Disclosure of climate-related financial risk

Stuart Browning

In light of underwhelming progress at COP-24 (the annual United Nations Framework Convention on Climate Change (UNFCCC) Conference Of the Parties (COP) in Katowice 2018), it is increasingly improbable the Paris Agreement’s ambitions will be achieved. Instead, it seems more likely that recommendations from the Financial Stability Board (FSB) will be the primary catalyst for effective action on climate change mitigation. Projections of the economic cost of climate change have always been somewhat dire (e.g. Stern (2006)); and have been mostly ignored by policy makers. However, the FSB have recommended financial risks due to climate change should be disclosed by all publicly listed companies. This is driving the financial sector to seriously consider the implications of climate change, and the results are likely to be sobering. With an understanding of risk comes investor pressure to minimise the risk, and this may well drive mitigation efforts above and beyond those achieved via the ‘heads-of-state’ level Paris Agreement.

Publicly listed companies are legally required to disclose material risks to their investors. This disclosure is especially relevant for banks, insurance companies, asset owners and managers when evaluating the allocation of trillions of dollars in investor capital. In 2017 the FSB released the final report of the Task Force on Climate-related Financial Disclosures (TFCD), which stresses that climate change is a material risk (and/or opportunity) that should be disclosed—preferably alongside other risks in annual reporting. The TFCD proposes a framework for climate risk determination and disclosure (Figure 1), where risk is classified into two main types: transitional and physical. Transitional risks are those that may impact business models through changing technologies and policies: examples would be a carbon tax, or stranded assets associated with redundant fossil fuel exploration and extraction. Physical risks are those associated with climate change itself: these could be chronic risks such as sea level rise, or acute risks such as more extreme storms, floods or droughts.

While climate change is expected to impact most businesses, even current exposure and vulnerability is not being adequately disclosed by most organisations. The Australian Securities and Investment Commission (ASIC) report in 2018 looked at climate risk disclosure in Australian companies and found that very few were providing adequate disclosure, thereby exposing themselves to legal implications; and more importantly, by failing to consider climate change as a risk, were potentially putting investor capital at risk. Companies that are attempting to disclose climate risk are typically doing so inconsistently, and with high-level statements of little use for investor decision-making (ASIC 2018). Quantifying organisational vulnerability and risk under climate change is a non-trivial task. Adequate implementation of the TFCD recommendations will likely occur over a >5 year timeframe (Figure 2). Initially companies are expected to develop some high level information on general risk under climate change. As research progresses, disclosure should become more specific.

Understanding risk in terms of weather and climate has long been of interest to the insurance sector, but is now something expected to be understood and disclosed by all sectors. The  Actuaries Institute have recently developed The Australian Actuaries Climate Index, which tracks the frequency of occurrence of extremes in variables of interest, such as temperature, precipitation, wind speed and sea level. The index provides a general level of information drawn from a distribution of observed variability. However, climate change will cause a shift in the distribution of events, meaning this information is of limited use for projections. The relationship between a warming climate and the frequency of extreme weather events is likely to be complex and peril and location specific. Quantifying physical climate risk requires an understanding of the physical processes driving climate variability, the technical expertise to work with petabytes of available data, and the capacity to run regional climate models for dynamical downscaling—these skills are typically restricted to research organisations and universities.

Useful risk disclosure will come from using the best available information to represent both past and projected climate variability. This means using a combination of observational and model based data. Exposure and vulnerability will need to be determined using weather station observations and reanalysis data. This will need to be organisation-specific and developed within the context of assets, operations, and physical locations. Risk projections can then be developed, and this should be done using scenario analysis across multiple time horizons: short, medium and long term. Short-term projections can be developed using established vulnerability together with seasonal forecasts. Medium- and long-term projections should be based on global climate model (GCM) projections developed within the framework of the Coupled Model Intercomparison Project (CMIP). These are the scenario-based industry-standard climate model projections used for the IPCC reports. The IPCC Fifth Assessment Report (AR5) was based on the CMIP5 suite of simulations. The next generation of simulations (CMIP6) are underway and should become publicly available from 2019-20 onwards. Projections of organisation-specific risk will need to be developed by downscaling GCM projections. The best results are likely to be achieved through a combination of statistical downscaling, dynamical downscaling, and machine learning.

Risk Frontiers utilises these projections within its suite of natural catastrophe (Nat Cat) loss models to investigate how losses may change in the future under different climate scenarios. Risk Frontiers adapts these Nat Cat models, developed for the insurance industry over the past 30 or so years to assist decision makers in estimating and managing catastrophe risk, to assess the impact of projected changes in weather-related hazard activity due to climate change as well as changes in vulnerability and exposure (Walker et al. 2016). In November 2018, The Geneva Association reported on the benefits of the integration of climate science and catastrophe modelling to understand the impacts of climate change stating that “Cat modelling is more relevant than ever”. With Nat Cat models being the ideal tool for this type of analysis, Risk Frontiers is strongly positioned to address the need for climate risk disclosure.

Figure 1 Factors identified in the TCFD report contributing to financial risk and opportunities under climate change (TFCD 2017)
Figure 2 Milestones in the implementation of the TCFD (TFCD 2017).

References

ASIC (2018) REPORT 593: Climate risk disclosure by Australia’s listed companies. (https://asic.gov.au/regulatory-resources/find-a-document/reports/rep-593-climate-risk-disclosure-by-australia-s-listed-companies/)

The Geneva Association (2018) Managing Physical Climate Risk: Leveraging Innovations in Catastrophe Modelling. [Available Online] https://www.genevaassociation.org/research-topics/extreme-events-and-climate-risk/managing-physical-climate-risk%E2%80%94leveraging?utm_source=PRfullreport&utm_medium=media&utm_campaign=risk+modelling

Stern, N. (2006) “Stern Review on The Economics of Climate Change (pre-publication edition). Executive Summary”. HM Treasury, London. Archived from the original on 31 January 2010. Retrieved 31 January 2010.

TFCD (2017) Financial Stability Board, Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures. (https://www.fsb-tcfd.org/publications/final-recommendations-report/)

TFCD (2017) Financial Stability Board, Final Report: Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures. (https://www.fsb-tcfd.org/wp-content/uploads/…/FINAL-TCFD-Annex-062817.pdf)

Walker, G. R., M. S. Mason, R. P. Crompton, and R. T. Musulin, 2016. Application of insurance modelling tools to climate change adaptation decision-making relating to the built environment. Struct Infrastruct E., 12, 450-462.

CPS 234: Will you comply? Information Security standard for APRA regulated organisations

By Denny Wan[1] and Tahiry Rabehaja[2]

[1] Denny Wan is the principal consultant of Security Express and a postgraduate researcher at the Optus Macquarie University Cyber Security Hub. He has deep expertise in cyber risk quantification. His research focuses on applying cyber insurance concepts to supply chain risk management. He is the chair of the Sydney Chapter for the Open Group FAIR cyber risk framework.

[2] Dr. Tahiry Rabehaja is a Software Engineer at Risk Frontiers and a Research Fellow at the Optus Macquarie University Cyber Security Hub with expertise in probabilistic modelling and Information Security.


Synopsis

In November 2018, the Australian Prudential Regulation Authority (APRA) released Prudential Standard CPS 234 making the board of regulated entities accountable for ensuring the adequacy and sustainability of their information security program. APRA’s standard was published 9 months after the Notifiable Data Breach scheme[1] came into effect in the first quarter of 2018.  The CPS 234 comes into full force in July 2019 with a 12 month extension for third party supplier contracts until July 2020.

Prudential Practice Guide CPG 234, expected to be updated in the first half of 2019, is the primary guidance for the implementation of this prudential standard. However, APRA has confirmed that it will not provide guidance or method for the classification of the materiality of an information asset. A structured approach to cyber risk quantification similar to the now mature natural catastrophe risk modelling or operational risk management is important to ensure the impartiality of the classification methods.

What is CPS 234

The goals of CPS 234, as stated in the policy release announcement[2], are to:

shore up APRA-regulated entities’ resilience against information security incidents (including cyber-attacks), and their ability to respond swiftly and effectively in the event of a breach

ensure all regulated entities develop and maintain information security capabilities that reflect the importance of the data they hold, and the significance of the threats they face

Regulated entities are required to:

  • clearly define information-security related roles and responsibilities;
  • maintain an information security capability commensurate with the size and extent of threats to their information assets;
  • implement controls to protect information assets and undertake regular testing and assurance of the effectiveness of controls; and
  • promptly notify APRA of material information security incidents.

