is projected to further decline in southeastern New Zealand with warming seas (Table 11.6). Climate change could affect New Zealand fisheries’ productivity (Cummings et al., 2021), and both ocean warming and acidification may directly affect shellfish culture (Cunningham et al., 2016; Cummings et al., 2019) and indirectly through changes in phytoplankton production (Pinkerton, 2017).

Climate-change-related temperature and acidification may affect species sex ratios and, thus, population viability (medium confidence) (Table 11.3) (Law et al., 2016; Tait et al., 2016; Mikaloff-Fletcher et al., 2017). Acidification may alter sex determination (e.g., in the oyster Saccostrea glomerate), resulting in changes in sex ratios (Parker et al., 2018), and may thus affect reproductive success (low confidence). Decreasing river flows (Chiew et al., 2017) are projected to cause periodically open estuaries across southwest Australia to remain closed for longer periods, inhibiting the extent to which marine taxa can access these systems (Hallett et al., 2017) and with warming predicted to constrain activity in some large fish (Scott et al., 2019b). Major knowledge gaps include environmental tolerances of key life stages, sources of recruitment, population linkages, critical ecological (e.g., predator–prey interactions) or phenological relationships and projected responses to lowered pH (Fleming et al., 2014; Fogarty et al., 2019).

Black-browed albatrosses breeding on Macquarie Island may be more vulnerable to future climate-driven changes to weather patterns in the Southern Ocean and potential latitudinal shifts in the sub-Antarctic Front (Cleeland et al., 2019). New Zealand coastal ecosystems face risks from sea level rise (SLR) and extreme weather events (MfE, 2020a).

Nutrient availability and productivity in the sub-tropical waters of New Zealand are projected to decline due to increased SST and strengthening of the thermocline, but they may increase in sub-Antarctic waters, potentially bringing some benefit to fish and other species (low confidence) (Law et al., 2018b). For New Zealand waters as a whole, declines in net primary productivity of 1.2% and 4.5% are projected under RCP4.5 and RCP8.5 respectively by 2100, and declines in the primary production of surface waters by an average 6% from the present day under RCP8.5, with sub-tropical waters experiencing the largest decline (Tait et al., 2016).

The pH of surface waters around New Zealand is projected to decline by 0.33 under RCP 8.5 by 2090 (Tait et al., 2016), and the depth at which carbonate dissolves is projected to be significantly shallower (Mikaloff-Fletcher et al., 2017), affecting the distribution of some species of calcifying cold water corals (medium confidence) (Law et al., 2016). However, model projections suggest that the top of the Chatham Rise may provide temporary refugia for scleractinian stony corals from ocean acidification because the Chatham Rise sits above the aragonite saturation horizon (Anderson et al., 2015; Bostock et al., 2015). For sub-tropical corals, skeletal formation will be vulnerable to the changes in ocean pH, with implications for their longer-term growth and resilience (Foster et al., 2015).

Climate change adaptation opportunities and pathways have been identified across aquaculture, fisheries, conservation and tourism sectors in the region (MacDiarmid et al., 2013; Fleming et al., 2014; MPI, 2015; Jennings et al., 2016; MfE, 2016; Royal Society Te Apārangi, 2017; Ling and Hobday, 2019), and some stakeholders are already autonomously adapting (Pecl et al., 2019). Some fishing and aquaculture industries use seasonal forecasts of environmental conditions to improve decision-making, risk management and business planning (Hobday et al., 2016), with the potential to use 5-yearly forecasts similarly (Champion et al., 2019). Shifts in the distribution and availability of target species (e.g., oceanic tuna) would impact the ability of domestic fishing vessels to continue current fishing practices, with potential social and economic adjustment costs (Dell et al., 2015), including disruption to supply chains (Fleming et al., 2014; Plagányi et al., 2014) (Cross-Chapter Box MOVING SPECIES in Chapter 5). Species abundance data are insufficient to enable projections of climate impacts on fishery productivity. However, fishery and aquaculture industries are considering adaptation strategies, such as changing harvests and relocating farms (Pinkerton, 2017). Thus, while climate change is extremely likely to affect the abundance and distribution of marine species around New Zealand, insufficient monitoring means there is limited evidence of ecosystem level change in biodiversity to date and no quantitative projections of which species may win and lose to climate change (Table 11.6) (Law et al., 2018a; Law et al., 2018b).

Streamflow has generally increased in northern Australia and decreased in southern Australia since the mid-1970s (high confidence) (Zhang et al., 2016). Declining river flows since the mid-1970s in southwest Australia have led to changed water management (WA Government, 2012; WA Government, 2016). The large decline in river flows during the so-called 1997–2009 Millennium drought in southeast Australia resulted in low irrigation water allocations, severe water restrictions and major environmental impacts (Potter et al., 2010; Chiew and Prosser, 2011; Leblanc et al., 2012; van Dijk et al., 2013). The drying in southern Australia highlighted the need for hydrological models that adequately account for climate change (Vaze et al., 2010; Chiew et al., 2014; Saft et al., 2016; Fowler et al., 2018). The decline in streamflow was largely due to the decline in cool-season rainfall (which has been partly attributed to climate change) (Figure 11.2) (Timbal and Hendon, 2011; Post et al., 2014; Hope et al., 2017; DELWP, 2020), when most of the runoff in southern Australia occurs.

In New Zealand, precipitation has generally decreased in the north and increased in the southwest (Figure 11.2) (Harrington et al., 2014), but it is difficult to ascertain trends in the relatively short streamflow records. Glaciers in New Zealand’s southern alps have lost one third of their mass since 1977 (Mackintosh et al., 2017; Salinger et al., 2019b), and glacier mass loss in 2018 was at least 10 times more likely to occur with anthropogenic forcing than without (Vargo et al., 2020).

Projections indicate that future runoff in southeast and southwest Australia are likely to decline (median estimates of 20% and 50% respectively under 2.2°C global average warming) (Figure 11.3) (Chiew et al., 2017; Zheng et al., 2019). These projections are broadly similar to those reported previously and in AR5 (Teng et al., 2012; Reisinger et al., 2014). The range of estimates arises mainly from the uncertainty in projected future precipitation (Table 11.2a).

The runoff decline in southern Australia is projected to be further accentuated by higher temperature and potential evapotranspiration (Potter and Chiew, 2011; Chiew et al., 2014), transpiration from tree regrowth following more frequent and severe wildfires (Brookhouse et al., 2013) (Box 11.1), interceptions from farm dams (Fowler et al., 2015) and reduced surface–groundwater connectivity (limiting groundwater discharge to rivers) in long dry spells (high confidence) (Petrone et al., 2010; Hughes et al., 2012; Chiew et al., 2014). In the longer term, runoff will also be affected by changes in vegetation and surface–atmosphere feedback in a warmer and higher CO2 environment, but the impact is uncertain because of the complex interactions, including changes in climate inputs, fire patterns (Box 11.1) and nutrient availability (Raupach et al., 2013; Ukkola et al., 2016; Cheng et al., 2017).

Climate change is projected to affect groundwater recharge and the relationship between surface waters and aquifers and through rising sea levels where groundwater has a tidal signature (PCE, 2015; MfE, 2017a). Groundwater recharge across southern Australia has decreased in recent decades (Fu et al., 2019), and this trend is expected to continue (high confidence) (Barron et al., 2011; Crosbie et al., 2013). Climate change is also projected to impact water quality in rivers and water bodies, particularly through higher temperature and low flows (Jöhnk et al., 2008) (Box 11.5) and increased sediment and nutrient load following wildfires (high confidence) (Biswas et al., 2021) (Box 11.1) and floods (Box 11.4).

The projected changes in river flows in New Zealand are consistent with the precipitation projections (Table 11.2), with increases in the west and south of the South Island and decreases in the east and north of the North Island (Figure 11.4). In the South Island, the runoff increase occurs mainly in winter due to increasing moisture-bearing westerly airflow, with more precipitation falling as rain and snow melting earlier. In the North Island, the runoff decrease occurs in spring and summer (Caruso et al., 2017; Collins et al., 2018a; Jobst et al., 2018; D. Collins, 2020).

In Australia, prolonged droughts and projections of a drier future have accelerated policy and management change in urban and rural water systems. Adaptation initiatives and mechanisms, like significant government investment to enhance the Bureau of Meteorology online water information (Vertessy, 2013; BoM, 2016), funding to improve agricultural water use and irrigation efficiency (Koech and Langat, 2018), enhanced supply through inter-basin transfers and upgrading water infrastructure and an active water trading market (Wheeler et al., 2013; Kirby et al., 2014; Grafton et al., 2016) are helping to buffer regional systems against droughts and facilitating some adaptation to climate change (medium confidence). However, these measures could also be maladaptive because they may perpetuate unsustainable water and land uses under ongoing climate change (Boxes 11.3 and 11.5).

