An Australian expert says global funds are being misallocated to deal with the wrong climate threats. 

Prof Andy Pitman, director of the Australian Research Council’s Centre of Excellence for Climate Extremes, says regulators are relying on models that forecast how average climates will change as the planet warms, but are less capable of predicting how extreme weather will imperil cities and other individual locales.

His new report in the journal Environmental Research: Climate follows the release of the Australian Prudential Regulation Authority’s corporate plan 2022-23, which says the regulator will “continue to ensure regulated institutions are well-prepared for the risks and opportunities presented by climate change”.

But Dr Pitman says APRA and other regulators are ill-equipped to assess the risks and regulate the ability of banks and other institutions to cope with them.

“Without a shadow of a doubt, we’re overestimating the cost of climate change in some areas and grossly underestimating it in others,” he says. 

“We need to take this issue seriously – not just access information flying around and think we can package it to do proper economic assessments.”

“If you’re going to throw billions or trillions of dollars around, you need to ensure that you’re getting the right scientific advice on how to interpret the climate information.

“I think that’s a no-brainer but [regulators] are not doing that.”

More details are accessible here.