To ensure compliance, clause 13 explicitly makes the board of the regulated entities be ultimately accountable:

13. The Board[4] of an APRA-regulated entity (Board) is ultimately responsible for the information security of the entity. The Board must ensure that the entity maintains information security in a manner commensurate with the size and extent of threats to its information assets, and wbles the continued sound operation of the entity.[5]

Information security is a business problem

APRA has made it clear in its response to the submission to the draft CPS 234[3]  that it intentionally makes the boards accountable for information security. This clearly means that information security is a business problem and not just an IT challenge. In its response, APRA explained that some submissions sought clarification on the “materiality rules”. Page 7 of the response gives one example of such a request:

various requests for the application of a materiality threshold in relation to certain requirements in CPS 234 as the basis for determining the need to apply requirements or the degree of work required in applying certain requirements in the standard. For example, some submissions argued for a materiality threshold to apply in relation to testing the effectiveness of information security controls, and in determining the need to escalate and report testing results to the Board or senior management where security control deficiencies are identified that cannot be remediated in a timely manner;

The following emphasis is further stated on page 8 under the section “APRA Response”:

This reflects the fact that ensuring the information security of all information assets remains the responsibility of the regulated entity and that the Board is ultimately responsible for the information security of the regulated entity.

A reasonable interpretation of APRA’s response is that the board is responsible for determining the materiality of information risk and adequacy of the controls. This interpretation is echoed by several commentators [4] [5] [6].

How to comply with CPS 234

A key challenge in preparing for compliance with CPS 234 is the lack of prescriptive compliance guidelines. This concern is discussed by other commentators [7] and was also echoed in some submissions. APRA noted on page 8 in its response to the submission regarding the materiality of an information asset:

CPS 234 prescribes neither the classification method nor the level of granularity — these are left to the regulated entity to determine, as appropriate for the entity’s size and complexity

The standard identifies nine compliance areas:

  1. Roles and responsibilities (clause 13 – 14)
  2. Information security capability (clause 15 – 17)
  3. Policy framework (clause 18 – 19)
  4. Information asset identification and classification (clause 20)
  5. Implementation of controls (clause 21 – 22)
  6. Incident management (clause 23 – 26)
  7. Testing control effectiveness (clause 27 – 31)
  8. Internal audit (clause 32 – 34)
  9. APRA notification (clause 35 – 36)

CPG 234 released in May 2013 is the practice guide referenced in CPS 234 covering most of these areas except information security capability (clause 15 – 17). APRA is expected to release a revised CPG 234 in the first half of 2019 to provide guidance on the implementation of CPS 234. However, it is clear from APRA’s response to the submission that the update to CPG 234 will not provide specific guidance on classification method nor the level of granularity in determining the materiality of an information asset. This can potentially create a challenge to comply with clause 15:

15. An APRA-regulated entity must maintain an information security capability commensurate with the size and extent of threats to its information assets, and which enables the continued sound operation of the entity.

As a result, the absence of a national cyber security standard or metric prompts the board to be responsible for eyeballing the materiality criteria and assess the sufficiency of their information security program under clause 13 and 15.

This is where a structured cyber risk quantification approach is important to provide an objective and quantifiable implementation of the compliance program. Currently, Risk Frontiers is partnering with the Optus Macquarie University Cyber Security Hub to develop a model for cyber security risk, parallel to its extensive work in natural catastrophe and rare event modelling. The cyber model aims at forecasting potential losses from tangible cyber-attacks given the profile of the victim. Such a model would provide the required metric to assess the potential severities of Information Security breaches for the underlying company.

[1] https://www.oaic.gov.au/privacy-law/privacy-act/notifiable-data-breaches-scheme

[2]https://www.apra.gov.au/media-centre/media-releases/apra-finalises-prudential-standard-aimed-combating-threat-cyber-attacks

[3]https://www.apra.gov.au/sites/default/files/response_to_submissions_-_information_security_cross-industry_prudential_standard.pdf

[4] https://www.ey.com/Publication/vwLUAssets/ey-CPS-234/$FILE/ey-CPS-234.pdf

[5]https://www.minterellison.com/articles/apra-prudential-standard-cps-234-information-security-has-been-released

[6] https://www2.deloitte.com/au/en/pages/risk/articles/apra-cps-234.html#

[7] https://blog.compliancecouncil.com.au/blog/what-are-the-information-security-requirements-of-cps-234

Extreme weather tops global risks

Andrew Gissing

This week the World Economic Forum again published its Global Risk Report. The report is based on a survey that accesses insights across the Forum’s vast network of business, government and community leaders.

For the third year running, extreme weather was listed as the top global risk in likelihood of occurrence and within the top 5 in impact. Overall, environmental risks dominated the assessment with failure of climate-change mitigation and adaptation and natural disasters also recorded amongst the top risks. These risks were rated above others that commonly occupy the minds of policy makers and the media such as asset bubbles, terrorist attacks, energy price shocks, financial crises and many more. (See Figure 1)

The report expresses rising concerns regarding climate inaction stating that: “of all risks, it is in relation to the environment that the world is most clearly sleepwalking into catastrophe”. The report further reiterates recent messages from the IPCC about the extent of the global struggle to restrict warming and the dire warning by the recent United States National Climate Assessment that without significant reductions in emissions, average temperatures could rise by five degrees Celsius by 2100.

It is claimed that the disruption to the production and delivery of goods and services due to environmental disasters has risen by 29% since 2012, placing additional strain on the resilience of organisations and their customers.

The growing threat of sea level rise and the rising population of coastal megacities globally was featured. Some 800 million people already live in cities vulnerable to sea level rise up to 0.5 metres. According to the World Bank, 70% of the largest cities in Europe are susceptible to sea level rise. The phenomena pose significant risks to properties and infrastructure, though the economic risk globally is concentrated in low-lying coastal areas with significant asset values. The report cites research that $14.1 Billion was lost from home values in parts of the US east coast due to sea level rise between 2005 and 2017.

Cyber risk was also rated highly with both massive data fraud and theft, and cyber-attacks being among the top five risks in likelihood of occurrence. Interestingly, respondents expected that cyber risks would increase in 2019. The associated vulnerabilities of essential infrastructure were a concern given recent examples of hackers gaining access to the control rooms of some utility companies in the United States.

For solutions, the report supports the need for action to rapidly decarbonize agriculture, energy, transport and industry to limit the rise of global temperatures and to establish plans for adaptation. The challenge of promoting proactive adaptation investment is, however, highlighted by citing statistics showing that spending on flood recovery is nine times greater than investment in flood mitigation.

Interestingly the report offers advice on conceptualising the unimaginable through promoting a technique of imagining failure and then thinking why such a failure may have occurred. Doing so is known as “prospective hindsight” and according to psychologists enables us to anticipate a broader and more vivid set of problems.

Risk Frontiers will continue to support our clients in addressing these top risks in 2019 through the continued licensing and development of our suite of natural hazard catastrophe loss models for Australia and New Zealand. Our partnership with the ARC Centre of Excellence for Climate Extremes will allow us to give our clients unique insights into how climate change may affect their business. Furthermore, we will continue our work on building a cyber loss model through the Optus Macquarie University Cyber Security Hub and in assisting Government clients to build safer and more resilient communities in partnership with organisations including the Bushfire and Natural Hazards Cooperative Research Centre.

For more on the report visit: www3.weforum.org/docs/WEF_Global_Risks_Report_2019.pdf

Figure 1: Global Risk Landscape 2019 (The Global Risk Report 2019, pp 5)

 

Analysis of fatalities attributed to Hurricane Florence in the US.

Jonathan van Leeuwen

Hurricane Florence impacted the US East Coast in September 2018 resulting in dangerous surf conditions, strong winds, storm surge and heavy rain producing significant flooding. The system made landfall over North Carolina as a Category 1 hurricane. While 1.7 million people received evacuation orders (The Independent, 2018), estimates of evacuees in shelters were around 30 thousand people (VOA, 2018), and total flood loss for residential and commercial properties in North Carolina, South Carolina and Virginia were estimated to be between $19 billion and $28.5 billion. Around 85 percent of residential loss is estimated to be uninsured (CoreLogic, 2018).
This article aims to identify key circumstances and demographic factors common in those who lost their lives as a result of Hurricane Florence.

We define a hurricane death as one which would not have occurred if the hurricane had not impacted, i.e. any death directly or indirectly caused by that hurricane. This includes deaths from the potential mechanisms of rain (e.g., filling a depression into which an individual may fall and drown) and its associated flooding (riverine, flash), storm surge, strong winds and high seas. It also includes deaths of persons carrying out activities specifically associated with the hurricane – e.g., taking measurements, preparing people, goods or buildings to evacuate or endure the event, and cleaning up after the event (e.g., an accident whilst running a generator that was required because strong winds from the hurricane have taken out the electricity supplies). Care needs to be taken with timing – for example, how long after a hurricane has passed should one attribute flood deaths to that hurricane? This will vary from one event to another and is best defined by the weather authorities as (e.g., for Australia) in the case of a tropical cyclone decaying to a tropical low which can produce rain long after the initial impact of the tropical cyclone.

By searching through articles from numerous media outlets, we have identified 53 hurricane deaths. Where possible, records were verified against multiple news sources. We also classified each record by the state and county in which the death occurred, 10 year age bracket, and by category of cause of death (e.g., deaths occurred while in a vehicle, deaths caused by falling debris). The results are also compared with previous research on fatalities associated with Australian Tropical Cyclones by Coates, et al. (2017).