The widespread 2017–2019 drought across eastern Australia (BoM, 2021b) has led to the Australian government establishing a Future Drought Fund (Australian Government, 2019) to enhance drought resilience and a National Water Grid Authority to develop regional water infrastructure to support agriculture. Nevertheless, the ability to adapt to climate change is compounded by uncertainties in future water projections, complex interactions between science, policy, community values and political voice, and competition between different sectors dependent on water (Boxes 11.3 and 11.5). The impact of declining water resources on agricultural, ecosystems and communities in southeastern Australia would escalate with ongoing climate change (medium confidence) (Hart, 2016; Moyle et al., 2017), highlighting the importance of more ambitious, anticipatory, participatory and integrated adaptation responses (Bettini et al., 2015; Abel et al., 2016; Marshall and Lobry de Bruyn, 2021).

Altered water regimes resulting from the combined effects of climatic conditions and water policies carry uneven and far-reaching implications for communities (high confidence). Acting on Indigenous Peoples’ claims to cultural flows (to maintain their connections with their country) is increasingly recognised as an important water management and social justice issue (Taylor et al., 2017; Hartwig et al., 2018; Jackson, 2018; Jackson and Moggridge, 2019; Moggridge et al., 2019). Compounding stressors, such as coal and coal seam gas developments, can also severely impact local communities, water catchments and water-dependent ecosystems and assets, exacerbating their vulnerability to climate change (Navi et al., 2015; Tan et al., 2015; Chiew et al., 2018).

In Australian capital cities and regional centres, water planning has focused on securing new supplies that are resilient to climate change. This includes increasing use of stormwater and sewage recycling and managed aquifer recharge (Bekele et al., 2018; Page et al., 2018; Gonzalez et al., 2020). All major coastal Australian cities have desalination plants. Household scale adaptation, like rainwater harvesting, water-smart gardens, dual flush toilets, water-efficient showerheads and voluntary residential use targets, can help reduce water demand by up to 40% (Shearer, 2011; Rhodes et al., 2012; Moglia et al., 2018). Water utilities across Australia have established climate change adaptation guidelines (WSAA, 2016). Coordinated efforts to reduce demand, design and retrofit infrastructure to reduce flood risk and harvest water and to practice water-sensitive urban design are evident (WSAA, 2016; Kunapo et al., 2018; Rogers et al., 2020b). Transitioning centralised water systems to a more sustainable basis represents adaptation progress but is complex and faces many barriers and limits (medium confidence) (Morgan et al., 2020). Developing multiple redundant or decentralised systems can enhance community resilience and promote autonomous adaptations that may be more sustainable and cost effective in the longer term (Mankad and Tapsuwan, 2011; WSAA, 2016; Iwanaga et al., 2020).

In New Zealand, many water supplies are at risk from drought, extreme rainfall events and sea level rise (SLR), exacerbated by underinvestment in existing water infrastructure (in part due to funding constraints) and urban densification (high confidence) (CCATWG, 2017; MfE and Stats NZ, 2021 ). Lessons can be learned from global experience (e.g., Cape Town, South Africa; Section 4.3.4). Water quality has diminished, with hotter conditions and drought causing algal blooms, combined with intensification of agricultural land uses in some areas, and heavy rainfall and sea level rise (SLR) causing flooding and sedimentation of water sources and health impacts (11.3.6; Box 11.5). Some towns are only partially metered or not metered at all, which exacerbates the adaptation challenge (Hendy et al., 2018; WaterNz, 2018; Paulik 2019a). Unregulated or absent water supplies accentuate risks to vulnerable groups of people (MfE, 2020b). Māori view water as the essence of all life, which makes any impacts on water a governance and stewardship concern, and increasingly, the subject of legal claims (MfE, 2020a; MfE, 2020b; MfE, 2020c) (11.4.2). Māori understanding of time can also open up new spaces for rethinking freshwater management in a climate change context that does not reinforce or rearticulate multiple environmental injustices (Parsons et al., 2021).

Water resource adaptation in New Zealand is variable across local government and water authorities but they all actively monitor water availability, demand and quality, and most have drought management plans. The 2019/2020 drought led to water shortages in the most populated areas of Waikato, Auckland and Northland, resulting in water reduction advisories and 5 to 8 weeks’ waiting time for water tank refills and water rationing. The Havelock North water supply contamination, which arose after an extreme rainfall event (DIA, 2017a; DIA, 2017b), was exacerbated by fragmented governance and led to passage of the Taumata Arawai-Water Services Regulator Act of 2020 and the Water Services Bill of 2020 aimed at the protection of source water. The 2017 update to the National Policy Statement for Freshwater Management contains guidelines for implementation at the regional level (MfE, 2017b), including consideration of climate change, which creates opportunities for adaptation. However, there remain tensions between land, water and people which are exacerbated by climate changes and have yet to be addressed (Box 11.5). The first National Adaptation Plan and the Resource Management law reform have the potential to help resolve these tensions (11.7.1) (CCATWG, 2017; MfE, 2020a).

Table 11.7 | Cities, settlements and infrastructure: key risks and adaptation options.

Notes:

(a) Water supply safety and security and exposure of buildings have been identified as the most significant risks for New Zealand in terms of urgency and consequence (MfE, 2020a). No such ranking of risk has been done for Australia.

Critical infrastructure, cities and settlements are being increasingly affected by chronic and acute climate hazards, including heat, drought, fire, pluvial and fluvial flooding and sea level rise (SLR), with consequent effects on many sectors (high confidence) (Instone et al., 2014; Loughnan et al., 2015; Zografos et al., 2016; Hughes et al., 2021). Risks and impacts vary with physical characteristics, location, connectivity and socioeconomic status of settlements because of the ways these influence exposure and vulnerability (high confidence) (Loughnan et al., 2013; MfE, 2020a).

Weather-related disasters are causing significant disruption and damage (Paulik et al., 2019a; CSIRO, 2020; Paulik et al., 2020). In Australia, during 1987–2016, natural disasters caused an estimated 971 deaths and 4370 injuries, 24,120 people were made homeless and about 9 million people were affected (Deloitte, 2017a). More than 50% of these deaths and injuries came from heatwaves in cities and 22% from fires. During the 2007–2016 period, Australia natural disaster costs averaged AUD$18.2 billion yr −1, with the largest contributions from floods (AUD$8.8 billion), followed by cyclones (AUD$3.1 billion), hail (AUD$2.9 billion), storms (AUD$2.3 billion) and fires (AUD$1.1 billion) (Deloitte, 2017a). The Australian fires in 2019–2020 cost over AUD$8 billion, with devastating impacts on settlements and infrastructure (Box 11.1)

Sea level rise affects many interdependent systems in cities and settlements, which increases the potential for compounding and cascading impacts (11.5.1). Seaports, airports, water treatment plants, desalination plants, roads and railways are increasingly exposed to sea level rise (SLR) (very high confidence), impacting their longevity and levels of service and maintenance (high confidence) (McEvoy and Mullett, 2014; Woodroffe et al., 2014; PCE, 2015; Ranasinghe, 2016; Newton et al., 2018; Paulik et al., 2020) (Box 11.6). Compounding coastal hazards in New Zealand, such as elevated water tables associated with rising sea level and intense rainfall (Morgan and Werner, 2015; McBride et al., 2016; White et al., 2017; Hughes et al., 2021), are exerting pressure on stormwater and wastewater infrastructure and drinking water supply and quality (MfE, 2020a).

Extreme heat events exacerbate problems for vulnerable people and infrastructure in urban Australia, where urban heat is superimposed upon regional warming, and there are adverse impacts for population and vegetation health, particularly for socioeconomically disadvantaged groups (Tapper et al., 2014; Heaviside et al., 2017; Filho et al., 2018; Gebert et al., 2018; Rogers et al., 2018; Longden, 2019; Marchionni et al., 2019; Tapper, 2021) (11.3.6), energy demand, energy supply and infrastructure (very high confidence) (Newton et al., 2018) (11.3.10). Extreme heat is increasingly threatening liveability in some rural areas in Australia (Turton, 2017), particularly given their reliance on outside physical work and older populations. Settlement design and the level of greening interact with climate change to influence local heating levels (Tapper et al., 2014; Wong et al., 2020; Tapper, 2021).

Floods cause major damage. The floods of early 2019 in North Queensland cost AUD$5.68 billion (Deloitte, 2019), while Cyclone Yasi and the Queensland floods of 2011 cost A$6.9 billion (Deloitte, 2016). Floodplains in New Zealand have considerably higher overall national exposure of buildings and population than coasts (Paulik et al., 2019a) (Box 11.4). The insured losses from the 12 costliest floods in New Zealand from 2007 to 2017 totalled NZD$471.56 million, of which NZD$140.48 million could be attributed to climate change (Frame et al., 2020).

Climatic extremes are exacerbating existing vulnerabilities (high confidence). Long supply chains, poorly maintained infrastructure, social disadvantage and poor health and lack of skilled workers (Eldridge and Beecham, 2018; Mathew et al., 2018; Rolfe et al., 2020) are contributing to serious stress and disruption (Smith and Lawrence, 2014; Kiem et al., 2016). In many rural settlements, population ageing and reliance on an overstretched volunteer base for recovery from extreme events are increasing vulnerability to climate change (Astill and Miller, 2018; Davies et al., 2018). Recovery from long, intense, more frequent and compounding climatic events in rural areas has been disrupted by the erosion of natural, financial, built, human and social capital (De et al., 2016; Sheng and Xu, 2019). Delayed recovery from extreme climatic events has been compounded by long-term displacement, which in turn prolongs the impacts (Matthews et al., 2019). Severe droughts have contributed to poor health outcomes for rural communities, including extreme stress and suicide (Beautrais, 2018; Perceval et al., 2019). In Australia, competition among water users has left some rural communities experiencing extreme water shortage and insecurity with associated health impacts (Wheeler et al., 2018; Judd, 2019) (Box 11.3).

