Climate Crossroads: How a Warming Australia Puts Our Digital Future at Risk
Australia's technology sector is a dynamic powerhouse, contributing nearly $134 billion to the national economy in FY24 and employing over 1 million technology workers. It's the engine driving digital transformation and crucial for our nation's future growth. Yet, this vital sector faces an escalating threat: climate change. Australia has already warmed by 1.5°C since 1910, and the impacts are intensifying.
The recently published National Climate Risk Assessment (NCRA) provides a stark, unified understanding of the significant climate-related threats facing our nation. For us, as technology professionals, understanding these risks isn't just an abstract concern; it's critical for business continuity, innovation, and safeguarding Australia's digital future.
The Physical Perils: Our Digital Backbone Under Strain
Our digital economy relies heavily on robust infrastructure. Unfortunately, much of this is highly vulnerable to the climate hazards we're already experiencing and those projected to intensify.
Telecommunications on the Frontline: Telecommunications infrastructure is at a high risk from climate hazards such as extreme heat, bushfires, flooding, and extreme winds. These assets, especially near coastal areas, face significant exposure to severe and extreme events today.
Energy Outages Loom Large: Our energy infrastructure, which powers everything digital, is increasingly vulnerable to climate change impacts. Extreme heat events will lead to temperatures exceeding safe operating limits, forcing network operators to increase outages (load shedding). This means disruptions to energy supply precisely when it's most needed to keep systems cool and operational. Damage to energy infrastructure from bushfires, megafires, storms, and extreme winds further compounds these risks. Power outages will likely increase, impacting businesses and consumers.
Disrupted Supply Chains and Transport Networks: Climate change poses significant risks to transport and supply chain infrastructure. Acute hazards like bushfires, floods, and extreme winds can cause widespread damage, disrupting the movement of goods, services, and even our workforce. Given that many Australian supply chains are exceptionally long, stretching over 2,000 km from production to market, there are numerous points of vulnerability. Imagine the impact on hardware procurement, software delivery, and IT equipment logistics when key routes are cut off. The risk to supply and service chains is projected to rise from moderate currently to high by 2050 and very high by 2090.
Economic Headwinds and Innovation Challenges
Beyond direct physical damage, climate change introduces broader economic challenges that will inevitably impact the tech sector.
Mounting Economic Costs: The cumulative wealth loss in Australia from reduced agricultural and labour productivity due to climate change could exceed $211 billion by 2050 and a staggering $4.2 trillion by 2100. This creates a less stable economic environment, directly influencing investment in technology and the growth potential of tech businesses. The 2023 Intergenerational Report estimates productivity impacts could reduce Australia’s economic output by between $135 billion and $423 billion by 2063.
Rising Insurance Premiums: Businesses, including tech startups and established firms, face increasing insurance costs as physical risks escalate, or even the withdrawal of insurance in high-risk areas. This adds a significant, often unpredictable, financial burden.
Stifling Innovation and R&D: Australia already lags behind other OECD countries in Research and Development (R&D) investment, at 1.7% of GDP compared to the OECD average of 2.7%. Furthermore, 95% of innovation patents filed in Australia in FY23 were developed by overseas businesses. Climate-driven economic instability could further impede the crucial investment needed for technological innovation and commercialisation, areas where Australia needs to accelerate. This is particularly pertinent for developing sovereign AI capabilities, which requires significant investment in infrastructure, talent, and an innovative environment.
The Human Element: Workforce and Skills
The human capital that drives our tech sector is also at risk.
Productivity Drain: Extreme heat impacts worker productivity, leading to lost workdays. It is estimated that heatwaves currently reduce annual productivity by $616 per worker, totalling $5.8 billion, or 0.33–0.47% of GDP. By 2061, an additional 700,000 to 2.7 million days of work could be lost annually in key sectors due to heatwaves. Unpleasant working conditions may force workers to seek opportunities elsewhere, creating labour shortages.
Exacerbating Skills Gaps: Our sector already faces significant skills challenges, including a projected need for 230,000 additional tech workers by 2030 and a shortfall of 60,000 AI professionals by 2027. The rapid change of technology is the most common barrier to developing sufficient digital skills (39%), with a shortage of skilled candidates being the second (29%). Climate impacts could indirectly worsen these shortages by diverting talent to urgent fields like disaster response or disrupting educational pathways.
Cybersecurity Implications: While not a direct cause, the increasing frequency and sophistication of cyberattacks, including AI-enabled attacks which doubled between 2023 and 2024, underscores the need for robust digital defences. When physical infrastructure is compromised by climate events, the vulnerabilities to cyber threats can increase, stressing our already-strained cybersecurity capacity, which requires 54,000 additional professionals by 2030.
A Call to Action for Tech Professionals
The NCRA findings, coupled with the National Adaptation Plan (NAP), make it clear: Australia's digital future is inextricably linked to its climate future. The risks are substantial and will intensify, but with our collective expertise, innovation, and commitment, Australia's tech professionals can play a leading role in building a more resilient and adaptive nation.
Engineer for Resilience: We must integrate climate resilience into the design and deployment of our solutions. This means building robust, geographically diverse data centre architectures that can withstand extreme weather, designing distributed networks that minimise single points of failure, and implementing proactive monitoring systems to anticipate and respond to climate-driven disruptions. The Australian Government is strengthening guidance for considering climate risk in infrastructure investment and reviewing the Security of Critical Infrastructure Act 2018.
Innovate for Adaptation: The tech sector is uniquely positioned to develop solutions for climate adaptation. This includes leveraging AI for predictive modelling of climate hazards, developing smart grid technologies, creating efficient energy and water management systems, and building resilient communication networks. The government is developing a National AI Capability Plan and an innovation strategy, which we should actively contribute to and help shape.
Advocate for Strong Governance: Effective national governance is crucial for a coordinated, sustained response to climate risks. We need clear roles and responsibilities, adequate resource allocation, and robust climate risk assessments and disclosure requirements across all sectors. The tech sector can advocate for these systemic changes and help decision-makers understand the technical implications of climate risks.
Prioritise Continuous Learning: The rapidly changing technology landscape, combined with evolving climate risks, necessitates continuous digital skill enhancement. Upskilling in areas like cybersecurity, AI, and data analytics is more vital than ever. These competencies will not only power our digital economy but also equip us to develop and deploy the adaptive solutions Australia needs.
This isn't just about protecting our sector; it's about safeguarding Australia's future and ensuring our technology continues to power a resilient, adaptive, and digitally brilliant nation. Let's embrace this challenge and lead the way.