Results and analysis

The most common circumstances that caused fatalities were related to vehicles (n=26, 49%) and flooding (n=23, 43%). Only one vehicle incident causing multiple deaths was identified. Fourteen (26%) fatalities resulted from vehicles being washed off roads and nine (17%) from vehicles colliding with obstacles due to water on the road causing aquaplaning or heavy rain causing low visibility. Most incidents involved only private vehicles, but two people died when a prison transport van was driven into floodwater and one person died driving a semi-trailer truck which aquaplaned, left the road and struck an undescribed obstacle. Only two flooding related fatalities were not also related to vehicles: a child playing in water which was deeper than normal due to preparatory release from a dam and a man who refused mandatory evacuation and was subsequently trapped in a caravan trailer.

Four people died as a result of a tree falling on their residence or vehicle during the hurricane, while other debris related circumstances included vehicle striking fallen tree, tree falling during clean-up operations and a woman who died after suffering a heart attack as emergency services could not get to her due to debris on roads. Two people died from carbon monoxide poisoning while running a generator indoors due to power outages, while other circumstances relating to death included loss of power for an oxygen concentrator and electrocution while attempting to connect extension cords to a generator in heavy rain. Two people died in a house fire which was caused by candles used after a loss of power. Two people fell from ladders and another person suffered unspecified injuries while cleaning debris from the storm or making repairs. Three people died in circumstances relating to evacuation, one of whom fell while packing for evacuation, one on a moped while evacuating and one who fell and struck his head in a hotel to which he had evacuated.

Victims were most commonly 70 years old and above. No deaths were recorded for people between 10 and 19 years old, but there were a few fatalities under 10 years old. The deaths of those under 10 years old were caused primarily by trees falling on homes, and being in cars that were driven into floodwater by an accompanying adult. Figure 1 shows fatalities in 10-year age categories as a percentage of all fatalities where age was reported.

Figure 1: % of fatalities by 10-year age category

Males represented 74% of the deaths where the gender of the deceased was specified; however, a higher proportion of females died in circumstances relating to vehicles (58%) compared to males at 35%. More males died in circumstances relating to preparing for, activities during, and clean-up after the event such as checking on possessions, setting up generators, swimming in dangerous conditions or clearing debris.

Discussion and conclusion

The consequences of Hurricane Florence provide a clear reminder of the dangers associated with driving vehicles during and after severe weather, and the importance of avoiding driving through floodwater. Severe weather is shown to increase risks associated with evacuating by vehicle.

Figures 2 and 3 compare key demographics between fatalities from Hurricane Florence and a historical analysis of fatalities due to tropical cyclones in Australia from 1970 to 2015 by Coates, et al. (2017). Our analysis of deaths resulting from Hurricane Florence demonstrates a consistent gender distribution with Australian historical data. This supports the conclusion that males are more likely to be in hazardous situations or undertake risky behaviours than females in these types of events. However, the two data sets differ markedly in age demographics, with much younger victims in Australia than Hurricane Florence.

Figure 2: Comparison of Hurricane Florence fatalities by age with historical Australia cyclone fatalities (Coates, 2018)
Figure 3: Comparison of Hurricane Florence fatalities by gender with historical Australia cyclone fatalities (Coates, 2018)

References

The Independent, 2018. Hurricane Florence: Residents ignore evacuation orders in North Carolina ‘hoping God protects us’ as storm hits. The Independent. [Online] Available at: https://www.independent.co.uk/news/world/americas/hurricane-florence-nc-residents-evacuation-god-north-carolina-evacuate-storm-a8536611.html [Accessed 3 December 2018]

VOA, 2018. What’s Happening: Florence by the Numbers. VOA News. [Online] Available at: https://www.voanews.com/a/whats-happening-florence-by-the-numbers/4573595.html [Accessed 3 December 2018]

CoreLogic, 2018. The Aftermath of Hurricane Florence is Estimated to Have Caused Between $20 Billion and $30 Billion in Flood and Wind Losses, CoreLogic Analysis Shows. CoreLogic. [Online] Available at: https://www.corelogic.com/news/the-aftermath-of-hurricane-florence-is-estimated-to-have-caused-between-20-billion-and-30-billion-in-flood-and-wind-losses-cor.aspx [Accessed 4th December 2018]

Coates, L., Haynes, K., Radford, D., D’Arcy, R., Smith, C., van den Honert, R., Gissing, A. 2018. An analysis of human fatalities from cyclones, earthquakes and severe storms in Australia. Report for the Bushfire and Natural Hazard Cooperative Research Centre.

Queensland bushfires 2018

Mingzhu Wang, Lucinda Coates and Thomas Mortlock.

In 2018, Queensland had the third-warmest spring and forth-warmest November on record, in terms of mean temperature (BoM, 2018d). At the end of November, exceptional heat affected eastern Queensland, with some locations reaching their highest annual maximum temperatures ever recorded. Wildfires raged across central Queensland and more than 140 fires were burning throughout the State during the last week of November (BoM, 2018d), due to a combination of the prolonged heatwave and other “unprecedented” conditions. More than a million hectares have been burnt out, with 15 dwellings and more than 60 sheds or other structures being reported as damaged (Caldwell, 2018). Given the human population in the affected area, casualties were light: one man died after being hit by a falling tree while clearing a firebreak at Rolleston in the Central Highlands. All the threatening fires were contained by 5 December, with weather conditions easing due to severe storms sweeping across Queensland. Figure 1 shows all the fire hotspots for Queensland from 26 November to 5 December.

Figure 1. Recorded fire hotspots derived from VIIRS imagery for Queensland from 26 November to 5 December. Data Source: Geoscience Australia (2018)

Record-breaking heatwave and catastrophic fire risk

Extreme heatwave conditions started developing in far north Queensland from 23 November 2018, and then spread across the north-east and central regions of the State (Figure 2). This heatwave was unusual as the temperatures were 5-10 °C above the November average, the humidity was exceptionally low for this time of year and the extreme hot conditions extended over a much longer period than “usual” heatwaves. The above-average temperature and unseasonally dry and hot westerly winds led to severe to locally extreme fire danger over large parts of eastern Queensland. The fire danger conditions peaked on 28 November, reaching a catastrophic level for the Capricornia, Central Highlands and Coalfields regions (Figure 3). Cairns hit 42 °C two days (27 & 28 November) in a row, which are the hottest days on record for the region in November.

Figure 2. Three-day heatwave assessment from 27 November to 29 November. Source: BoM (2018b)
Figure 3. Fire danger rating map for Queensland on 28 November. Source: BoM_QLD (2018)

According to Phoenix fire simulation technology (Figure 4), about 8,000 residents needed to be evacuated from Gracemere, west of Rockhampton. The town was subsequently saved, using a combination of water bombing aircraft and fire-fighting crews on the ground. Another significant bushfire originating in the Deepwater National Park on the central Queensland coast burnt out more than 17,000 hectares and forced hundreds of people to evacuate (Figure 5). This Deepwater blaze was extremely dangerous due to erratic wind direction changes, high fuel loads and low humidity, having a 66-kilometre perimeter and flames up to 10 metres in height (Ferrier et al., 2018).

Figure 4. The predicted fire burning pathways through Gracemere. Source: Doman (2018)
Figure 5. False colour Sentinel 2 image showing the burnt areas in black at Deepwater on 26 November. Source: Sentinel Hub (2018)

Comparison with previous bushfire events in Queensland in Risk Frontiers’ natural hazards database (PerilAUS) show that bushfire events around Brisbane, in 1994, also occurred after a heatwave. However, no event in PerilAUS has ever covered such a vast expanse of Queensland as this recent one. And there have been relatively few properties lost in any previous fires.

Connected systems

As discussed in our Briefing Note 381, a heavy rain event on 28 November affected the Illawarra, Sydney Metropolitan and Central Coast areas in New South Wales. At the same time, Queensland was suffering extreme heatwave and fire danger conditions (Figure 6). Sarah Fitton of BoM indicated these two contrasting events were driven by connected systems (Doyle, 2018). Figure 7 shows that the abnormal westerly flow to the north of the low was responsible for the catastrophic fire danger ratings along the tropical QLD coast and it extended down into the low-pressure system across the New South Wales south coast. The two events were linked and influencing each other. The low over New South Wales was pushing warm air and stronger winds to Queensland through the connected system, intensifying fire danger conditions (Yeo, 2018).

Figure 6. Australian daily maximum & minimum temperature & rainfall extreme area maps on 28 November. Source: BoM (2018a)
Figure 7. The connected low-pressure systems that drove the heavy rain event in New South Wales and Queensland catastrophic fire conditions on 28 November. Source: BoM (2018c)

Conclusions

When considering these recent fire events in Queensland, it is clear that the catastrophic fire risk is substantially influenced by record extreme weather events. Clarke et al. (2012) has shown increased fire weather conditions in Australia since the 1970s. Unprecedented conditions may become a new normal and peril factors correlating together can worsen local situations.