Changes in heat waves, droughts, fire weather, heavy rainfall, storms and sea level rise (SLR) are projected to increase negative impacts for cities, settlements and infrastructure (high confidence) (Table 11.3a, Table 11.3b; Box 11.1, Box 11.3, Box 11.4).

Increased floods, coastal inundation (assuming a sea level rise (SLR) of 1.6 m by 2100), wildfires, windstorms and heatwaves may cause property damage in Australia estimated at AUD$91 billion per year by 2050 and AUD$117 billion per year by 2100 for RCP8.5, while damage-related loss of property value is estimated at AUD$611 billion by 2050 and AUD$770 billion by 2100 for RCP8.5 (Steffen et al., 2019). For a 1.0-m sea level rise (SLR), the value of exposed assets in New Zealand would be NZD$25.5 billion (Box 11.6). For a 1.1-m sea level rise (SLR), the value of exposed assets in Australia would be AUD$164–226 billion (Box 11.6). These exposure estimates exclude impacts on personal livelihood, well-being and lifestyle.

Extreme heat risks are projected to exacerbate existing heat-related impacts on human health, vegetation and infrastructure (Tapper et al., 2014; Tapper, 2021) (11.3.6). In Australia, the annual frequency of days over 35°C is projected to increase 20–70% by 2030 (RCP4.5), and 25–85% (RCP2.6) to 80–350% (RCP8.5) by 2090 (Table 11.3a). For example, Perth may average 36 d over 35°C by 2030 (RCP4.5). In New Zealand, the annual frequency of days over 25°C may increase 20–60% (RCP2.6) to 50–100% (RCP8.5) by 2040 and 20–60% (RCP2.6) to 130–350% (RCP8.5) by 2090 (Table 11.3b). For example, Auckland may average 39 d over 25°C by 2040 (RCP8.5). Unprecedented extreme temperatures, as high as 50°C in Sydney or Melbourne, could occur with global warming of 2.0°C (Lewis et al., 2017). Heat-related costs for Melbourne during 2012–2051 are estimated at AUD$1.9 billion, of which AUD$1.6 billion is human health/mortality costs (AECOM, 2012). Extreme heat is threatening liveability in some rural areas in Australia (Turton, 2017), particularly given their reliance on outside physical work and older populations.

Key infrastructure and services face major challenges. Structural metal corrosion rates are projected to increase significantly at coastal locations but decrease inland (Trivedi et al., 2014). A drier climate may decrease the rate of deterioration of road pavements, but extreme rainfall events and heat pose a significant risk (Taylor and Philp, 2015), especially to unsealed roads in northern Australia (CoA, 2015). Critical infrastructure on coasts is at risk from sea level rise (SLR) and storm surges (Box 11.6). Facilities such as hospitals face weather-related hazards exacerbated by climate change and not originally anticipated in building and infrastructure design (Loosemore et al., 2011; Loosemore et al., 2014). By 2050, increased risks are projected for the availability and quality of potable water supplies, delivery of wastewater and stormwater services to communities, transport systems, electricity infrastructure, operating municipal landfills and contaminated sites located near rivers and the coast (Gilpin et al., 2020; MfE, 2020a; Hughes et al., 2021). These then create risks to social cohesion and community well-being from displacement of individuals, families and communities, with inequitable outcomes for vulnerable groups (Boston and Lawrence, 2018).

In cities and settlements, climate adaptation is under way and is being led and facilitated by state and local government leadership and facilitation, particularly in Australia (high confidence) (Hintz et al., 2018; Newton et al., 2018) (Table 11.7, Supplementary Material Table SM11.1a).

Effective adaptations to urban heat include spatial planning, expanding tree canopy and greenery, shading, sprays and heat-resistant and energy-efficient building design, including cool materials and reflective or green roofs (very high confidence) (Broadbent et al., 2018; Jacobs et al., 2018b; Haddad et al., 2019; Haddad et al., 2020a; Yenneti et al., 2020; Bartesaghi-Koc et al., 2021; Tapper, 2021). Reducing urban heat not only benefits human health but reduces the demand for, and cost of, air conditioning (Haddad et al., 2020b) and the risk of electricity blackouts (11.3.10).

Adaptation progress is being hampered by current urban redevelopment practice and statutory planning guidelines that are leading to the removal of critical urban green space (Newton and Rogers, 2020). Reform of approaches to urban redevelopment would facilitate adaptation (Newton and Rogers, 2020). Several cities in Australia and New Zealand are part of the 100 Resilient Cities global network, which helped facilitate the metropolitan Melbourne Urban Forest Strategy across councils (Fastenrath et al., 2019; Coenen et al., 2020), and in New Zealand, restoration of the urban forest in Hamilton is reducing heat stressors (Wallace and Clarkson, 2019). In peri-urban zones, adapting to fire risk is a contested issue, raising difficult trade-offs between heat management, ecological values and fuel reduction in treed landscapes (Robinson et al., 2018).

The resilience of Australia’s major cities to flooding and drought has been advanced through a range of economic and physical interventions. Water-sensitive urban design irrigates vegetation with harvested storm water that improves water security, flood risk, carbon sequestration, biodiversity and air and water quality and delivers cooling that can save human lives in heatwaves (Wong et al., 2020). Stormwater harvesting is supported by some councils in New Zealand and can deliver recycled water for households (Attwater and Derry, 2017), improving climate resilience and reducing water demand (White et al., 2017). Addressing infrastructure vulnerability is essential given the long lifetime of assets, criticality of services and high costs of maintenance (Chester et al., 2020; Hughes et al., 2021).

Climate risk management is evolving, but adaptive capacity, implementation, monitoring and evaluation are uneven across all scales of cities, settlements and infrastructure (very high confidence) (Table 11.15a and Table 11.15b; Supplementary Material Tables SM11.1a and SM11.1b) . There is increasing awareness of the need to move from incremental coping and defensive coastal strategies (Jongejan et al., 2016) to transformational adaptation, for example managed retreat (Torabi et al., 2018; Hanna, 2019), and to consider the flow-on effects (e.g., for housing and employment) (Fatorić et al., 2017; Torabi et al., 2018). Strategies limited to building household and community self-reliance (Astill and Miller, 2018) are increasingly inadequate given systemic and interconnected stressors and cascading impacts across interdependent systems (Lawrence et al., 2020b). Integrated approaches to climate change adaptation and emissions reduction have potential for addressing interdependent systems (e.g., nature-based approaches, climate-sensitive urban design, energy and transport systems) (Norman et al., 2021). Climate risk assessment and adaptation guidelines have been prepared for transport infrastructure authorities and organisations (Finlayson et al., 2017; Byett et al., 2019; Yenneti et al., 2020).

Infrastructure service vulnerability in New Zealand is supported by new institutional adaptations including the Infrastructure Commission to develop a 30-year national infrastructure strategy. The Climate Change Commission (Climate Change Commission, 2020) has issued six principles for climate-relevant infrastructure investments and is mandated to monitor the National Climate Change Adaptation Plan based on the first National Climate Change Risk Assessment (MfE, 2020a). A National Disaster Resilience Strategy addresses integrated planning for risk reduction and awareness-raising in New Zealand (Department of the Prime Minister and Cabinet, 2019).

Successive inquiries and reviews highlight potential synergies between disaster risk management and climate resilience (11.5.1) (Smith and Lawrence, 2018; Ruane, 2020). In Australia, there is a National Disaster Risk Reduction Framework (CoA, 2018b) and a National Recovery and Resilience Agency (CoA, 2021) that help underpin the development of national support systems for rural and regional emergency management and associated volunteer sectors (McLennan et al., 2016) and wildfire smoke impacts (CoA, 2020e). The National Heatwave Framework Working Group uses a Heatwave Forecast Service, and heatwave early-warning and adaptation systems that operate in Adelaide, Melbourne, Sydney and Brisbane have reduced potential death rates (Nitschke et al., 2016).

Infrastructure planning is lagging behind international standards for climate resilience evaluation and guidance for adaptation to climate risk (high confidence) (CSIRO, 2020; Kool et al., 2020; Hughes et al., 2021). Some companies have examined their exposure to climate risk and developed strategies to minimise their vulnerability (Climate Institute, 2012) (11.3.8). Climate risk assessments have been conducted for the electricity sector in both Australia and New Zealand (11.3.10). Climate change is considered in Australian infrastructure plans for national and regional water supply security, water for irrigated agriculture, a coastal hazards adaptation strategy and the Tanami Road upgrade (Infrastructure Australia, 2016; Infrastructure Australia, 2019; Infrastructure Australia, 2021)

Industry associations are beginning to facilitate climate adaptation for infrastructure, including the Australian Green Infrastructure Council (CoA, 2015), the Green Building Council of Australia Green Star Programme (GBCA, 2020), the Water Services Association of Australia, Climate Change Adaptation Guidelines (WSAA, 2016) and the Australian Sustainable Built Environment Council Built Environment Adaptation Framework (ASBEC, 2012). The Infrastructure Sustainability Rating Scheme measures the social, environmental, governance and cultural outcomes delivered by more than AUD$160 billion worth of infrastructure, and it is projected to deliver a cost-benefit ratio of 1:1.6 to 1:2.4 during the period 2020–2040 (RPS, 2020). There is scope for engagement of industry in transitioning to a low-carbon green economy that is adapted to climate change, but less certainty on how to develop appropriate business cases (Newton and Newman, 2015).

