Economic damage and spill-overs from Debbie 2017 Manfred Lenzen, Arunima Malik, Steven Kenway, Peter Daniels, Ka Leung Lam, Arne Geschke Background to the work Long term work (USyd, UQ, GU towards a higher-resolution Qld MRIO), for water, energy/GHG, analysis. High-resolution sub-state MRIO $ data for (1998) provided a good foundation. Workshop in Beechmont / Binna Burra Jan 2010! Stradbroke 2012. Nectar etc. Aim of this study The aim of this work was to understand the economic, (jobs, employment etc) impacts of cyclone Debby, in as rapid a way as possible. This was seen as a “gentle” entrée to the IELab and data incorporation (eg as financial constraints). Method adopted - overview 1. Build root to study region and sector aggregators. 2. Draft base table 3. Literature review of cyclone impact (media) ($m)*. 4. Create Draft Gamma Matrix (production possibilities lost) 5. Source superior economic data (various sources)*. 6. Incorporate superior data into IELab to produce final base table (separate presentation) 7. Impact analysis*, and 8. Interpretation*

*Focus of this presentation What is the “Gamma Matrix” – production possibilities lost?

Schulte in den Baumen, H., Moran, D., Lenzen, M., Cairns, I., Steenge, A., 2014. How severe space weather affects global supply chains. Nat. Hazards Earth Syst. Sci. 14, 1–10. Steps in producing the“Gamma Matrix”

(a) public information on actual or estimated financial damages (b) dividing these by gross output by sector and region (from MRIO base table. Information on damages included: • the reduction of total industry output (in 2017 compared to 2015), plus • an annualised value of infrastructure damage.

Schulte in den Baumen, H., Moran, D., Lenzen, M., Cairns, I., Steenge, A., 2014. How severe space weather affects global supply chains. Nat. Hazards Earth Syst. Sci. 14, 1–10. Literature review via the media Infrastructure is challenging! Annualised the negative impact of infrastructure as a fraction of Gross Operating Surplus (GOS), from the Base Table. Assumed that the damaged industries need a fraction of this surplus to replace capital (i.e. the infrastructure) over 25 years. Main infrastructure impacts were borne in sectors such as electricity, gas, water, trade, accommodation, cafes, restaurants, road transport, rail and pipeline transport, other transport, and communication services. For example, a damage of $50 million dollars of infrastructure impact, spread over 25 years, equalled $2 million of impact on GOS. This “infrastructure gamma fraction” was added to the reduction in total industry output of industries most influenced, to yield the total gamma fraction. Major Direct impacts Aspect Region Industries Example impact Coal exports All QLD Coal, oil and gas ~$1.5b. 22 mines halt production. Roads and ports shut.

Agriculture, grains All QLD regions and NSW Grains ~$1billion. and sugarcane Richmond & Tweed.

Sugar Cane QLD- Mackay Sugar cane growing ~150m

Vegetables QLD-Mackay Other agriculture ~100m (20% crop).

Other agriculture Vegetables NSW Richmond & Tweed ~ $8m (lost nut production). Sugar cane growing

Accommodation, Cafes, Business NSW Richmond & Tweed. 50-80% of businesses will not reopen in a community of 50,000 people. and Restaurants, Trade

Dairy QLD - Dairy cattle and pigs ~$6 m. The cost of recovery would 'be in the billions' of dollars, with roads, Infrastructure All QLD Multiple industries bridges, crops, homes and schools all needing serious repairs.

All 19 regions (with most focussed Insurance Multiple Industries Insurance losses $A306 million. Over a $1bill in insurance claims. on QLD and Northern NSW) Resultant Gamma Matrix – fraction of 2017 production lost Superior economic data incorporation into IElab 1. Seek key data (Salaries paid (Regional economic studies, govt reports, gross operating, reg. exports, reg. turnover (ind. reports)) 2. Prioritise data for entry (eg relevant to cyclone damages, current) 3. Code as datafeeds 4. Test datafeeds operating (ie T, V, Y changing as expected) - Separate presentation Peter Daniels and Ka Leung Lam Other Direct impacts •12 Fatalities. •25,000 residents evacuated in Mackay, and 5,5000 in Bowen. •400 schools closed. •Flights cancelled from March 27. Virgin Airlines losses in the 3 months to March $62.3 million was impacted by Cyclone Debbie. •QLD Rail suspended trains between Rocky and Townsville •NQ Bulk Ports closed at Mackay, Abbot Point and Hay Point. •1,000 emergency workers deployed, 200 workers. •1,200 personnel deployed. Superior Data Identified – and priority data used Geographical spread of the value-added loss from Cyclone Debbie Spill-overs: loss of value added and employment Spill-overs by region and sector – employment losses Spill-overs by region and sector – value added losses Discussion, Conclusions, Implications • Substantial higher-order supply-chain effects ~7,000 jobs lost directly, plus 5,000 jobs indirectly. • A large proportion of direct job losses were associated with flooding of businesses (not in cyclone landfall). • Frequency and intensity of tropical cyclones increase as a result of climate change. • Future work? Possible re-structuring production and supply-chain networks for resilience? Optimal recovery paths? Impacts beyond national borders? Discussion, Conclusions, Implications • Substantial higher-order supply-chain effects ~7,000 jobs lost directly, plus 5,000 jobs indirectly. • A large proportion of direct job losses were associated with flooding of businesses (not in cyclone landfall). • Frequency and intensity of tropical cyclones increase as a result of climate change. Discussion, Conclusions, Implications Review Recommendation 2: Business Continuity Planning should feature permanently in disaster management doctrine.

“Queensland Health has also identified that BCP needs to consider supply chains, and […staff etc…] to ensure functioning of critical services.” Implications… • Future work? • Possible re-structuring production and supply-chain networks for resilience? • Optimal recovery paths? • Impacts beyond national borders?