Risk Frontiers is currently building a new bushfire model using the latest remote sensing technologies and machine learning models. This model, along with Risk Frontiers’ loss models for other meteorological disasters, will soon be correlated on the Multi-Peril Workbench to better price cascading hazards.

References

Bureau of Meteorology [BoM] (2018a), Australian daily maximum temperature extreme area maps, available at http://www.bom.gov.au/cgi-bin/climate/extremes/extreme_maps.cgi, accessed 08/12/18.

Bureau of Meteorology [BoM] (2018b), Heatwave Service for Australia, available at http://www.bom.gov.au/australia/heatwave/, accessed 27/11/18.

Bureau of Meteorology [BoM] (2018c), Latest colour mean sea-level pressure analysis, available at http://www.bom.gov.au/australia/charts/synoptic_col.shtml, accessed 29/11/18.

Bureau of Meteorology [BoM] (2018d), Queensland in November 2018: Exceptional heat along the east coast at the end of the month, available at http://www.bom.gov.au/climate/current/month/qld/summary.shtml, accessed 08/12/18.

Bureau of Meteorology, Queensland [BoM_QLD] (2018), Fire Danger Rating, available at https://pbs.twimg.com/media/DtEJBfxX4AMVgg-.jpg, accessed 27/11/18.

Caldwell, F. (2018), Almost $1 million in hardship grants paid to bushfire victims, The Sydney Morning Herald, available at https://www.smh.com.au/politics/queensland/almost-1-million-in-hardship-grants-paid-to-bushfire-victims-20181205-p50kes.html?ref=rss&utm_medium=rss&utm_source=rss_feed, accessed 08/12/18.

Clarke, H., Lucas, C., & Smith, P. (2012), Changes in Australian fire weather between 1973 and 2010. International Journal of Climatology, 33(4), 931-944

Doman, M. (2018), From space, the ferocity of Queensland’s bushfires is revealed, ABC, available at https://www.abc.net.au/news/2018-12-08/from-space,-the-ferocity-of-queenslands-bushfires-is-revealed/10594662, accessed 08/12/18.

Doyle, K. (2018), Sydney weather and Queensland bushfire extremes have a common thread, ABC, available at https://www.abc.net.au/news/2018-11-28/sydney-weather-and-queensland-bushfires-linked/10561792, accessed 08/12/18.

Ferrier, T., Layt, S., & Kohlbacher, S. (2018), The Australian, available at https://www.theaustralian.com.au/news/latest-news/locals-flee-as-qld-blaze-threatens-homes/news-story/ea2cf27bd8aa724b380d71177bf7fc6c, accessed 08/12/18.

Geoscience Australia (2018), Historic Hotspot data, available at https://sentinel.ga.gov.au/#/, accessed 08/12/18.

Sentinel Hub (2018), EO Browser, available at https://apps.sentinel-hub.com/eo-browser/?lat=-24.2823&lng=151.7881&zoom=11&time=2018-11-26&preset=2_FALSE_COLOR&datasource=Sentinel-2%20L1C, accessed 08/12/18.

Yeo, C. (2018), Sydney storms could be making the Queensland fires worse, The Conversation, available at https://theconversation.com/sydney-storms-could-be-making-the-queensland-fires-worse-107789, accessed 08/12/18.

 

 

 

 

 

 

 

 

 

Sydney Harbour beach erosion – actions of the sea or stormwater runoff?

Thomas Mortlock, Barry Hanstrum and Mingzhu Wang

The heavy rain event on 28 November 2018 caused widespread flooding in the Illawarra, Sydney Metro and Central Coast areas, with some suburbs experiencing up to 61 mm in 30 minutes in Mosman, over 100 mm in two hours in the Sydney CBD and lower north shore, and 130 mm in 24 hours in Mosman. This type of springtime flash flooding is not uncommon, but is often associated with urban surface water flooding, and not coastal erosion.

From a coastal perspective, it raises an interesting question for erosion of Sydney’s North Shore and Middle Harbour beaches. These areas include some of Sydney’s most expensive residential and commercial property, and are usually regarded as protected, low wave energy beach locations with minimal erosion risk.

However – as demonstrated over the past few days – erosion can occur at these locations, and not necessarily due to waves from the seaward side but from urban stormwater runoff from the landward side (or to complicate things, a combination of both). The primary cause of erosion and consequential infrastructure damage can be important with regards to insurance against ‘actions of the sea’.

Rain then wind then waves

The 28 November rain event developed from a NW-SE oriented trough over the continent, with several low-pressure cells developing 1 – 2 days prior to 28 November (Figure 1, A – C). The deepest of these was centered over coastal NSW, reaching a moderate 994 hPa by the morning of 28 November (Figure 1, D).

The first front and associated rainfall (blue dotted line in Figure 1) passed over the Sydney Harbour area in the early morning of 28 November (6 to 8 AM). There was a maximum of 130 mm of rain in Mosman and 111 mm at The Rocks (Observatory Hill) – more than a month’s volume for these areas. A second front affected Western Sydney in the afternoon of 28 November (Figure 1 F) but did not significantly impact habour beach locations.

Winds were not a key feature of this event and peaked a few hours after the most intense rainfall was experienced on the North Shore – reaching just below 50 km/hr at 10:30 AM on 28 November (BoM Observatory Hill, BoM 2018b).

As the low-pressure cell moved offshore (Figure 1, G – H), rain and wind dropped while wave heights at the open coast began to rise (Figure 1). Observations at the Sydney wave buoy, located approximately 30 km off Narrabeen on Sydney’s Northern Beaches, show waves from the SE peaked in the late afternoon of 28 November, with maximum wave heights reaching between 7 and 10 m (Figure 2).

Figure 1. Synoptic evolution of the 28 November 2018 rain event in 6-hourly intervals from 11 AM on 27 November to 5 AM on 29 November. Images modified from BoM (2018a).
Figure 2. Wave height and direction observed at the Sydney wave buoy off Narrabeen through the 28 November rain event. Source: Manly Hydraulics Lab (2018).

A different type of East Coast Low

The 28 November event was an East Coast Low (ECL) – but not the type normally associated with coastal erosion. It developed from a continental / inland trough low, typical of a spring-time ECL (Browning and Goodwin, 2013), whereas most highly erosive ECLs occur in the winter months and have a more meridional (shore-parallel) track. The severe weather, while very intense was short lived because of the steady movement of the low.

The heavy rain was driven by intense thunderstorms that formed in the northwest of the Sydney Basin and tracked southeast. According to design rainfall depths, there is only a 1 % chance of this intensity of rainfall on the Lower North Shore (up to 61 mm in 30 minutes in Mosman) occurring in any one year (ARR, 2016). The intense rainfall was probably a result of cooler-than-normal land surface temperatures on the coast and relatively mild ocean temperatures, resulting in strong convection and rainfall (Browning pers. comms.).

This particular event had the characteristics of an extra-tropical cyclone and was driven by the dynamics of the upper atmosphere in a similar way to the mechanism for classic ECL development. Rain and wind were to the south of the centre of the low with clear sky and westerlies to the north.

It was a very unusual weather pattern for late November – the abnormal westerly flow to the north of the low was responsible for the record maximum temperature along the tropical QLD coast and catastrophic fire danger ratings. It’s very hard to get strong surface westerlies at these latitudes at this time of the year. The reason for this may be the unusual amount of Antarctic sea ice for this time of year (Goodwin, pers. comms.), which acts to displace the atmospheric cells in the Southern Hemisphere equatorward.

Causes of coastal erosion

In Sydney Harbour, the main cause of beach erosion was urban stormwater runoff (overland and drainage), not waves – an important distinction for insurance. Balmoral Beach in Mosman is a good example of the vulnerability of these largely protected, low wave energy coastal sites to this type of erosion. A steep, urbanized hinterland directly behind the beachfront led to high flow volumes running down several ‘urban rivers’ towards the beach (Figure 3). This washed out beach sand from the landward side, causing flooding and some significant erosion in places (Figure 4).

Figure 3. Conceptual plot of stormwater runoff-induced erosion at Balmoral Beach on 28 November 2018. Erosion hotspots correspond to lowest drainage points. Inset shows an example of an ‘urban river’ down a steep catchment in Neutral Bay.

It is possible for beaches in Middle Harbour to experience wave-driven coastal erosion. If wave heights outside Sydney Harbour are large, and the wave direction is from the SE, wind-waves can refract into Middle Harbour beaches and cause erosion. Interestingly, even beaches deeper in the harbour can experience erosion during ECLs without being directly exposed to the ocean wind waves. This (hypothetically – not tested) occurs through the propagation of infragravity wave energy – very long period, low amplitude waves that can bounce off headlands to reach otherwise protected locations. This type of wave energy is not detected by conventional wave buoys and is often associated with phenomena such as surf-beat or tsunamis. An example of this was during the April 2015 ECL, when Clontarf Beach – located deep inside Middle Harbour next to Spit Bridge – suffered severe erosion which may have been related to infragravity waves.