There are tensions between settlement-scale adaptation options, such as managed retreat, that focus on the long term and people’s values, place attachments, needs and capacities (Gorddard et al., 2016; Fatorić et al., 2017; Graham et al., 2018; O’Donnell, 2019; Norman et al., 2021). Tensions also exist between climate change adaptation and mitigation goals (e.g., current energy efficiency standards in Australian buildings can worsen their heat resistance and increase dependence on air-conditioning) (Hatvani-Kovacs et al., 2018). Where there is a lack of coordination between jurisdictions, there can be flow-on effects from failure to adapt, for example in coastal local government areas (Dedekorkut-Howes et al., 2020) (Box 11.6). There is limited information across the region on climate change impacts and adaptation options for telecommunications (NCCARF, 2013) (Table 11.7). There is an emerging recognition that implementing and evaluating the adaptation process (vulnerability and risk assessments, identification of options, planning, implementation, monitoring, evaluation and review) in local contexts can advance more effective adaptation (Moloney and McClaren, 2018). For example, the Victorian state government has built monitoring, evaluation and adaptation components into its adaptation plan (Table 11.15a).

There is ample evidence of health loss due to extreme weather in Australia and New Zealand, and rising temperatures, changing rainfall patterns and increasing fire weather have been attributed to anthropogenic climate change (11.2.1). Extreme heat leads to excess deaths and increased rates of many illnesses (Hales et al., 2000; Nitschke et al., 2011; Lu et al., 2020). Between 1991 and 2011 it is estimated that 35–36% of heat-related mortality in Brisbane, Sydney and Melbourne was attributable to climate change, amounting to about 106 deaths a year on average over the study period (Vicedo-Cabrera et al., 2021). Exposure to high temperatures at work is common in Australia, and the health consequences may include more accidents, acute heat stroke and chronic disease (Kjellstrom et al., 2016). Long-term rise in temperatures is changing the balance of summer and winter mortality in Australia (Hanigan et al., 2021). The Black Summer wildfires in Australia in 2019/2020 (Box 11.1) caused 33 deaths directly (Davey and Sarre, 2020) and exposed millions of people to heavy particulate pollution (Vardoulakis et al., 2020). In the Australian states most heavily affected by the fires, 417 deaths, 3151 hospital admissions for cardiovascular or respiratory conditions and about 1300 emergency department presentations for asthma are attributed to wildfire smoke exposure (Borchers Arriagada et al., 2020). Immediate smoke-related health costs from the 2019–2020 fires are estimated at AUD$1.95 billion (Johnston et al., 2020).

Extreme heat is associated with decreased mental well-being, more marked in women than men (Ding et al., 2016). Changing climatic patterns in western Australia have undermined farmers’ sense of identity and place, heightened anxiety and increased self-perceived risks of depression and suicide (Ellis and Albrecht, 2017). Following the Black Saturday wildfires in Victoria in 2009, 10–15% of the population in the most severely affected areas reported persistent fire-related post-traumatic stress disorder, depression and psychological distress (Bryant et al., 2014). Repeated exposure to the threat of wildfires in Australia, either directly (Box 11.1) or through media coverage (Looi et al., 2020), may compound effects on mental health. In March 2017, 31,000 people in New South Wales and Queensland were displaced by Tropical Cyclone Debbie. Six months post-cyclone, adverse mental health outcomes were more common among those whose access to health and social care was disrupted (King et al., 2020).

Dengue fever remains a threat in northern Australia and variations in rainfall and temperature are related to disease outbreaks and patterns of spread, although most outbreaks are sparked by travellers bringing the virus into the country (Bannister-Tyrrell et al., 2013; Hall et al., 2021). Cases of dengue fever and other arboviral diseases have been increasing among recent arrivals to New Zealand from overseas, but to date there have been no reports of local transmission (Ammar et al., 2021).

In 2016 in New Zealand, it is estimated 6000 to 8000 people became ill due to contamination of the Havelock North water supply with the bacteria Campylobacter (Gilpin et al., 2020). The infection was traced to sheep faeces washed into the underground aquifer that feeds the town’s (untreated) water supply after an extraordinarily heavy rainfall event. This is not an isolated finding: increases in paediatric hospital admissions are seen across New Zealand two days after heavy rainfall events (Lai et al., 2020).

Climate change is projected to have detrimental effects on human health due to heat stress, changing rainfall patterns including floods and drought climate-sensitive air pollution (including that caused by wildfires) (high confidence) and vector-borne diseases (medium confidence). Vulnerability to detrimental effects of climate change will vary with socioeconomic conditions (high confidence).

The greatest number of people affected by compounding effects of heat, wildfires and poor air quality will be in urban and peri-urban areas of Australia. By 2100 the proportion of all deaths attributable to heat in Melbourne, Sydney and Brisbane may rise from about 0.5% to 0.8% (under RCP 2.6), or 3.2% (under RCP 8.5) (Gasparrini et al., 2017). Heatwave related excess deaths in Melbourne, Sydney and Brisbane are projected to increase to 300/year (RCP2.6) or 600/year (RCP8.5) during 2031–2080 relative to 142/year during 1971–2020, assuming no adaptation and high population growth (Guo et al., 2018). High temperatures amplify the risks due to local air pollution: without adaptation, ozone-related deaths in Sydney may increase by 50–60/year by 2070 (Physick et al., 2014).

Unless there is more effective control of nutrient runoff, bacterial contamination of drinking water supplies is projected to increase due to more intense rainfall events, exacerbating risks to human health (Gilpin et al., 2020; Lai et al., 2020), and higher temperatures will increase freshwater toxic blooms (Hamilton et al., 2016).

In general, the area of Australia suitable for the transmission of dengue is projected to increase (Zhang and Beggs, 2018; Messina et al., 2019), but estimates of local disease risk vary considerably according to climate change scenario and socioeconomic pathways (Williams et al., 2016). The spread of Wolbachia among Aedes mosquitoes in northern Australia has already reduced dengue transmission and may decrease the influence of climate in the future (Ryan et al., 2019). In New Zealand, the risk of dengue remains low for the remainder of this century (Messina et al., 2019). Higher temperatures and more intense rainfall may also increase pollen production and the risk of allergic illness throughout the region (Haberle et al., 2014).

Strengthening basic public health services can rapidly reduce vulnerability to death and ill-health caused by climate change; however, this opportunity is often missed (very high confidence). The 2020 New Zealand Health and Disability System Review pointed to shortcomings in leadership and governance, structures that embed health inequity, lack of transparency in planning and reporting and underinvestment in public health personnel and systems (HDSR, 2020). An Australian study found that without deliberate planning the health system ‘would only be able to deal with climate change in an expensive, ad hoc crisis management manner’ (Burton, 2014). In both Australia and New Zealand the COVID-19 epidemic has highlighted weaknesses in information systems, primary care for marginalised groups and intersectoral planning (Salvador-Carulla et al., 2020; Skegg and Hill, 2021): all these deficiencies are relevant to climate adaptation.

Underlying health and economic trends affect the vulnerability of the population to extreme weather (high confidence). Poor housing quality is a risk factor for climate-related health threats (Alam et al., 2016). Homeless people lack access to temperature-controlled or structurally safe housing and often are excluded from disaster preparation and responses (Every, 2016). These inequalities are reversible. For example, a government partnership with social housing providers in Australia improved the thermal performance of housing for low-income tenants (Barnett et al., 2013). A postcode-level analysis of the vulnerability of urban populations to extreme heat in Australian capital cities (Loughnan et al., 2013) led to the development of an interactive website for purposes of planning and emergency preparedness (Figure 11.5) as well as subsequent work on green urban design for cooler, more liveable cities (Tapper, 2021).

Heatwave responses, from public education to formal heat-warning systems, are the best-developed element of adaptation planning for health in Australia, but many metropolitan centres are still not covered (high confidence) (Nicholls et al., 2016; Nitschke et al., 2016). Air conditioning (AC) in Australian homes reduces mortality in heatwaves by up to 80% (Broome and Smith, 2012), but heavy reliance on AC carries risks. It is estimated that a power outage on the third day of extreme heatwaves would result in an additional 10–21 deaths in Adelaide, 24–47 in Melbourne and 7–13 in Brisbane (Nairn and Williams, 2019). Multiple interventions at the landscape, building and individual scale are available to reduce the negative health effects of extreme heat (Jay et al., 2021).

Heat extremes receive most policy attention, but the numbers of deaths are less than those resulting from more frequent exposures to moderately high temperatures (Longden, 2019). Melbourne, with its Urban Forest Strategy, provides a case study in long-term planning for cooler cities (Gulsrud et al., 2018). Australian workers’ perceptions of heat and responses to high temperatures show that heat policies on their own are insufficient for full protection; workers also require knowledge and agency to slow down or take breaks on their own initiative (Singh et al., 2015; Lao et al., 2016).

