Murray-Darling report shows public authorities must take climate change risk seriously


Arjuna Dibley, Stanford University

The tragic recent events on the Darling River, and the political and policy furore around them, have again highlighted the severe financial and environmental consequences of mismanaging climate risks. The Murray-Darling Royal Commission demonstrates how closely boards of public sector corporate bodies can be scrutinised for their management of these risks.

Public authorities must follow private companies and factor climate risk into their board decision-making. Royal Commissioner Brett Walker has delivered a damning indictment of the Murray Darling Basin Authority’s management of climate-related risks. His report argues that the authority’s senior management and board were “negligent” and fell short of acting with “reasonable care, skill and diligence”. For its part, the authority “rejects the assertion” that it “acted improperly or unlawfully in any way”.

The Royal Commission has also drawn attention to the potentially significant legal and reputational consequences for directors and organisations whose climate risk management is deemed to have fallen short of a rising bar.




Read more:
Damning royal commission report leaves no doubt that we all lose if the Murray-Darling Basin Plan fails


It’s the public sector’s turn

Until recently, scrutiny of how effectively large and influential organisations are responding to climate risks has focused mostly on the private sector.

In Australia it is widely acknowledged among legal experts that private company directors’ duty of “due care and diligence” requires them to consider foreseeable climate risks that intersect with the interests of the company. Indeed, Australia’s companies regulator, ASIC, has called for directors to take a “probative and proactive” approach to these risks.

The recent focus on management of the Murray-Darling Basin again highlights the crucial role public sector corporations (or “public authorities” as we call them) also play in our overall responses to climate change – and the consequences when things go wrong.

Australia’s economy, once dominated by publicly owned enterprises, was reshaped by waves of privatisations in the late 20th century. However, hundreds of public authorities continue to play an important role in our economy. They build and maintain infrastructure, generate energy, oversee superannuation portfolios, provide insurance and manage water resources, among many other activities.

This means that, like their counterparts in the private sector, many face risks associated with climate change. Take Melbourne Water, for instance, a statutory water corporation established to manage the city’s water supply. It will have to contend with increasingly hot summers and reduced rainfall (a physical risk), and also with the risk that government policy in the future might impose stricter conditions on how water is used (a transition risk).

What duties do public authorities owe?

Our new research from the Centre for Policy Development, shows that, at the Commonwealth and Victorian level (and likely in other Australian jurisdictions), the main laws governing officials in public authorities are likely to create similar obligations to those imposed on private company directors.

For instance, a 2013 federal act requires public authority board members to carry out their duties with the degree of “due care and diligence” that a reasonable person would exercise if they were a Commonwealth official in that board position.

The concept of a “reasonable person” is crucial. There is ever-increasing certainty about the human contribution to climate change. New tools and models have been created to measure the impact of climate change on the economy. Climate risks are therefore reasonably foreseeable if you are acting carefully and diligently, and thus public authority directors should consider these risks.

The obligations of public authority directors may, in some cases, go beyond what is required of private company directors. The same act mentioned above requires Commonwealth officials to promote best practice in the way they carry out their duties. While there is still wide divergence in how private companies manage climate change, best practice in leading corporations is moving towards more systematic analysis and disclosure of these risks. Accordingly, a “best practice” obligation places an even higher onus on public sector directors to manage climate risk.

The specific legislation that governs certain public authorities may introduce different and more onerous requirements. For instance, the Murray-Darling Basin Authority’s governing legislation, the Water Act 2007, imposes a number of additional conditions on the authority. This includes the extent to which the minister can influence board decision-making.

Nonetheless, our laws set out a widely applicable standard for public authority directors.

Approaches to better manage public authority climate risks

While some public authorities are already carefully considering how physical and transition climate risks affect their work, our research suggests that standards vary widely.

As with the private sector, a combination of clear expectations for better climate risk management, greater scrutiny and more investment in climate-related capabilities and risk-management frameworks can all play a role in raising the bar. Our research highlights four steps that governments should consider:

  • creating a whole-of-government toolkit and implementation strategy for training and supporting directors to account for climate-risk in decision-making

  • using existing public authority accountability mechanisms – such as the public sector commissioner or auditor general’s office – to more closely scrutinise the management of climate-related financial risks

  • issuing formal ministerial statements of expectations to clarify how public authorities and their directors should manage climate-related risks and policy priorities

  • making legislative or regulatory changes to ensure consistent consideration, management and disclosure of climate risk by public sector decision-makers.