Figure 4. Erosion at Balmoral Beach caused by stormwater runoff. The beach level used to be at the height of the drainage covers in (A). Photos taken by author on 29/11/18.

Conclusion

Springtime ECLs are most commonly associated with flash flooding, and not coastal erosion because of the predominantly zonal track and limited wind and wave component of these events. 28 November, however, was a reminder that coastal erosion is not just caused by ‘actions of the sea’ but can result from a combination of heavy rainfall and a steep, urbanized hinterland. Fortunately, this type of rainfall is often localized – but it can lead to beach loss and infrastructure damage in some surprising places.

Risk Frontiers is currently building an East Coast Low loss model to assist insurers to price risk during these types of events.

References

Australian Rainfall Runoff [ARR] (2016), Design Rainfalls, available at http://www.bom.gov.au/water/designRainfalls/revised-ifd/?year=2016, accessed 30/11/18.

Browning, S. and Goodwin, I.D. (2013), Large scale influences on the evolution of winter subtropical maritime cyclones affecting Australia’s east coast. Monthly Weather Review, 141, 2416-2431.

Bureau of Meteorology [BoM] (2018a), Latest colour mean sea-level pressure analysis, available at http://www.bom.gov.au/australia/charts/synoptic_col.shtml, accessed 29/11/18.

Bureau of Meteorology [BoM] (2018b), Latest weather observations for Sydney – Observatory Hill, available at http://www.bom.gov.au/products/IDN60801/IDN60801.94768.shtml, accessed 29/11/18.

Manly Hydraulics Lab [MHL] (2018), Sydney offshore wave height, period and direction, available at https://www.mhl.nsw.gov.au/data/realtime/wave/Buoy-syddow, accessed 29/11/18.

 

Key Conclusions of the U.S. National Climate Assessment 2018

Paul Somerville and Thomas Mortlock, Risk Frontiers

Figure 1 The US Government’s Fourth National Climate Assessment Report

The U.S. federal government on Friday 23 November released a long-awaited report (NCA4) with an unmistakable message: the effects of climate change, including deadly wildfires, increasingly debilitating hurricanes and heat waves, are already battering the United States, and the danger of more such catastrophes is worsening. The report’s authors, who represent numerous federal agencies, say they are more certain than ever that climate change poses a severe threat to Americans’ health and pocketbooks, as well as to the country’s infrastructure and natural resources. And while it avoids policy recommendations, the report’s sense of urgency and alarm stands in stark contrast to the lack of any apparent plan from President Trump to tackle the problems, which, according to the government he runs, are increasingly dire.

The congressionally mandated document, the first of its kind issued during the Trump administration, details how climate-fueled disasters and other types of changes are becoming more commonplace throughout the country and how much worse they could become in the absence of efforts to combat global warming.

The Fourth National Climate Assessment (NCA4) contains two volumes. Volume II draws on the founda­tional science described in Volume I, the Cli­mate Science Special Report (CSSR). Volume II focuses on the human welfare, societal, and environmental elements of climate change and variability for 10 regions and 18 national top­ics, with particular attention paid to observed and projected risks, impacts, consideration of risk reduction, and implications under dif­ferent mitigation pathways. Where possible, NCA4 Volume II provides examples of actions underway in communities across the United States to reduce the risks associated with cli­mate change, increase resilience, and improve livelihoods.

The report concludes that Earth’s climate is now changing fast­er than at any point in the history of modern civilization, primarily as a result of human activities. The impacts of global climate change are already being felt in the United States and are projected to intensify in the future—but the severity of future impacts will de­pend largely on actions taken to reduce greenhouse gas emissions and to adapt to the changes that will occur. The following summary information is excerpted from the report.

1.  Key Scientific Advances

The following scientific advances have been made since the previous assessment (NCA3) in 2014.

Detection and Attribution: Significant advances have been made in the attribution of the human influence for individual climate and weather extreme events.

Extreme Events and Atmospheric Circulation: How climate change may affect specific types of extreme events in the United States and the extent to which atmospheric circula­tion in the midlatitudes is changing or is projected to change, possibly in ways not captured by current climate models, are important areas of research where scientific understanding has advanced.

Localized Information: As computing resources have grown, projections of future climate from global models are now being conducted at finer scales (with resolution on the order of 15 miles), providing more realistic characterization of intense weather systems, including hurricanes. For the first time in the NCA process, sea level rise projections incorporate geographic variation based on factors such as local land subsidence, ocean currents, and changes in Earth’s gravitational field.

Ocean and Coastal Waters: Ocean acidification, warming, and oxygen loss are all increas­ing, and scientific understanding of the severity of their impacts is growing. Both oxygen loss and acidification may be magnified in some U.S. coastal waters relative to the global average, raising the risk of serious ecological and economic consequences.

Rapid Changes for Ice on Earth: New observations from many different sources confirm that ice loss across the globe is continuing and, in many cases, accelerating. Since NCA3, Antarctica and Greenland have continued to lose ice mass, with mounting evidence that mass loss is accelerating. Observations continue to show declines in the volume of mountain glaciers around the world. Annual September minimum sea ice extent in the Arctic Ocean has decreased at a rate of 11%–16% per decade since the early 1980s, with accelerating ice loss since 2000. The annual sea ice extent minimum for 2016 was the second lowest on record; the sea ice minimums in 2014 and 2015 were also among the lowest on record.

Potential Surprises: Both large-scale shifts in the climate system (sometimes called “tip­ping points”) and compound extremes have the potential to generate outcomes that are difficult to anticipate and may have high consequences. The more the climate changes, the greater the potential for these surprises.

2. Extreme Events

Climate change is altering the characteristics of many extreme weather and climate-related events. Some extreme events have already become more frequent, intense, widespread, or of longer duration, and many are expected to continue to increase or worsen, presenting substantial challenges for built, agricultural, and natural systems. Some storm types such as hurricanes, tornadoes, and winter storms are also exhibiting changes that have been linked to climate change, although the current state of the science does not yet permit detailed understanding. Individual extreme weather and climate-related events—even those that have not been clearly attributed to climate change by scientific analyses—reveal risks to society and vulnerabilities that mirror those we expect in a warmer world. Non-climate stressors (such as land-use changes and shifting demograph­ics) can also amplify the damages associated with extreme events. The National Oceanic and Atmospheric Administration estimates that the United States has experienced 44 billion-dollar weather and climate disasters since 2015 (through April 6, 2018), incurring costs of nearly $400 billion (https://www.ncdc.noaa.gov/billions/).

3. Reducing Risks through Adaptation Actions

Key Message 1: Adaptation Implementation Is Increasing Adaptation planning and implementation activities are occurring across the United States in the public, private, and nonprofit sectors. Since the Third National Climate Assessment, implementation has increased but is not yet commonplace.

Key Message 2: Climate Change Outpaces Adaptation Planning Successful adaptation has been hindered by the assumption that climate conditions are and will be similar to those in the past. Incorporating information on current and future climate conditions into design guidelines, standards, policies, and practices would reduce risk and adverse impacts.

Key Message 3: Adaptation Entails Iterative Risk Management Adaptation entails a continuing risk management process; it does not have an end point. With this approach, individuals and organizations of all types assess risks and vulnerabilities from climate and other drivers of change (such as economic, environmental, and societal), take actions to reduce those risks, and learn over time.

Key Message 4: Benefits of Proactive Adaptation Exceed Costs Proactive adaptation initiatives—including changes to policies, business operations, capital investments, and other steps—yield benefits in excess of their costs in the near term, as well as over the long term. Evaluating adaptation strategies involves consideration of equity, justice, cultural heritage, the environment, health, and national security.

Key Message 5: New Approaches Can Further Reduce Risk Integrating climate considerations into existing organizational and sectoral policies and practices provides adaptation benefits. Further reduction of the risks from climate change can be achieved by new approaches that create conditions for altering regulatory and policy environments, cultural and community resources, economic and financial systems, technology applications, and ecosystems.

References

USGCRP, 2017: Climate Science Special Report: Fourth National Climate Assessment, Volume I. Wuebbles, D.J., D.W. Fahey, K.A. Hibbard, D.J. Dokken, B.C. Stewart, and T.K. Maycock, Eds. U.S. Global Change Research Program, Washington, DC, USA, 470 pp.
https://science2017.globalchange.gov/downloads/CSSR2017_FullReport.pdf.

USGCRP, 2018: Impacts, Risks, and Adaptation in the United States: Fourth National Climate Assessment, Volume II: Report-in-Brief [Reidmiller, D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K. Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research Program, Washington, DC, USA, 186 pp.