The first national climate change risk assessment in New Zealand (MfE, 2020a) highlighted the risk to potable water supplies. An inquiry into the Havelock North outbreak recommended that all registered drinking water supplies (which supply about 80% of the national population) in New Zealand should be disinfected and have stronger oversight by a national regulatory body (Government Inquiry into Havelock North Drinking Water, 2017). The use of local and Indigenous knowledge strengthens interventions to protect water supplies to remote settlements that may be affected by climatic changes (Henwood et al., 2019).

Adaptation requires better protection of health facilities and supply chains, but hospital managers seldom have capacity to invest in long-term improvements in infrastructure (Loosemore et al., 2014). However, health services in the region are required to prepare disaster plans: these could be expanded to explicitly cover health adaptation and local threats from climate change, including flooding events (Rychetnik et al., 2019).

Tourism is a major economic driver in the region, accounting for 3% (Australia) and 6% (New Zealand) of GDP pre-COVID-19 (WTTC, 2018). Climate change is having significant impacts on tourism due to the heavy reliance of the sector on natural heritage and outdoor attractions (11.3.1; Box 11.2). Furthermore, because Australia and New Zealand are both long-haul destinations, a global increase in ‘flygskam’ (flight shame) will likely impact travel patterns (Becken et al., 2021).

Impacts of climate change are being observed across the tourism system (high confidence) (Scott et al., 2019a), most notably the GBR (Box 11.2) (Ma and Kirilenko, 2019). Australia’s ski industry is very sensitive to climatic change, due to reductions in snow depth and snow season length (Table 11.2) (Steiger et al., 2019; Knowles and Scott, 2020). The 2019–2020 summer wildfires (Box 11.1) impacted tourism and travel infrastructure, affecting air quality, vineyards and wineries (CoA, 2020e; Filkov et al., 2020). Global media coverage of the wildfires, alongside Australia’s climate change policy response, profoundly and negatively, affected Australia’s destination image (Schweinsberg et al., 2020; Wen et al., 2020). In New Zealand’s South Island, Fox and Franz Josef Glaciers have retreated approximately 700 m since 2008, with ice melt and retreat resulting in increased rock fall risks and negatively affecting the tourist experience (Purdie, 2013; Stewart et al., 2016; Wang and Zhou, 2019). The west coast of New Zealand is extremely prone to flooding events, impacting amenity values and access (Paulik et al., 2019a). Damage to tracks, huts and bridges have closed popular destinations, including the Hooker Glacier and the popular Routeburn and Heaphy Tracks during heavy rainfall events (Christie et al., 2020). Climate-driven damage is motivating ‘last chance’ tourism to see key natural heritage and outdoor attractions, for example, GBR (Piggott-McKellar and McNamara, 2016) and Franz Josef and Fox Glaciers (Stewart et al., 2016).

Widespread impacts from projected climate change are very likely across the tourism sector. The World Heritage listed Kakadu National Park in Australia is projected to experience increasing severity of cyclones (Turton, 2014), and sea level rise (SLR) is projected to affect freshwater wetlands (11.3.1.2; Table 11.5) (McInnes et al., 2015) and Indigenous rock art (Higham et al., 2016; Hughes et al., 2018a). The projected increase in the number of hot days in northern and inland Australia may impact the attractiveness of the region for tourists (Amelung and Nicholls, 2014; Webb and Hennessy, 2015). Coastal erosion and flooding of Australasian beaches due to sea level rise (SLR) and intensifying storm activity are estimated to increase by 60% on the Sunshine Coast by 2030, causing significant damage to tourist-related infrastructure (Hughes et al., 2018a). Urgent ‘hard’ and ‘soft’ adaptation strategies are projected to help reduce sea level rise (SLR) impacts (Becken and Wilson, 2016).

Glacier tourism, a multi-million-dollar industry in New Zealand, is potentially under threat because glacier volumes are projected to decrease (very high confidence) (Purdie, 2013). Glacier volume reductions of 50–92% by 2099 relative to the present reflect the large range of temperature projections between RCP2.6 and RCP8.5. Under RCP2.6 at 2099, the glaciers retain a similar configuration to present, although clean-ice glaciers will retreat significantly. For RCP4.5, RCP6.0 and RCP8.5, the clean-ice glaciers will retreat to become small remnants in the high mountains (Anderson et al. 2021).

Snow skiing faces significant challenges from climate change (high confidence). In Australia, the annual maximum snow depth is estimated to decrease from current levels by 15% (2030) and 60% by 2070 (SRES A2) (Di Luca et al., 2018). By 2070–2099, relative to 2000–2010, the length of the Victorian ski season is projected to contract by 65–90% under RCP8.5 (Harris et al., 2016). The New Zealand tourism destination of Queenstown is expected to experience declining snowfall, increased wind and more severe weather events (Becken and Wilson, 2016). Ski tourism stakeholders have been responding to longer-term climate risks with an increase in snow-making machines in New Zealand since 2013 (Hopkins, 2015) and in Australia (Harris et al., 2016).

Current snow-making technologies are expected to sustain the ski industry until mid-century. However, with warmer winter temperatures and declining water availability, snow-making is projected to decrease to half at most resorts by 2030 (Harris et al., 2016). New Zealand’s ski industry may benefit from Australian skiers visiting New Zealand due to lower relative vulnerability (Hopkins, 2015). However, tourists may substitute destinations or ski less in the absence of snow (medium agreement, limited evidence) (Cocolas et al., 2015; Walters and Ruhanen, 2015).

With the exception of the ski industry (Becken, 2013; Hopkins, 2015), tourism stakeholders generally focus on coping with short-term weather events, rather than longer-term climate risks, but they do exhibit high adaptive capacity by diversifying their activities (Stewart et al., 2016). Post-COVID-19 pandemic economics and recovery policies challenge this sector’s prospects, and the combination of COVID-19 and climate change (e.g., fires, floods) has also highlighted the need for the tourism sector to be able to respond to multiple, overlapping crises.

There is limited evidence that research into the impact of climate change on tourism in Australia and New Zealand is translating into policy or action (Moyle et al., 2017). New Zealand government tourism sector strategies acknowledge this and the need for greater understanding of climate change for the sector (TIA, 2019) but do not offer solutions (MBIE, 2019b; MfE, 2020a). The COVID-19 pandemic and the global pause of international travel offer an opportunity to potentially ‘reset’ tourism to account for the impacts of climate change (Prideaux et al., 2020).

The finance sector has significant exposure to climate variability and extreme events (high confidence).

Aggregated insured losses from weather-related hazard events from 2013 to 2020 were almost AUD$15 billion for Australia (1.2% of GDP) and almost NZD$1 billion for New Zealand (0.4% of GDP) (NIWA, 2020; ICA, 2021) (ICA, 2020a; NIWA, 2020). However, there is no trend in normalised losses because the rising insurance costs are being driven by more people living in vulnerable locations with more to lose (McAneney et al., 2019). In New Zealand, two major hailstorms during 2014–2020 and three major floods during 2019–2021 caused significant insurance losses (ICNZ, 2021). Insured losses exceeded NZD$472 million for the 12 costliest floods from 2007 to 2017, of which NZD$140 million could be attributed to anthropogenic climate change (Frame et al., 2020). In Australia, insured damage was almost AUD$1.0 billion for the Queensland hailstorm in 2020, AUD$1.7 billion for east coast flooding in 2020, AUD$2.3 billion for the 2019–2020 fires, AUD$2.3 billion for the Queensland hailstorm in 2019, AUD$1.2 billion for the North Queensland floods in 2019, AUD$1.4 billion for the NSW hailstorm in 2018, AUD$1.8 billion for Cyclone Debbie in 2017 and AUD$1.5 billion for the Brisbane hailstorm in 2014 (ICA, 2020b). The insured loss from the seven costliest hailstorms in Australia from 2014 to 2021 totalled AUD$7.6 billion (ICA, 2021).

Some homes in the highest-risk areas tend to be in lower socioeconomic groups that may not buy insurance (Actuaries Institute, 2020). For example, a quarter of residents that experienced loss or damage in the 2019 Townsville floods did not have insurance (ACCC, 2020). Underinsurance reduces people’s capacity to recover from adverse events, while over-reliance on private insurance undermines collective disaster recovery efforts (Lucas and Booth, 2020). In Australia, those in high-risk areas minimise house and contents insurance for financial reasons (Booth and Harwood, 2016; Osbaldison et al., 2019; Actuaries Institute, 2020). Insurance premiums in northern Australia are almost double those in the rest of Australia, and rising, mainly due to cyclone damage (ACCC, 2020).

