Mon, Jun 06, 2011 - Page 10 News List

La Nina-triggered floods bill to total US$13 billion

Bloomberg

Australia’s damage bill from floods that devastated the northeast earlier this year has climbed 33 percent to A$12 billion (US$13 billion), with resources and agriculture the hardest hit, the government said.

“Lost commodity production is likely to be around A$9 billion and damage to crops more than A$2 billion,” Australian Treasurer Wayne Swan said in an e-mailed statement yesterday.

“There are of course other soft spots in our economy,” he said. “We’re still seeing lingering effects from the global financial crisis and the impact of a high [Australian] dollar on sectors like manufacturing, tourism and education.”

Australian Prime Minister Julia Gillard called the January floods, triggered by a La Nina weather event, the nation’s most expensive natural disaster.

She is attempting to introduce a carbon tax on polluters to curb greenhouse gas emissions, believed by some scientists to be responsible for exacerbating weather events.

Queensland is feeling the brunt of the economic impact of the floods, with Queensland Treasurer Andrew Fraser yesterday saying its coffers would be reduced by A$6.8 billion, up from a previous estimate of A$5.8 billion.

Australia’s economy shrank in the first quarter by the most in 20 years after flooded coal mines, -railways and farmland hurt exports.

Reserve Bank of Australia Governor Glenn Stevens has held interest rates at 4.75 percent for the past five meetings to help Queensland recover.

The state produces 80 percent of steel-making coal exports from Australia, the world’s biggest supplier, and grows more than 30 percent of the country’s fruit and vegetables.

“The January floods and Cyclone Yasi led to 37 lives lost, and thousands more Queenslanders with shattered homes and livelihoods,” Fraser said. “There has also been enormous damage to infrastructure and significant costs incurred in managing the response and recovery process.”

While the weather impact of the La Nina event has dissipated, its effect on the climate change debate continues. The government, which steered Australia through the global financial crisis, is losing popularity over plans to impose a tax on mining companies’ profits and charge polluters in order to reduce greenhouse-gas emissions.

Rallies supporting the carbon tax took place in cities around Australia yesterday, according to the World Wildlife Fund. The rallies attracted about 45,000 people nationwide, the fund’s Perth-based spokesman, Cortlan Bennett, said in a telephone interview.

More than A$266 billion of assets in coastal areas are at risk from rising sea levels expected from climate change, Australian Minister for Climate Change and Energy Efficiency Greg Combet said in a separate statement yesterday.

“Putting a price on carbon will allow the market to find the cheapest and most efficient ways to cut pollution, rather than having the government tell individual companies or sectors what to do,” Swan said yesterday.

“Dirty energy will become more expensive and clean energy cheaper under a carbon price, creating the jobs of the future and helping to protect our environment and our economy,” he said.

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