Read more:
Company directors can be held legally liable for ignoring the risks from climate change


Measures such as these would set clear expectations for more consistent, sophisticated responses to climate risks by public authorities. However, even without any changes, it should be clear that public authority directors have legal duties to consider climate risks – and that these duties must be taken seriously even when doing so is complicated, controversial or politically sensitive.The Conversation

Arjuna Dibley, Graduate Fellow, Steyer-Taylor Center for Energy Policy and Finance, Stanford University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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When extreme weather wipes out wildlife, the fallout can last for years


Sean Maxwell, The University of Queensland and James Watson, The University of Queensland

The recent heatwaves have proved deadly to many Australian animals, from feral horses to flying foxes.

And it’s not just heatwaves that can cause mass die-offs. Last year, flooding rain wiped out entire Antarctic penguin colonies, while drought has previously caused mass mangrove diebacks around the Gulf of Carpentaria.

These events generate headlines, but what about the aftermath? And are these catastrophic events part of a wider pattern?




Read more:
Killer climate: tens of thousands of flying foxes dead in a day


Our research describes how species have responded to extreme weather events over the past 70 years. These responses can tell us a great deal about how species are likely to cope with change in the frequency and intensity of extreme events in coming years.

We reviewed 517 studies, dating back to 1941 and conducted throughout the world, that examined how birds, mammals, fish, amphibians, reptiles, invertebrates or plants have responded to droughts, cyclones, floods, heatwaves, and cold snaps.

We found more than 100 cases of dramatic population declines. In a quarter of these cases, population numbers showed no sign of recovery long after the event. And in most cases, extreme events reduced populations of common species that play an important role in maintaining ecosystem integrity.

For example, extreme drought in the 2000s drove massive population declines of invertebrate freshwater species across Australia’s Murray-Darling Basin, and populations of buffalo, waterbuck, and kudu along the Zambezi River in Zimbabwe suffered severe and persistent declines following droughts in the 1980s.

We also found 31 cases of populations completely disappearing after an extreme event. Large populations of lizards and spiders were eradicated after Hurricane Lilli struck the Bahamas in 1996, for example. These populations had begun to recover one year after Lilli, but in half of all the cases of local population extinction, the species was still absent years or decades after exposure to an extreme event.

Negative responses were the most commonly reported, and also included habitat loss, declines in species numbers, and declines in reproductive fitness after an extreme event. These impacts clearly pose a serious risk to the longevity of many species, and to threatened species in particular. Kosciuszko National Park, for example, is a stronghold for the endangered northern corroboree frog, but 42% of its breeding sites in the park were rendered unusable by severe drought conditions throughout the 2000s.

Is there an upside?

Alongside the many negative impacts, we also found a larger‐than‐expected number of positive or neutral responses to extreme events (21% of all responses). This is a reminder that natural disturbances from extreme events often play a crucial role in the natural dynamics of an ecosystem.

Unfortunately, however, in many cases it was invasive species that benefited from extreme events. Flooding in southern Minnesota in 2004, for example, led to the rapid incursion of invasive green sunfish into streams, and cyclones accelerated the invasion of sweet pittosporum in Jamaican rainforests in the 1990s.

Cases of extreme events benefiting threatened species were uncommon, but included rainforest frogs becoming less susceptible to a fungal pathogen, chytrid fungus, after cyclones reduced rainforest canopy cover.

We also identified a range of “ambiguous” responses, including changes in diet or foraging behaviour, and changes in the types of species inhabiting a study area. Changes in invertebrate communities were particularly prevalent (87 cases). In 18 of these cases, the changes were long-lasting. However, most of the studies we reviewed lasted less than one year, and did not monitor for long-term recovery following an extreme event. This limits our ability to assess the long-term implications of extreme events on the species composition of ecosystems.

Avoiding future impacts

The one failsafe option for helping species cope with extreme events is to retain intact habitats, as these are the places where species are most resilient to extreme events. Intact habitats are contiguous areas of water or native vegetation that often span various altitudes, temperatures and rainfall patterns. These places can also act as important refuges for species that rely on long breaks between extreme events to recover.

Where intact habitat protection is not possible, restoring land or seascapes can also help species to adapt to extreme events. For example, long-term restoration efforts (that is, those that will be effective for at least 15 years) in brackish marshes help plant and animal communities cope with drought events.

Ecological restoration that helps species to adapt to extreme events can also benefit humans too. For instance, coastal communities can use oyster reefs or seagrass beds to guard against flooding.




Read more:
Ecosystems across Australia are collapsing under climate change


Climate change has already increased the intensity and frequency of extreme events across the world, and the trend is expected to accelerate in the future. Recognising the importance of planning for extreme events is essential for helping species cope with climate change. Building resilience to extreme events may also provide an opportunity to reduce the vulnerability of humans too.

Governments, local councils, and local communities are under increasing pressure to plan for extreme climate events. We now need similar recognition of the importance of extreme events in threatened species planning efforts. Right now, this planning is virtually non-existent, and that needs to change.The Conversation

Sean Maxwell, Postdoctoral fellow, The University of Queensland and James Watson, Professor, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.