Risks for the finance sector are projected to increase (medium confidence). The potential impact of increased coastal and inland flooding, soil desiccation and contraction, fire and wind could lead to higher insurance costs, reduced property values and difficulties for some customers to service loans (CBA, 2018). Under a high-emissions scenario (RCP8.5), estimated annual losses to home-lending customers may increase 27% by 2060, and the proportion of properties with high credit risk may rise from 0.01% in 2020 to 1% in 2060, assuming no portfolio changes (CBA, 2018). In New Zealand, weather-related insurance claims between 2000 and 2017 totalled NZD$450 million, 40% of which was due to extreme rainfall. Using six climate model projections of extreme rainfall, the insured damage is projected to increase by 7% (RCP2.6) to 8% (RCP8.5) by 2020–2040 and 9% (RCP2.6) to 25% (RCP8.5) by 2080–2100, relative to 2000–2017 (Pastor-Paz et al., 2020). By 2050–2070, tropical cyclone risk for properties not in flood plains or storm surge zones in south-east Queensland may increase by 33% under a 2°C scenario and by 317% under a 3°C scenario for properties in flood plains and storm surge zones (IAG, 2019).

Banks, insurers and investors increasingly recognise the risks posed by climate change to their businesses (high confidence) (Paddam and Wong, 2017). Collaborations between banks, insurers and superannuation funds in Australia and New Zealand are driving efforts aimed at achieving the Paris Agreement goals, including the New Zealand Centre for Sustainable Finance and Australian Sustainable Finance Initiative (AFSI, 2020; TAO, 2020; NZCFSF, 2021). Company directors, including superannuation fund directors, have legal obligations to disclose and appropriately manage material financial risks (Barker et al., 2016; Hutley and Davis, 2019). Financial regulators are aware of climate risks for financial stability and financial institutions (RBNZ, 2018; RBA, 2019) and are closely supervising climate risk disclosure practices (TCFD, 2017; RBNZ, 2018; APRA, 2019; CMSI, 2020; IGCC, 2021b). In Australia, regulatory action (APRA, 2021) includes issuing prudential guidelines for financial institutions on managing climate risk, aligned with guidelines developed by the Climate Measurement Standards Initiative (NESP ESCC, 2020). In New Zealand, the financial sector (climate-related disclosure and other matters) amendment bill aims to ensure that the effects of climate change are routinely considered in business, investment, lending and insurance underwriting decisions (NZ Government, 2021).

Banks and insurers are beginning to undertake climate risk analyses (CRO Forum, 2019; Bruyère et al., 2020) and disclose their risks (Paddam and Wong, 2017; ANZ, 2018; CBA, 2018). For example, the agricultural banking sector has analysed climate risk and embedded climate adaptation financing into its risk scoring and lending practices (CBA, 2019). However, the overall number of disclosures continues to lag expectations, suggesting the need for mandatory climate risk disclosure in Australia (IGCC, 2021a).

Climate adaptation finance is not evident (medium confidence). There is an adaptation finance gap (Mortimer et al. 2020). Private sector initiatives are beginning to emerge through large scale projects or public–private partnerships, such as the Queensland Betterment Fund (Banhalmi-Zakar et al., 2016; Ware and Banhalmi-Zakar, 2020). Addressing investor pressure (IGCC, 2017) could increase investment in adaptation. However, ongoing policy uncertainty in Australia continues to be the key barrier to allocating additional capital to invest in climate solutions for 70% of investors (IGCC, 2021a).

Current and future insurance affordability pressures could be addressed by increased mitigation, revisions to building codes and standards and better land use planning (ACCC, 2020; Actuaries Institute, 2020). In New Zealand, insurance signals are motivating the government to address adaptation funding mechanisms (Boston and Lawrence, 2018; CCATWG, 2018). Some insurers offer premium discounts to customers with reduced risk (Drill et al., 2016), with increasing premiums reflecting known risk and no cover for some hazards in risky locations (CCATWG, 2017). Special excess payments are available for flood hazard so customers take responsibility for part of the claim, with increasing premiums to reflect known and foreseeable risk and downgrading cover from replacement value to market value (Bruyère et al., 2020). Retreat by private insurers from risky locations could increase the unfunded fiscal risk to the government (Storey and Noy, 2017), creating moral hazard (Boston and Lawrence, 2018). The litigation risk from failing to take adaptation action (Hodder, 2019) could affect financial markets and government policy settings, creating cascading impacts across society (Lawrence et al., 2020b) CRO Forum, 2019). For some climate risks, national governments act as ‘last resort’ insurers (CCATWG, 2017), but this could become unsustainable (CRO Forum, 2019).

The energy sector is highly vulnerable to climate change (high confidence). Oil and gas systems are vulnerable to storms, fires, drought, floods, sea level rise (SLR), extreme heat and fires, which can damage infrastructure, slow production and add to operational costs (Smith, 2013). The electricity system is vulnerable to high temperatures reducing generator and network capacity and increasing failure rates and maintenance costs (AEMO, 2020a). Fires (including those sparked by electrical distribution lines) pose risks to assets. Smoke can cause electricity transmission to trip, and high winds reduce wind-energy capacity and threaten the integrity of transmission lines. Low rainfall reduces hydro-energy capacity and increases the demand for desalination energy. Higher sea level may affect some low-lying generation, distribution and transmission assets, and compound extreme weather events can cause outages (Vose and Applequist, 2014; Lawrence et al., 2016; AEMO, 2020b; AEMO, 2020a; ESCI, 2021). For example, in September 2016, a major windstorm in South Australia damaged 23 transmission towers and cut power to over 900,000 households. In February 2017, the South Australian energy system failed to cope with a heatwave-related jump in demand, causing power cuts to 40,000 homes (Steffen et al., 2017). In April 2018, a storm over Auckland, New Zealand left 182,000 properties without power (Bell, 2018). The 2019/2020 Australian heatwaves and fires caused widespread blackouts that disrupted communications, transport and emergency response capacity (Box 11.1).

Risks for the energy sector are projected to increase with climate change (medium confidence). Projected increases in the frequency and intensity of heatwaves, fires, droughts and wind-storms would increase risks for energy supply and demand (AEMO, 2020b; ESCI, 2021). Households are unevenly vulnerable to energy sector risks due to varying housing quality and health dependencies (11.3.6). In New Zealand, a warmer climate and increasing energy efficiency is projected to marginally reduce annual average peak electricity heating demand (Stroombergen et al., 2006; MBIE, 2019a). Winter and spring inflows to main hydro lakes are projected to increase 5–10% and may reduce hydroelectric energy vulnerability (McKerchar and Mullan, 2004; Poyck et al., 2011; Stevenson et al., 2018). However, major electricity supply disruptions are projected to increase as dependence on electricity grows from 25% of total energy in 2016 to 58% in 2050 (Transpower, 2020).

In Australia, the total heating and cooling energy demand of 5-star energy-rated houses is projected to change by 2100 (Wang et al., 2010). At 2°C global warming, the estimated change in demand is −27% in Hobart, −21% in Melbourne, +61% in Darwin, +67% in Alice Springs and +112% in Sydney. For a 4°C global warming, the changes are −48%, −14%, +135%, +213% and +350% respectively.

Options to manage risks include adaptation of energy markets, integrated planning, improved asset design standards, smart-grid technologies, energy generation diversification, distributed generation (e.g., roof-top solar, microgrids), energy efficiency, demand management, pumped hydro storage, battery storage and improved capacity to respond to supply deficits and balance variable energy resources across the network (Table 11.8) (high confidence). With increasing electrification, diversification and resilience can contribute to security of supply as fossil fuels are retired from the energy mix (AEMO, 2020b). In Australia, the AEMO (2020) Integrated System Plan has evaluated various options, costs and benefits. Risks associated with an increasing reliance on weather-dependent renewable energy (e.g., solar, wind, hydro) (ESCI, 2021) can be managed through strong long-distance interconnection via high-voltage powerlines and storage (Blakers et al., 2017; Blakers et al., 2021; Lu et al., 2021). However, implementation of adaptation options remains inadequate (Gasbarro et al., 2016).

Table 11.8 | Adaptation options for energy sector.

Climate impacts are cascading, compounding and aggregating across sectors and systems due to complex interactions (high confidence) (Pescaroli and Alexander, 2016; Challinor et al., 2018; Zscheischler et al., 2018; Steffen et al., 2019; AghaKouchak et al., 2020; CoA, 2020e; Lawrence et al., 2020b; Simpson et al., 2021) (Boxes 11.1, 11.3, 11.4, 11.5 and 11.6). Cascading impacts propagate via interconnections and systemic factors, including supply chains, shared reliance on connected biophysical systems (e.g., water catchments and ecosystems), infrastructure, essential goods and services and the exercise of governance, leadership, regulation, resources and standard practices (e.g., in planning and building codes), including lock-in of past decisions and experience (CSIRO, 2018; Lawrence et al., 2020b). The capacity of critical systems such as information, communication and technology, water infrastructure, health care, electricity and transport networks, is being stretched, with impacts cascading to other systems and places, exacerbating existing hazards and generating new risks (Cradock-Henry, 2017) (11.3.6; 11.3.10; Box 11.1). Temporal or spatial overlap of hazards (e.g., drought, extreme heat and fire; drought followed by extreme rainfall) are compounding impacts (Zscheischler et al., 2018) and affecting multiple sectors.

Extreme events such as heatwaves, droughts, floods, storms and fires have caused deaths and injuries (Deloitte, 2017a) (11.3.5.1), and affected many households, communities and businesses via impacts on ecosystems, critical infrastructure, essential services, food production, the national economy, valued places and employment. This has created long-lasting impacts (e.g., mental health, homelessness, health incidents and reduced health services) (Brown et al., 2017; Brookfield and Fitzgerald, 2018; Rychetnik et al., 2019) and reduced adaptive capacity (Friel et al., 2014; O’Brien et al., 2014; Ding et al., 2015; CoA, 2020e) (Box 11.1, Box 11.3, 11.3.1–11.3.10).