Quarterly Newsletter November 2018

Climate science, economics and politics

Thomas Mortlock and Ryan Crompton

The science

Twenty-eight years on from the First Assessment Report in 1990, the IPCC’s most recent Special Report on Global Warming delivers an urgent warning to policymakers that we are reaching the point of no return for mitigating anthropogenic impacts on global warming and associated climate change. The report has divided opinion in Australia and further highlights the discord between climate science, economics and politics nationally.

The report finds that limiting global warming to 1.5°C would now require rapid and unprecedented change in all aspects of society. The report highlights that we are already seeing the consequences of 1°C of global warming through more extreme weather, rising sea levels and diminishing Arctic sea ice.

While 1.5°C may seem a small increase, it is how changes in mean temperatures are related to extreme weather events that is important.

A small increase in the mean temperature also shifts the tails of the distribution, meaning it may impact extreme weather events that are temperature-dependent. However, any relationship between increasing mean global air temperature and extreme weather will be complex, and both peril and location-dependent.

Prof Andy Pitman, from the University of New South Wales and Director of the ARC Centre of Excellence for Climate Extremes, described this in an anecdote to BBC News back in January:

“the probability works a bit like if you stand at sea level and throw a ball in the air, and then gradually make your way up a mountain and throw the ball in the air again. The chances of the ball going higher increases dramatically. That’s what we’re doing with temperature.”

As an industry partner of the ARC Centre of Excellence, Risk Frontiers are looking to couple their cat modelling infrastructure to downscaled climate change projections to model the impacts on a peril-by-peril basis for business.

The economics

A day after the IPCC report was published, the Royal Swedish Academy of Sciences awarded William Nordhaus and Paul Romer the Nobel Memorial prize for economics for their work on climate change and economic growth.

Since the 1970s, Prof. Nordhaus has been warning governments that their economic models were not properly taking into account the impact of global warming. Similarly, Prof. Romer developed the “endogenous growth theory”: the notion that countries can improve their underlying performance if they concentrate on supply-side measures such as research and development, innovation and skills. He argues that the creation and spread of ideas – whether that be around climate change or otherwise – is necessary for economic growth.

Understanding the economic costs of climate-related damages is essential to answering the question of how much society should be willing to pay to avert that damage (The Economist, 2018). Prof. Nordhaus’ work addresses this issue by modelling the economic harm of carbon emissions, thus allowing him to estimate the likely economic costs of the different IPCC Representative Concentration Pathways (RCPs).

Prof. Romer believes it is perfectly possible for global warming to be kept to a maximum of 1.5°C:

“Once we start to try to reduce carbon emissions, we’ll be surprised that it wasn’t as hard as we anticipated. The danger with very alarming forecasts is that it will make people feel apathetic and hopeless. One problem today is that people think protecting the environment will be so costly and so hard that they want to ignore the problem and pretend it doesn’t exist.”

The politics

The IPCC report is published at a time of international discord on climate mitigation, with most scientists acknowledging that the likelihood of achieving a plateau at the proposed 1.5 °C is very small. This is essentially a reflection on the myopic nature of global political institutions, and the opposing long-term nature of the problem at hand.

It also highlights the divisive nature of climate change in Australia. As elsewhere, it has become entangled with political agendas, class, energy and living standards. However, unlike elsewhere, adaptation to climate change has yet to occupy an ongoing, cross-party role in government policy as it has done, for example, in Europe. It has exposed an interesting divide between sectors that has come to the fore in recent years – with banking, insurance and industry at large leading the charge in understanding climate change risk and exposures. APRA, the Australian Prudential Regulation Authority, has ensured momentum here when in February 2017 Geoff Summerhayes declared climate change can no longer be considered a future financial risk:

“While climate risks have been broadly recognised, they have often been seen as a future problem or a non-financial problem. The key point I want to make today, and that APRA wants to be explicit about, is that this is no longer the case. Some climate risks are distinctly ‘financial’ in nature. Many of these risks are foreseeable, material and actionable now. Climate risks also have potential system-wide implications that APRA and other regulators here and abroad are paying much closer attention to.”

The bottom line

The global impasse on mitigation efforts only serves to highlight the importance of climate change adaptation planning and risk management in Australia. We’ll need to continue to adjust to the effects of climate change in the absence of addressing the underlying sources, but, ideally, we’d do both. If we believe the economics of the two most recent Nobel prize recipients, this may not be as costly as we think.

References

APRA (2017). Australia’s new horizon: climate change challenges and prudential risk. Geoff Summerhayes, Executive Member – Insurance Council of Australia Annual Forum, Sydney.

BBC News (2018). How Australia’s extreme heat might be here to stay. BBC News article by Adam Morton, Hobart, 13 January 2018.

IPCC (2018). The special report on global warming of 1.5°C: summary for policymakers.

The Economist (2018). The Nobel prize for economics is awarded for work on the climate and economic growth. Economist Business and Finance article, 8 October 2018.


Responses to the Lombok Earthquake, 2018 – Rapid Assessment Study

Jonathan van Leeuwen, Andrew Gissing and Ashley Avci

The recent earthquake that occurred in Lombok in August, 2018, presented an opportunity to study the responses of those affected in the immediate aftermath of the event. We find that tourists caught up in disasters are uniquely vulnerable. Few followed the encouraged actions of what to do in the event of an earthquake and most were reliant on local residents and tourist operators for advice. This article summarises the earthquake and how people responded and provides some reflections for policy makers.

Background

The island of Lombok is located in the Nusa Tenggara Barat Region of Indonesia. It lies on the boundary between the Australian Plate and the Sunda Plate, which has produced numerous powerful earthquakes in the past. The region is a popular tourist destination, with rapidly increasing numbers of visitors since developed countries lifted travel warnings following the 2002 and 2005 Bali bombings and the SARS (severe acute respiratory syndrome) outbreak between 2002 and 2004. Tourism is a major source of income for Lombok and the neighbouring Bali and Gili Islands, with millions of visitors from around the world each year.

The August 5, 2018, Mw6.9 earthquake occurred as the result of shallow thrust faulting on or near the Flores Back Arc Thrust. The earthquake occurred in a subduction plate boundary region where the Sunda and Australia plates converge (USGS, 2018). In the region surrounding the location of the earthquake, there have been six other events of Mw6.5 or larger over the previous century. Four of these are likely to have occurred on the Back Arc Thrust system: a Mw6.5 in the Bali region to the west of Lombok in July 1976 and three events of Mw6.5, Mw6.5 and Mw6.6 in the Sumbawa region to the east of Lombok in November 2007 and November 2009. The Sumbawa earthquakes were associated with several deaths, hundreds of injuries and the destruction of hundreds of houses. This history of recent earthquakes means that locals would have been familiar with the impacts of damaging earthquakes.

Figure 1: Earthquake location with regional context

The earthquake occurred at a depth of 31.0km, centred at the northern tip of Lombok. The local time was 7:46pm. It was preceded by a main foreshock on July 29, 2018 of Mw6.4, and numerous aftershocks including a Mw5.9 event on August 9, 2018 (USGS, 2018). The earthquake caused severe shaking in Lombok and surrounding islands, including Bali and the Gili Islands, and was felt as far as Sumbawa in the east (Cochrane, 2018) and Trenggalek Regency in the west (Solichah, 2018). Following the earthquake, tsunami warnings were issued: however, the maximum expected height was only half a metre and the warning was later cancelled.

Most of those affected by the earthquake were in North Lombok, East Lombok and Mataram City. Reports indicated that there were 392 fatalities, 1,353 injuries and damage to 67,875 houses, 606 schools, six bridges, three hospitals, ten health centres, 15 mosques, 50 prayer rooms and 20 office units (Badan Nasional Penanggulangan Bencana, 2018).

It is important for emergency managers to have an understanding of human behaviour during extreme events so that they can best develop their plans. In an effort to understand the behaviour of tourists and others following the earthquake, researchers from Risk Frontiers conducted a rapid assessment study utilising media analysis containing interviews with survivors. The method involved locating some 120 news articles sourced from a variety of online international, national and local media outlets. From these articles, interviews with 146 people who experienced the earthquake were extracted and analysed to identify damage that occurred and how people behaved during and after the earthquake.

Results

A significant majority of interviewees were tourists (n=102), who conducted interviews with media outlets from their home countries either remotely or after returning home. Other interviews included local residents (n=20) and expats (n=9), with a further ten not stating where they were from.

At the time of the earthquake, interviewees were located on the island of Bali, approximately 50km to the east of Lombok (n=54); on Lombok (n=40); on the Gili Islands (n=28) and at other locations in the area (n=3). Twenty of those interviewed did not state where they had been at the time of the earthquake.

The interviewees came from a variety of nations, including Australia (n=38), Indonesia (n=25), Britain (n=23), Ireland (n=9), New Zealand (n=8), America (n=7), Singapore (n=5), France (n=4), South Africa (n=3), Canada (n=2), and one interviewee each from Africa (country unstated), Belgium, Denmark, the Netherlands, Malta, Pakistan and Spain. The age of interviewees was captured either by statement in the article or by approximation if a photo was available. Of those interviewed, 99 were categorised between 18 and 60 years old. Three were recorded as above 60 years old, and one was less than 18.

