Sydney's bushfires costing $50 million a day, finds consultancy
As Australia’s blistering heat wave continues to unfold, the cost of Sydney’s bushfires has reached up to $50 million worth in economic damages per day, according to an analysis by SGS Economics, and that figure is set to continue to rise.
According to the research and consulting firm, which has offices in Sydney, Canberra, Melbourne and Hobart, the costs follow from the reduced economic activity in the region. More than 1 million people living in communities in New South Wales face “high to extreme risk of bushfire”, with many more seeing their daily lives impacted.
The latter includes factors such as disruption to transport services meaning that workers can’t reach their jobs, people missing work because they feel unwell from the smoke, and workers abandoning their desks as the haze trips the fire alarms.
“As people are forced to stay at home and offices are evacuated, our productivity and competitiveness is taking a big hit,” said Gabriel Metcalf, the chief executive of the Committee for Sydney.
It also impacts the retail and hospitality sectors. “If I'm running a bar and I'm on the waterfront, I'm not selling any cocktails, because there's no-one there,” said Terry Rawnsley from SGS Economics. And each day that bushfire smoke descends on Sydney, shoppers stay at home making a “real impact” on the retail scene.
Meanwhile, tourism to Sydney has dropped dramatically and those that have found their way to capital of New South Wales are spending less on dining and leisure.
In SGS Economics’ economic modelling, Sydney generates roughly $1.2 billion a day worth of economic activity, with the haze “probably reducing Sydney's gross domestic product reduced by around $12 million to $50 million each day,” said Rawnsley.
The estimate is based on historic data on the economic costs of natural disasters and major city business disruptions. According to the Australian Productivity Commission, Australia has an average of nearly 54,000 bushfires per year, and data from such previous disasters provides a solid foundation for making predictions on Sydney’s current bushfire impact.
Long term impact
The long term impact could however be much larger, as the city may see its image as a “great place to work of visit” crumble. If fires continue to rage out of control across the region, the city runs “the risk of no longer being known for its beautiful harbour and beaches, but for its awful pollution,” Metcalf said.
A recent study by the Organisation for Economic Co-ordination and Development found that Sydney has one of the worst air quality of any city in the world at the moment, with the price tag of air pollution on the rise. Globally, the number of working days lost to air pollution is expected to triple in the four decades.
Indirect costs of air pollution include factors such as a larger number of premature deaths, increased health expenditure, lower crop yields, and children being unable to attend school.