In New Zealand, extreme snow, rainfall and wind events have combined to impact road networks, power and water supplies and have impeded interdependent wastewater and stormwater services and business activities (Deloitte, 2019; Lawrence et al., 2020b; MfE, 2020a) (Box 11.4). Community and infrastructure services are periodically disrupted during extreme weather events, triggering impacts from the interdependencies across enterprises and individuals (Glavovic, 2014; Paulik et al., 2021).

Slow-onset climate change impacts have also had cascading and compounding effects. For example, degradation of the GBR by ocean heating, acidification and non-climatic pressures (Marshall et al., 2019), repeated pluvial, fluvial and coastal flooding of some settlements (Paulik et al., 2019a; Paulik et al., 2020), long droughts and water insecurity in rural communities (Tschakert et al., 2017) and the gradual loss of species and ecological communities have caused substantial ecological, social and economic losses. Indigenous Peoples have especially been impacted by multiple and complex losses (Johnson et al., 2021) (11.4).

Cascading, compounding and aggregate impacts are projected to grow due to a concurrent increase in heatwaves, droughts, fires, storms, floods and sea level (high confidence) (CSIRO, 2020; Lawrence et al., 2020b). Urban wastewater, stormwater and water supply systems are particularly vulnerable in New Zealand (Paulik et al., 2019a; Hughes et al., 2021) to pluvial flooding (Box 11.4) and to sea level rise (SLR) (Box 11.6), with flow-on effects to settlements, insurance and finance sectors, and governments (Lawrence et al., 2020b). Furthermore, consecutive heavy rainfall events in late summer and autumn, following drought conditions in low-lying modified wetland areas, have implications for the operation of flood control infrastructure as increased rainfall intensity, land subsidence and sea level rise (SLR) compound and result in the retention of floodwaters (Pingram et al., 2021).

In Australia, the aggregate loss of wealth due to climate-induced reductions in productivity across agriculture, manufacturing and service sectors is projected to exceed AUD$19 billion by 2030, AUD$211 billion by 2050 and AUD$4 trillion by 2100 for RCP8.5 (Steffen et al., 2019) (Table 11.13). Projected impacts also cascade across national boundaries via value chains, markets, movement of humans and other organisms and geopolitics (e.g., migration from near-neighbours as a pathway for adaptation, mobile climate-sensitive diseases and changes in production and trade patterns) (Lee et al., 2018; Nalau and Handmer, 2018; Schwerdtle et al., 2018; Dellink et al., 2019). The scale of impacts is projected to challenge the adaptive capacity of sectors, governments and institutions (Steffen et al., 2019), including the insurability of assets and risks to lenders (Storey and Noy, 2017).

Table 11.13 | Economy-wide projected costs (AUD$) of climate change in Australia. (Estimates are not comparable across studies because different methods have been used. Estimates for later in the century are speculative because both impacts and adaptation are uncertain.)

Coordinating adaptation strategies and addressing underlying exposure and vulnerability can increase resilience to cascading, compounding and aggregate impacts (high confidence) (Table 11.17; 11.7.3). Systems understanding, network analysis, stress testing, spatial mapping, collaboration, information sharing and interoperability across states, sectors, agencies and value chains, as well as national-scale facilitation, can increase adaptive capacity (Espada et al., 2015; CoA, 2020e; Cradock-Henry et al., 2020b; Jozaei et al., 2020). Greater system diversity, modularity, redundancy, adaptability and decentralised control can reduce the risk of cascading failures and system breakdown (Sinclair et al., 2017; Sellberg et al., 2018). Addressing existing vulnerabilities in systems can reduce susceptibility and improve the resilience of interdependent systems (11.7.3). Multi-level leadership, including national and sub-national policies, laws and finance can reduce and manage aggregate risks supported by the enablers in Table 11.17.

Anticipatory governance and agile decision-making can build resilience to cascading, compounding and aggregate impacts (high confidence) (Boston, 2016; Deloitte, 2016; Steffen et al., 2019; CoA, 2020e; CSIRO, 2020; Lawrence et al., 2020b; MfE, 2020c). There is uncertainty about whether standard integrated assessment models can estimate cascading and compounding impacts across systems and sectors, but systems methodologies and social network analysis hold promise (Stoerk et al., 2018; Cradock-Henry et al., 2020b). Interventions at the landscape, building and individual scales can reduce the negative health effects of current and future extreme heat, if integrated in well-communicated heat action plans with robust surveillance and monitoring (Jay et al., 2021).

In Australia, the National Disaster Risk Reduction Framework (CoA, 2018b), National Recovery and Resilience Agency and Australian Climate Service (CoA, 2021) can provide some support for adaptation across multiple sectors. New Zealand has effective partnerships across critical infrastructure through lifelines groups, but organisational silos and lack of stress testing of plans hamper coordinated decision-making during crises and for adaptation (Brown et al., 2017; Lawrence et al., 2020b). The New Zealand national risk assessment, national adaptation plan, forthcoming Climate Change Adaptation Act and monitoring of adaptation progress by the Climate Change Commission provide a framework for anticipating climate change risks (MfE, 2020a).

In Australia, during 2007–2016, total economic costs from natural disasters averaged AUD$18.2 billion per year (Deloitte, 2017a). Individual weather-related disaster costs across multiple sectors have exceeded AUD$4 billion, such as the 2009 fires in Victoria (Parliament of Victoria, 2010), the 2010–2011 floods in south-east Queensland (Deloitte, 2017b), the 2019 floods in northern Queensland (Deloitte, 2019) and the 2019–2020 fires in southern and eastern Australia (Box 11.1).

In New Zealand, the annual cost of rural fire to the economy has been estimated at NZD$67 million, with indirect ‘costs’ potentially two to three times the direct costs (Scion, 2018). Insured losses from weather-related disasters cost almost NZD$1 billion during 2015–2021 (ICNZ, 2021). Floods cost the New Zealand economy at least NZD$120 million for privately insured damages between 2007 and 2017 (D. Frame et al., 2018). The 2007/2008 drought cost NZD$3.2 billion and the 2012/13 drought cost NZD$1.6 billion, of which about 20% could be attributed to anthropogenic climate change (Frame et al., 2020) (11.3.11).

The intangible costs of climate impacts, including death and injury, impacts on health and well-being, education and employment, community connectedness and the loss of ancestral lands, cultural sites and ecosystems (Barnett et al., 2016; Warner et al., 2019), affect multiple sectors and systems and exacerbate existing vulnerabilities. While often incommensurable, intangible costs may be far higher than the tangible costs. For example, following the Victorian fires in 2009, the tangible costs were AUD$3.1 billion while the intangible costs were AUD$3.4 billion; following the Queensland floods in 2010/2011, the tangible costs were AUD$6.7 billion while the intangible costs were AUD$7.4 billion (Deloitte, 2016).

The economic long-run impact increases with higher levels of warming (high confidence), but there is a wide range in projections. Conservative estimates for the long-run impacts of a 1°C, 2°C or 3°C global warming (relative to 1986–2005) on Australian GDP are −0.3, −0.6 and −1.1%/year, respectively, while for New Zealand the estimates are −0.1, −0.4 and −0.8%/year respectively (Kompas et al., 2018). More detailed modelling indicates a loss in Australia’s GDP of 6% by 2070 for 3°C global warming, while a 2.6% GDP rise by 2070 is possible for 1.5°C global warming (Deloitte, 2020). The potential for much more severe effects on GDP is shown in recent estimates, which attempt to account for the increased severity of uncertain effects (e.g., up to 18.5% reduction in Australia’s GDP by mid-century) (Swiss Re, 2021).

In Australia, the total annual cost of damage due to floods, coastal inundation, forest fires, subsidence and wind (excluding cyclones) is estimated to increase 55% between 2020 and 2100 for RCP8.5 (Mallon et al., 2019). National damage costs and impacts on asset values could be significant (Table 11.13). The macroeconomic shocks induced from climate change, including reduced agricultural yields, damage to property and infrastructure and commodity price increases, could lead to significant market corrections and potential financial instability (Steffen et al., 2019). Under a ‘slow decline’ scenario by 2060 where Australia fails to adequately address climate change and sustainability challenges, GDP is projected to grow at 0.7% less per year and real wages would be 50% lower than under an ‘outlook scenario’ where Australia meets climate change and sustainability challenges (CSIRO, 2019).

In New Zealand, the value of buildings exposed to coastal inundation could increase by NZD$2.55 billion for every 0.1-m increment in sea level, that is, NZD$25.5 billion for a 1.0-m sea level rise (SLR) (Paulik et al., 2020). Greater understanding is required of the distributional impacts, the rate of change of costs over time and the economic implications of delayed action (Warner et al., 2020).

Investments in mitigation and adaptation can help reduce or prevent economic losses now and in the coming decades (IPCC, 2018; Steffen et al., 2019); however, the costs and benefits of mitigation and adaptation are not well understood in the region (high confidence) (CSIRO, 2019; MfE, 2020a).