Most interviewees said they were with other adult/s when the earthquake occurred (n=51), or with both children and adult/s (n=24). Ten interviewees said they were with someone but didn’t specify their age/s and nine said they were alone.

In relation to their location at the time of the earthquake, interviewees stated that they were at a restaurant (n=29), in a hotel (size not stated) (n=14), at home and awake (n=9), in a single storey hotel (n=8), in a multi storey hotel (n=7), at home and asleep (n=3), in a shop or shopping centre (n=3), at the beach (n=2), on a footpath (n=2), in a car (n=1) or on a boat (n=1).

Consequences the interviewees observed from the earthquake included collapsed buildings (n=45), debris/objects falling (n=25), injuries (n=23), power cuts (n=22), loss of water from swimming pools (n=15), cracked walls (n=13), food shortages (n=11), deaths (n=11), water shortages (n=6), broken glass (n=4), downed cables (n=4), loss of sanitation (n=2), ground subsidence or uplift (n=1), flooding (n=1) and fires (n=1). Those located in Lombok and the Gili islands observed the most significant damage.

During the earthquake, interviewees most commonly reported, of their own behaviour, that they ran outside (n=43). Others reported that they dropped to the ground as they could not remain standing (n=5), sheltered under a table or bed (n=5), ran outside onto the beach (n=4), moved away from buildings (n=4), sheltered in doorways (n=3), deliberately dropped to the ground (n=2) or moved away from trees (n=2).

During the earthquake, interviewees observed others most commonly either running from buildings (n=44) or screaming (n=37). Other observed behaviours were crying (n=10), moving away from buildings (n=7), caring for others (n=4), running specifically to the beach (n=4), seeking shelter under tables or beds (n=3), holding onto objects or other people (n=3), panicking (n=3), seeking shelter under doorways (n=2), calling or messaging others (n=2) and dropping to the ground (n=1), reporting they could not stand.

Immediately after the earthquake, those interviewed moved to higher ground (fearing a tsunami) (n=29), sought advice on what to do from locals (n=9) or from hotel reception/staff (n=6), gave first aid to the injured (n=4), called or messaged someone (n=4), informed others of tsunami threat levels (n=3), climbed trees (fearing a tsunami) (n=3), searched for family member/s or friend/s (n=3), put on life jackets (fearing a tsunami) (n=2), assisted rescuing trapped person/s (n=2), were themselves incapacitated/requiring treatment (n=2) or extinguished fires (n=1).

Interviewees observed that immediately after the earthquake, others moved to higher ground (n=24), were screaming (n=12), panicking (n=11), caring for others (n=10), running (n=5), assisting the injured (n=5), crying (n=5), remaining on the beach (n=4), calling others (n=4), climbing trees (n=3), searching for others (n=3) or moving debris (n=1).

People said their actions immediately after the earthquake were directed by local residents (n=9), hotel staff (n=9), local authorities (n=3), other tourists (n=2) or by a minister of religion (n=1).

For those interviewees who said they contacted someone, contacts included their parent/s (n=8), other relative/s (n=3), friend/s (n=2), spouse/partner (n=2), children (n=1), authorities (n=1), neighbour/s (n=1) and a stranger (n=1). Six people contacted someone but did not specify who.

Many of those interviewed were not from countries which are associated with high earthquake risk. People’s previous experiences of earthquakes or education provided in their country of origin may have influenced some responses. This possibility is evidenced by the following responses:

“Everyone I spoke to just wants to get out but there’s not one free seat out of here today. About 90 per cent of us were westerners and we’re not trained for how to react in this situation.” (Interviewee from a country not prone to quakes) (Darvall and O’Shea, 2018).

“It’s scary when the ground is buckling under your feet. My partner and I were out of bed and under the table in a flash and we then immediately evacuated the house. When I was a child at school we had earthquake drills. Best training ever.” (Interviewee from a quake-prone country) (NZ Herald, 2018).

Descriptions of interviewees’ emotions during and immediately after the quake included feeling fearful (n=37), panicked (n=14), calm (n=9), concerned (n=7), upset (n=5), terrified (n=5), in shock (n=4), apathetic (n=2), surreal (n=2), and other (n=6). Some 83 interviewees did not state their emotions during and immediately after the quake.

Interviewees said they obtained information about tsunami risk from local residents (n=9), the internet (n=6), warning sirens (or the lack thereof) (n=4), social media (n=3), hotel staff (n=2), calling family or friends at home (n=2), other tourists (n=2), local authorities (n=2), observing the ocean (n=2) or overhearing other people (n=2).

Over subsequent days, a significant number of people said they evacuated soon after (n=29). Some stayed to assist rescue, medical or relief efforts (n=11), although these were mainly locals and expats.

The evacuation of tourists from the Gili Islands was said to be chaotic due to the combination of the lack of capacity to evacuate tourists and the fearful state of tourists and locals. There were reports of long waits, pushing and shoving and passage being offered to the highest bidders. Those interviewees who experienced the evacuation described it as:

“People were just throwing their suitcases on board and I had to struggle to get my husband on, because he was bleeding.” (Embury-Dennis, 2018).

“We just witnessed one of the boats get completely overfilled with tourists climbing on, with the officials trying to keep them back off the boat, pushing them and shoving them. That boat still hasn’t left yet.” (ABC News, 2018).

“People are punching and hitting each other.” (Osborne, 2018).

Discussion and conclusion

Many tourist destinations both within Australia and abroad are susceptible to a range of natural hazard risks. For example, some 26 Australians lost their lives during the Asian tsunami in 2004.

Often, many of the elements that make locations aesthetically appealing to tourists are associated with natural hazard risk. For example, warm, shallow seas and sandy islands make idyllic tropical resort getaways, but these places are often at risk from severe weather, while scenic mountain vistas are often the product of tectonic activity which causes earthquakes and volcanism.

Tourists are uniquely vulnerable. Tourists may be unaware of risks present at their destination, lack local support networks and encounter cultural and communication barriers. Research has previously shown that tourists behave differently to locals. During evacuations they tend not to shelter with family and friends, but seek shelter at public evacuation centres, simply return home or find another hotel (Drabek, 1999). Observations from the Lombok disaster support such conclusions: in particular, that many tourists simply leave soon after a disaster and are reliant on locals for direction.

Many of those interviewed ran from buildings or observed others running from buildings. This behaviour is in conflict with actions encouraged by international and local authorities, which promote the actions of drop, cover and hold.

Counter to some research that suggests that people do not panic in the aftermath of disasters (Lorenz et al. 2018), observations from this event show that panic and chaos can occur. This suggests that in more extreme and less predictable events, panic and chaos is likely or that tourists are more likely to panic. Such questions require further exploration.

Promotion of disaster risk by travel agents and tourism operators conflicts with wider tourism promotion. The Australian Department of Foreign Affairs does provide some details about natural hazard risk on its Smartraveller website, although more needs to be done than passively informing travellers. There could be an opportunity to engage with the medical profession and travel health clinics to promote natural hazard risk and safety behaviours at the time travellers seek travel health advice.

Finally, tourists in Australia are not immune from the impacts of natural hazards, as illustrated by the impacts of Cyclone Debbie in the Whitsunday Region. It is important that tourism operators are engaged regarding disaster preparedness and connected with disaster management structures.

References

ABC News (2018). Witness describes chaos when earthquake hit the Gili Islands. ABC News. 7 August 2018. [Accessed 8 Oct. 2018].

Badan Nasional Penanggulangan Bencana (2018). Korban Gempa Lombok Terus Bertambah, 392 Orang Meninggal Dunia. [online] Available at: https://www.bnpb.go.id/korban-gempa-lombok-terus-bertambah-392-orang-meninggal-dunia [Accessed 31 Aug. 2018].

Cochrane, J. (2018) Powerful Indonesia earthquake kills at least 82. The New York Times. 5 August 2018. [Accessed 10 Oct. 2018].

Darvall, K and O’Shea, M. (2018). ”I just want to get off the island now”: Bondi restaurant owner shares terrifying evacuation footage after earthquake hit Lombok while he was holidaying with his girlfriend. Daily Mail Australia. 6 August 2018. [Accessed 8 Oct 2018].

Drabek, T.E. (1999). Disaster evacuation responses by tourists and other types of transients. International Journal of Public Administrations, 22(5), pp.665-677.

Embury-Dennis, T. (2018). Lombok earthquake: tourists “forced to pay to board rescue ships”. The Independent. 6 August 2018. [Accessed 8 Oct. 2018].

Lorenz, D.F., Schulze, K. and Voss, M., (2018) Emerging citizen responses to disasters in Germany. Disaster myths as an impediment for a collaboration of unaffiliated responders and professional rescue forces. Journal of Contingencies and Crisis Management, 26 (3), pp.358-367.

Osborne, S. (2018). Lombok earthquake latest: tourists flee Indonesian island after powerful magnitude-7 quake kills at least 98. The Independent. 6 August 2018. [Accessed 8 Oct. 2018].

