This paper looks at the current cost of extreme meteorological disasters to Australia and Victoria in an effort to provide a starting point for appreciating the types of costs that may be present and increasing under climate change. There exists a confounding variety and breadth of estimates relating to the cost of weather related disasters in Victoria and Australia. Comparative analysis shows that data source and methodology have profound impacts on the conclusions drawn from both aggregate analyses of disaster costs and analyses of individual events, in this case the 1983 Ash Wednesday bushfires. Disaster cost estimates in Australia are largely drawn from insurance data or insurance data with some augmentation; the estimates that utilise insurance data are a limited proxy for disaster cost. Insurance data only account for insured losses, and these represent only a fraction of the total cost of a disaster. In particular they do not include many indirect costs, valuations for loss of life, nor intangibles such as ecosystem services which can have significant impacts on cost estimates. Analyses based on insurance data also draw conclusions influenced by which hazards and assets are or are not insured.
This document has been obtained from the Victorian Centre for Climate Change Adaptation Research (VCCCAR) online knowledge hub hosted by the University of Melbourne and has been listed in the Virtual Hub for Climate Change Innovation with the permission of the Climate Change Programs division of the Department of Environment, Land, Water and Planning (DELWP) and Professor Rod Keenan, School of Ecosystem and Forest Sciences, University of Melbourne. The VCCCAR program funded by the Victorian Government via the then Department of Environment and Primary Industries (later changed to DELWP), ceased activity in June 2014.