In New Zealand, the emphasis has been on rebuilding after climate disasters, rather than anticipatory adaptation (Boston and Lawrence, 2018). Australia is similarly focused on disaster response and recovery, even though investment in disaster resilience can provide a cost:benefit ratio of 1:2 to 1:11 through reduced post-disaster recovery and reconstruction (GCA, 2019). Recent Australian and state government spending on direct recovery from disasters was around AUD$2.75 billion per year, compared to funding for natural disaster resilience of approximately AUD$0.1 billion per year (Deloitte, 2017b). The Australian government is supporting most of the 80 recommendations from the Royal Commission into National Natural Disaster Arrangements, including establishing a disaster advisory body and a resilience and recovery agency (CoA, 2020e; CoA, 2020b). Australia and New Zealand provide humanitarian and disaster assistance across the Pacific, which is increasingly focused on climate adaptation and the SDGs (Brolan et al., 2019) as cyclones and floods become amplified by climate change (Fletcher et al., 2013) (Table 11.3). Climate change may increase current migration flows to and impacts on diaspora in Australia and New Zealand from near-neighbour island nations as they become increasingly stressed by rising seas, higher temperatures, more droughts and stronger storms (Nalau and Handmer, 2018).

Delaying adaptation to climate risks may result in higher overall costs in future when adaptation is more urgent and impacts more extreme (medium confidence) (Boston and Lawrence, 2018; IPCC, 2018). Estimates of the magnitude of adaptation costs and benefits in the region are localised and sectoral (e.g., (Thamo et al., 2017) or regionally aggregated (Joshi et al., 2016). Adaptation costs are expected to increase markedly for higher RCPs, for example, a tripling of expected costs between RCP2.6 and RCP8.5 for sea level rise (SLR) protection in Australia (Ware et al., 2020). Existing governance arrangements for funding adaptation are inadequate for the scope and scale of climate change impacts anticipated; dedicated funding mechanisms that can be sustained over generations can enable more timely adaptation (Boston and Lawrence, 2018).

Adaptation decision support tools enable a shift from reactive to anticipatory planning for changing climate risks (high confidence). The available tools are diversifying with futures and systems methodologies and dynamic adaptive policy pathways being increasingly used (Bosomworth et al., 2017; Prober et al., 2017; Lawrence et al., 2018a; CoA, 2020e; Rogers et al., 2020a; Schneider et al., 2020) (11.5; Box 11.6) to facilitate the shift from static to dynamic adaptation by highlighting path dependencies and potential lock-in of decisions, system dependencies and the potential for cascading impacts (Table 11.17) (Wilson et al., 2013; Clarvis et al., 2015; Pearson et al., 2018; Cradock-Henry et al., 2020b; Lawrence et al., 2020b). Modelling and tools to test the robustness and cost-effectiveness of options (Infometrics and PSConsulting, 2015; Qin and Stewart, 2020) can be used alongside adaptation strategies with decision-relevant and usable information (Smith et al., 2016; Tangney, 2019; Serrao-Neumann et al., 2020), particularly when supported by effective governance and national and sub-national guidance (Box 11.6).

More inclusive, collaborative and learning-oriented community engagement processes are fundamental to effective adaptation outcomes (11.7.3.2) (very high confidence) (Boston, 2016; Lawrence and Haasnoot, 2017; Sellberg et al., 2018; Serrao-Neumann et al., 2019a; Simon et al., 2020). More participatory vulnerability and risk assessments can better reflect different knowledge systems, values, perspectives, trade-offs, dilemmas, synergies, costs and risks (Jacobs et al., 2019; Ogier et al., 2020; Tonmoy et al., 2020). A shift from hierarchical to more cooperative governance modalities can assist effective adaptation (Vermeulen et al., 2018; Steffen et al., 2019; CoA, 2020e; Lawrence et al., 2020b; MfE, 2020a; Hanna et al., 2021).

Regular monitoring, evaluation, communication and coordination of adaptation are essential for accelerating learning and adjusting to dynamic climate impacts and changes in socioeconomic and cultural conditions (high confidence) (Moloney and McClaren, 2018; Palutikof et al., 2019a; Cradock-Henry et al., 2020a). Training to improve decision makers’ ‘evaluative capacity’ can play a role (Scott and Moloney, 2021). Climate action benchmarking, diagnostic tools and networking can enhance the adaptation process across diverse decision settings (e.g., water, coasts, protected areas and Indigenous Peoples) (Ayre and Nettle, 2017; Davidson and Gleeson, 2018; Coenen et al., 2019; Gibbs, 2020). Effective adaptation requires cross-jurisdictional and cross-sectoral policy coherence and national coordination (Delany-Crowe et al., 2019; Rychetnik et al., 2019; MfE, 2020c).

Concern for climate change has become widespread (Hopkins, 2015; Borchers Arriagada et al., 2020), giving climate adaptation social legitimacy (high confidence). Over three quarters of Australians (77%) agree that climate change is occurring, and 61% believe climate change is caused by humans (Merzian et al., 2019). A growing proportion of Australians perceive links between climate change and high temperatures experienced during heatwaves and extremely hot days (Summer 2018/2019) (48%), droughts and flooding (42%) and urban water shortages (30%) (Merzian et al., 2019). Rural populations in NSW perceive climate change impacts as stressing their well-being and mental health and requiring leadership and action (Austin et al., 2020). In New Zealand, between 2009 and 2018, the proportion of New Zealanders who agreed or strongly agreed that climate change is real increased from 58% to 78% (a 34.5% increase), while those agreeing or strongly agreeing that it was caused by humans increased from 41% to 64% (a 56.1% increase) (Milfont et al., 2021). Nevertheless, New Zealanders have a tendency to overestimate the amount of sea level rise (SLR), especially among those most concerned about climate change and incorrectly associate it with melting sea ice, which has implications for engagement and communication strategies (Priestley et al., 2021).

The use of more systemic, collaborative and future-oriented engagement approaches is facilitating adaptation in local contexts (high confidence) (Rouse et al., 2013; MfE, 2017a; Leitch et al., 2019). Local ‘adaptation champions’ and experimental and tailored engagement processes can enhance learning (McFadgen and Huitema, 2017; Lindsay et al., 2019). Dynamic adaptive pathways planning (Lawrence et al., 2019a) and inclusive community governance (Schneider et al., 2020) can help progress difficult decisions such as the relocation of cultural assets and managed retreat, and contestation about which public goods to prioritise and how adaptation should be implemented (Kwakkel et al., 2016) (Colliar and Blackett, 2018). Participatory climate change scenario planning can test assumptions about the present and the future (Mitchell et al., 2017; Serrao-Neumann and Choy, 2018; Chambers et al., 2019; Serrao-Neumann et al., 2019c) and help envision people-centred, place-based adaptation (Barnett et al., 2014; Lindsay et al., 2019). Social network analysis can inform engagement and communication of adaptation (Cunningham et al., 2017). Knowledge brokers, information portals and alliances can help communities, governments and sector groups to better access and use climate change information (Shaw et al., 2013; Fünfgeld, 2015; Lawrence and Haasnoot, 2017). Novel approaches to building climate change literacy and adaptation capability go hand in hand with dedicated expert organisational support (Stevens and O’Connor, 2015; CCATWG, 2018; Palutikof et al., 2019c; Salmon, 2019). All of these approaches depend on adequate resourcing (very high confidence).

There are two priority areas where new knowledge is critical for accelerating adaptation implementation.

1. System complexity and uncertainty in observed and projected impacts
   • Regionally relevant projections of rainfall, runoff, compound and extreme weather (11.2.1, 11.3.3; Box 11.4)
   • Inclusion of cascading and compounding impacts in integrated assessments (11.5.1), including for infrastructure (11.3.5), tourism (11.3.7) and health (11.3.6) and for different groups, including Aboriginal and Torres Strait Islander Peoples and Tangata Whenua Māori communities (11.4)
   • Impacts on terrestrial and freshwater ecosystems, including in situ monitoring to detect ongoing changes especially in New Zealand (11.3.1), and marine biodiversity, including environmental tolerances of key life stages (11.3.2)
   • Repository of indigenous species distribution data for monitoring responses to climate change and climate advisory services for New Zealand (11.3.1.3)
   • National risk assessment for Australia (11.7.1)
   • The interactions between adaptation and mitigation, particularly where land carbon mitigation is impacted by climate change (11.3.4.3; Box 11.5)
2. Supporting adaptation decision making
   • Better understanding of who and what is exposed and where and their vulnerability to climate hazards (11.3, 11.4)
   • National assessments of the costs and benefits of climate change, with and without different levels and timings of adaptation and mitigation (11.5.2.3) (11.7.1)
   • Understanding available adaptation strategies and options, their feasibility and effectiveness as the climate changes, including their intended and unintended outcomes (11.7, 11.8)
   • Understanding how to embed robust planning approaches into decision making that retain flexibility to change course in the future (11.7.1).
   • Mechanisms for sharing knowledge and practice of adaptation (11.7).
   • The role of development paradigms, values and political economy in adaptation framing and effective implementation (11.8).
   • Understanding social transitions and social licence, for timely, robust and transformational adaptation (11.8.2).