Australia Warns of Critical Financial Risks From Climate Change

Australia’s worsening climate change may see insurance companies and banks withdraw their services from communities vulnerable to extreme events, potentially triggering “cascading effects” across the economy, a new government report warned.

The government released its first National Climate Risk Assessment on Tuesday, highlighting 11 priority areas which were at “significant risk” from climate change, including water security, agriculture and economic resilience.

The assessment showed that pressures on Australia’s financial system from a surge in climate-related disaster claims could lead to a “plausible worst-case scenario” whereby insurers and lenders pull out of highly-exposed communities.

“Such a shock in the local financial ...