The National Climate Risk Assessment, released this week, has made headlines, but adds little to all the other such reports of recent decades. David McEwen on what’s missing.
The NCRA report joins a long series of privately commissioned and government reports published since the Garnaut Climate Change Review was released in 2008, itself containing 317 references to risk.
Garnaut’s 680-page review also made 118 references to “fossil fuels”, those pesky things that are causing about three-quarters of the climate pollution that necessitated the Garnaut report in the first place. Even 17 years ago, Garnaut made clear that coal, gas and oil were the largest and (then) fastest growing source of emissions, and that continued production, export and unabated use did not spell good news for planetary health.
One of his key recommendations was an emissions trading scheme to incentivise economy-wide reductions.
How things have changed. While the terminology for climate risk assessment has evolved, the fundamentals remain the same. There are two major categories of risk: physical, covering the impacts of our fast-changing climate (including associated sea level rise and ocean acidification), and transition risks.
Transition risks
Transition risks address the impacts to economies, companies, communities and households associated with responses to reduce emissions. Due to the need to substantially eliminate fossil fuel consumption and its associated production emissions, there will be winners and losers. At the moment, fossil fuel companies are winning hands down, and we are all losers.
Should governments show signs of taking climate risks seriously, the situation would need to be reversed.
And so, the NCRA has just a solitary reference to fossil fuels, which is the bit where it quietly acknowledges that it is ignoring the elephant in the room:
“The National Assessment focuses on physical climate risk only. However, the physical risk arising from the effects of climate hazards on climate transition elements (e.g. the impact of increased temperatures on solar infrastructure that aims to help transition the economy from reliance on fossil fuels) is examined.”
In explaining this glaring omission, the report quickly adds that it is “consistent with the approach… developed by other OECD countries such as the United Kingdom and New Zealand.”
So what? Unlike the UK and NZ, as the third largest fossil fuel exporter, Australia is a major petrostate. Meanwhile, some of our largest export partners, particularly China, are already transitioning rapidly towards becoming “electrostates” (sourcing increasing proportions of their total energy needs from renewably-produced electricity, while converting transport, buildings and industry away from fossil fuels).
Given its vast renewable resources (sun, wind, land and know-how),
Australia could be an electrostate too, but not if it continues to pander to the fossil lobby.
Renewable installations accelerating
It took 68 years to install the first Terrawatt of solar capacity and just two (2023-24) for the next Terrawatt. In just the first half of 2025, 38% of the third Terrawatt was installed, with deployments in China accounting for over half of that.
China installed double the solar Australia has installed since the invention of the solar panel in just one month in May 2025.
We’re reaching the steepest part of the technology adoption “S-curve” on a range of renewable technologies, with battery storage – critical to balancing the variable nature of renewable generation – and electric vehicles also going gangbusters.
While the physical risks of climate change are scary, economically, if we don’t manage the transition risks well – and right now we’re failing badly, as last week’s North West Shelf approval demonstrates – we risk becoming a washed-up petrostate with no customers and dwindling financial resources to grapple with mounting adaptation costs to the physical climate risks, simply because we bungled the transition.
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What to do?
A good start would be to clamp down on the torrent of disinformation disseminated by malicious actors – you can guess who. With the release of the NCRA this week, the torrent of trolling on related social media posts has reached a fever pitch. Here we can use the precedent of tobacco, starting with a “fossil ad ban”, extended to social-license-buying sponsorships, any association with schools, and ideally curbs on political donations and lobbying.
Given its significant climate risks, Australia has, to date, had a very muted observation of its obligations under Article 12 of the Paris Agreement, “to enhance climate change education, training, public awareness, public participation and public access to information, recognising the importance of these steps with respect to enhancing actions under this Agreement.”
A large-scale information campaign is sorely needed: a “slip slop slap” for our times, countering common myths and talking about the many benefits of transition.
Such a campaign might point out that the fossil industry is not the domestic behemoth many might believe. It has been well documented that, as an employer, it’s a comparative minnow, at around 1% of the Australian workforce (though it is acknowledged that coal and gas workers do tend to be well remunerated).
While the sector produces commendable export receipts, a relatively small proportion of that reaches government hands in the form of taxes or royalties (which are not a tax, but the price governments charge mining companies for each unit of coal or gas, sometimes $0) compared with similar petrostates like Qatar or Norway.
The entire fossil fuel sector contributes just 2.5% of total federal and state government revenues, and that’s before they get a chunk of it back in the form of generous subsidies.
Economic impact exaggerated
An analysis from the Reserve Bank of Australia concluded,
The overall impact of reduced fossil fuel exports on GDP is expected to be relatively small and gradual.
“The direct contribution of fossil fuel exports to annual GDP growth would be on average 0.1 percentage points lower in the Net Zero scenario relative to the baseline. There would also be flow-on impacts to associated activity; however, these impacts are likely to be partly offset, over time, by opportunities in other sectors.”
Australia’s “climate wars” have been brutal, contributing to the demise of most of our Prime Ministers since Garnaut’s landmark report. But now – with some of the main antagonists currently in disarray and the mounting impacts of climate change ever more obvious – could we perhaps move towards a more realistic discussion about the risks and opportunities of proactively tackling the biggest challenge humanity has ever faced, with the determination, urgency and honesty that it deserves?
Here’s hoping.
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David McEwen is a Director at Adaptive Capability, providing climate risk and emissions reduction strategy, program and project management. He works with businesses, community leaders, policy makers, designers and engineers to deliver impactful change. His book, Navigating the Adaptive Economy, was released in 2016. He holds an MBA from the Australian Graduate School of Management and a certificate in Sustainability and Climate Risk from the Global Association of Risk Professionals.