Solichah, Z. (2018). Warga Jember dan Banuwangi rasakan gempa Lombok. Antara News. 5 August 2018. [Accessed 10 Oct. 2018].

USGS (2018). M 6.9 – 0km SW of Loloan, Indonesia. [online] Available at: https://earthquake.usgs.gov/earthquakes/eventpage/us1000g3ub#executive [Accessed 31 Aug. 2018].

NZ Herald (2018). New Zealanders in Indonesia describe the violence of Lombok earthquake. NZ Herald. 8 August 2018. [Accessed 8 Oct. 2018].

The 2018 Lake Muir Earthquakes

Paul Somerville, Risk Frontiers.

A second earthquake with magnitude larger than 5 occurred today (November 9, 2018) near Lake Muir in southwestern Western Australia, and Geoscience Australia assigned it a magnitude of 5.4.  This earthquake, shown by the large red dot in Figure 1, occurred about 10 km southeast of the magnitude 5.7 earthquake that occurred on 17 September 2018.   The aftershocks of today’s earthquake, shown by small red dots in Figure 1, are located at the southern end of the aftershock zone of the September 17 event, shown by the yellow dots. Today’s earthquake was preceded by a series of foreshocks that occurred overnight, and was felt between Albany and Perth. The shaking intensities of the two earthquakes are shown in Figures 2 and 3.

Figure 1. Locations of earthquakes near Lake Muir. Source: Geoscience Australia
Figure 2. Shakemap of the 9 November Lake Muir earthquake. Source: USGS
Figure 3. Shakemap of the 17 September Lake Muir earthquake. Source: USGS

The orientation of the fault plane on which the 17 September earthquake occurred is shown on a Wulf net projection in Figure 4. This shows that the earthquake had a thrust mechanism on a fault plane striking east-northeast. The InSAR (interferometric Synthetic Aperture Radar) map in Figure 5 shows that the west side moved up and the east side moved down on a plane dipping down to the west-northwest.  The change in elevation along this dip direction is shown at the upper left of Figure 5.

Figure 4. Focal mechanism of the 17 September 2018 earthquake. Source: USGS
Figure 5. Uplift on the west side and subsidence on the east side of the fault that caused the 17 Sept 2018 earthquake. The uplift and subsidence profile along the line A-B as shown in the inset at top left.

The two earthquakes are shown by the yellow stars on a map of historical earthquake epicentres in the Southwest Western Australia Seismic Zone (SWWASZ) in Figure 6.  The contours show annual probability of events of magnitude 5 and above from QuakeAUS6. The two earthquakes occurred on the southwestern edge of the SWWASZ.

Figure 6. Locations of the Lake Muir earthquakes (yellow stars) on the southwestern edge of the Southwest Western Australia Seismic Zone. Source: QuakeAUS6

As described in our Briefing Note 373,  we have recently released our new probabilistic earthquake loss model for Australia, QuakeAUS 6.0. The updated model, developed by Dr Valentina Koschatzky with input from Risk Frontiers’ Chief Geoscientist, Dr Paul Somerville, incorporates Geoscience Australia’s recent revision of the Australian Earthquake Catalogue (Allen et al., 2017), which has more than halved the rate of earthquakes exceeding 4.5 in magnitude.  The main features of the new model are:

  • New Distributed Earthquake Source Model (based on RF analysis of the new GA catalogue – 2018)
  • Inclusion of an Active Fault Model
  • Updated Soil Classification (McPherson 2017)
  • Updated Soil Amplification Model (Campbell & Bozorgnia 2014)
  • Updated Variable Resolution Grid (VRG), Exposure & Market Portfolio
    (Gnaf_201802 + Nexis 9)

Mystery of the cargo ships that sink when their cargo suddenly liquefies


After the Christchurch earthquake sequence we are very aware of liquefaction and the large scale damage it was responsible for. It may come as a surprise to learn that liquefaction is a big safety issue for the shipping industry where it is sometimes called dry cargo liquefaction or dynamic separation. The article below was written by Susan Gourvenec a professor of offshore geotechnical engineering at the University of Southampton. It was printed in Ars Technica, a website covering news and opinions in technology, science, politics, and society. It publishes news, reviews, and guides on issues such as computer hardware and software, science, technology policy, and video games.


A lot is known about the physics of the liquefaction, yet it’s still causing ships to sink.

Boats carrying grain on the Great Lakes in November 1918

Think of a dangerous cargo, and toxic waste or explosives might come to mind. But granular cargoes such as crushed ore and mineral sands are responsible for the loss of numerous ships every year. On average, 10 “solid bulk cargo” carriers have been lost at sea each year for the last decade.

Solid bulk cargoes – defined as granular materials loaded directly into a ship’s hold – can suddenly turn from a solid state into a liquid state, a process known as liquefaction. And this can be disastrous for any ship carrying them – and its crew.

In 2015, the 56,000-tonne bulk carrier Bulk Jupiter rapidly sank around 300km south-west of Vietnam, with only one of its 19 crew surviving. This prompted warnings from the International Maritime Organization about the possible liquefaction of the relatively new solid bulk cargo bauxite (an aluminum ore).

A lot is known about the physics of the liquefaction of granular materials from geotechnical and earthquake engineering. The vigorous shaking of the Earth causes pressure in the ground water to increase to such a level that the soil “liquefies.” Yet despite our understanding of this phenomenon (and the guidelines in place to prevent it occurring), it is still causing ships to sink and take their crew with them.

Solid bulk cargoes

Solid bulk cargoes are typically “two-phase” materials, as they contain water between the solid particles. When the particles can touch, the friction between them makes the material act like a solid (even though there is liquid present). But when the water pressure rises, these inter-particle forces reduce and the strength of the material decreases. When the friction is reduced to zero, the material acts like a liquid (even though the solid particles are still present).

A solid bulk cargo that is apparently stable on the quayside can liquefy because pressures in the water between the particles build up as it is loaded onto the ship. This is especially likely if, as is common practice, the cargo is loaded with a conveyor belt from the quayside into the hold, which can involve a fall of significant height. The vibration and motion of the ship from the engine and the sea during the voyage can also increase the water pressure and lead to liquefaction of the cargo.

When a solid bulk cargo liquefies, it can shift or slosh inside a ship’s hold, making the vessel less stable. A liquefied cargo can shift completely to one side of the hold. If it regains its strength and reverts to a solid state, the cargo will remain in the shifted position and cause the ship to permanently tilt (or “list”) in the water. The cargo can then liquefy again and shift further, increasing the angle of list.

At some point, the angle of list becomes so great that water enters the hull through the hatch covers, or the vessel is no longer stable enough to recover from the rolling motion caused by the waves. Water can also move from within the cargo to its surface as a result of liquefaction and subsequent sloshing of this free water can further impact the vessel’s stability. Unless the sloshing can be stopped, the ship is in danger of sinking.

The International Maritime Organization has codes governing how much moisture is allowed in solid bulk cargo in order to prevent liquefaction. So why does it still happen?

The technical answer is that the existing guidance on stowing and shipping solid bulk cargoes is too simplistic. Liquefaction potential depends not just on how much moisture is in a bulk cargo but also other material characteristics, such as the particle size distribution, the ratio of the volume of solid particles to water and the relative density of the cargo, as well as the method of loading and the motions of the vessel during the voyage.

The production and transport of new materials, such as bauxite, and increased processing of traditional ores before they are transported, means more cargo is being carried whose material behavior is not well understood. This increases the risk of cargo liquefaction.

Commercial agendas also play a role. For example, pressure to load vessels quickly leads to more hard loading even though it risks raising the water pressure in the cargoes. And pressure to deliver the same tonnage of cargo as was loaded may discourage the crew of the vessel draining cargoes during the voyage.

What’s the solution?

To tackle these problems, the shipping industry needs to better understand the material behavior of solid bulk cargoes now being transported and prescribe appropriate testing. New technology could help. Sensors in a ship’s hold could monitor the water pressure of the bulk cargo. Or the surface of the cargo could be monitored, for example using lasers, to identify any changes in its position.

The challenge is developing a technology that is cheap enough, quick to install and robust enough to survive loading and unloading of the cargo. If these challenges can be overcome, combining data on the water pressure and movement of the cargo with information on the weather and the ship’s movements could produce a real-time warning of whether the cargo is about to liquefy.

The crew could then act to prevent the water pressure in the cargo rising too much, for example, by draining water from the cargo holds (to reduce water pressure) or changing the vessel’s course to avoid particularly bad weather (to reduce ship motions). Or if those options are not possible, the crew could evacuate the vessel. In this way, this phenomenon of solid bulk cargo liquefaction could be overcome, and fewer ships and crew would be lost at sea.


Susan Gourvenec is a professor of offshore geotechnical engineering at the University of Southampton. This article was originally published on The Conversation and has been lightly edited to conform to Ars Technica style guidelines. Read the original article.