There’s a quiet patch of <a href="https://www.apartments.com.au/developments/hawthorn-vic-3122">Hawthorn</a>, between the bustle of Glenferrie Road and the curve of the Yarra, that rarely sees change, and even more rarely, new apartments. But that’s exactly where <a href="https://www.apartments.com.au/developers/pomeroy-pacific-quattro-corp">PQD</a> is planting Kooyongkoot: a deliberate, 18-residence answer to the question of what downsizers actually want.

“This is something this pocket of Hawthorn has never seen before,” says Fil Gacesa, head of sales at PQD. “<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a> will deliver just 18 large-scale apartments in the heart of Hawthorn. It is the true definition of resort-style living.”

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/59D7VxzltmM?si=1iCzRD7FRneKryfv" title="YouTube video player" width="560"></iframe>

That scale is central to the story. It’s what allows for two dedicated lift cores, short corridors, and a generous lightcourt that draws natural ventilation and sunlight into every residence. It’s also what makes room for the sort of amenity usually confined to high-density towers: a fully equipped wellness centre with infrared and traditional saunas, yoga and pilates studio, cold therapy shower, and treatment room. There’s a golf simulator, car and dog wash stations, and extensive storage too, not bolted on, but baked in from the start.

But more than the checklist, it’s the design intent that carries weight. “This project has been many years in the making,” says Mark Pomeroy, Director of PQD. “Not just in planning, but in listening, to what our buyers and the local community are looking for”.

[smartcode_project:default project_id=102717 project_image_fid=355289]

That listening shows up in the materials, oak floors, natural stone, V-ZUG appliances, and in how space is handled. Penthouses feature private rooftop terraces with pools. Terraces and garden residences embrace outdoor connection. Inside, the layouts skew large and open, geared for hosting, not just housing.

Architecturally, <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a>’s approach is grounded. There’s no reaching for spectacle here. Instead, the building offers a sculptural calm, anchored by landscaping from Eckersley Garden Architecture.&nbsp;

“We wanted to create spaces that feel expansive, serene, and meaningfully connected to daily life,” said founding partner Chris Stribley elsewhere.

[smartcode_project:default project_id=102717 project_image_fid=355304]

That sentiment, calm, connection, echoes in the location itself. Kooyongkoot sits just a short stroll from Central Gardens, Fairview Park, and the Rivoli Cinema. Tram lines and schools are close, but the street is tucked, quiet, and leaf-lined.&nbsp;

“Residents of Kooyongkoot will be a short stroll from Fairview Park, Central Gardens, and the Glenferrie Road retail strip," Gacesa notes, "but you're also cocooned in this peaceful pocket behind extensive landscaping by Eckersley Garden Architecture.”

Kooyongkoot is set for completion in late 2026.

[smartcode_project_cta:default project_id=102717]

Staff Writer

The project that said no to compromise: Inside Kooyongkoot, Hawthorn

When long-time Ivanhoe locals Graeme and Catherine, decided it was time to downsize, they weren’t necessarily in a rush.&nbsp;

Like many in their stage of life, they had started thinking about apartment living, but anticipated making the shift in two to three years.

That timeline changed when they visited <a href="https://www.urban.com.au/new-apartments/candela-ivanhoe-40-upper-heidelberg-road-ivanhoe">Candela</a>, a new boutique development by <a href="https://www.urban.com.au/developers/salter-brothers">Salter Brothers</a>. The project ticked all the boxes they were looking for: location, quality design, and long-term lifestyle benefits, which prompted them to bring their decision forward.

“It was the right place at the right time,” they said. “We knew immediately it ticked all the boxes, and we didn’t want to wait.”

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Their decision to downsize was driven by a combination of practical needs and lifestyle considerations. Their existing home, while much loved, had become increasingly difficult to maintain. It spanned multiple levels, included extensive front and back gardens, and was starting to show the wear that comes with age.&nbsp;

They were looking for a more manageable lifestyle, one with less upkeep and more freedom. A brand-new apartment with no maintenance requirements and the ability to simply “lock up and leave” gave them peace of mind and a greater sense of control over their future.

Financially, the purchase made sense as well. The available stamp duty savings, strong price-to-value offering, and timing of the settlement suited their plans, making the transition smoother and more cost-effective. The apartment's design and inclusions further supported their choice.

[smartcode_project:default project_id=342 project_image_fid=357493]

The layout was both functional and flexible: three bedrooms, a butler’s pantry, a separate laundry, and a large open-plan living area. It gave them the freedom to host a family, accommodate guests, or set up a home office. The expansive balcony and elevated views added to the appeal, providing a sense of openness and connection to the outdoors.

“It just had a really good flow,” Catherine noted, something they found lacking in many other apartments they’d considered, particularly in the established market.

Candela’s boutique scale was another deciding factor. With a smaller number of residences and a top-floor penthouse position, the couple felt the development offered the privacy and space they were looking for, without feeling isolated.

“We liked that it wasn’t a huge development. It felt well-balanced, modern but still with a sense of community, not overwhelming,” they said.

[smartcode_project:default project_id=342 project_image_fid=357508]

Equally important was the ability to remain in Ivanhoe, a suburb they know well and have deep roots in. After 46 years in the area, proximity to local parks, shops, and familiar faces mattered just as much as the apartment itself.

“We didn’t want to give up the community we’ve known for decades. Candela allowed us to upgrade our lifestyle while staying in the place we call home.”

With a Walk Score of 90, the village location supports a convenient, connected lifestyle. <a href="https://www.apartments.com.au/developments/ivanhoe-vic-3079">Ivanhoe</a> Station is just a eight-minute walk away, and the neighbourhood offers access to parks, cafes, restaurants, and schools along Upper Heidelberg Road, all within easy reach.

Beyond the apartment, the couple also saw value in the broader vision for Candela, one that integrates residential living with public spaces and local amenities.&nbsp;

The development introduces 58 new apartments as well as a mix of commercial and social spaces that integrate contemporary architecture with the suburb’s existing character.&nbsp;

At ground level, residents will find a charming café and a lifestyle wellness centre, perfect for unwinding and rejuvenating. Meanwhile, the rooftop garden offers a stunning vantage point for residents to enjoy breathtaking sunsets, host gatherings, or enjoy barbecues with family and friends. It's not just a place to live; it's a vibrant community where every moment is an opportunity to connect and create lasting memories.

[smartcode_project_cta:default project_id=342]

Why Ivanhoe locals are choosing to downsize to Candela

Mark and Roy Makari are expanding their presence in Sydney’s South West with a second major proposal for Leppington, this time envisioning a 900-dwelling mixed-use development just 850 metres from their previously lodged tower trio on Fifth Avenue.

Project management and construction management firm Creative Vision filed the plans for the&nbsp;multi-building project at <a href="https://www.apartments.com.au/new-apartments/230-rickard-road-leppington-nsw-2179">230 Rickard Road, Leppington</a>. The proposal seeks to establish a new focal point for the precinct through a high-density, transit-oriented development supported by diverse land uses.

According to the Scoping Report prepared for the Department of Planning, the scheme includes around 900 apartments across multiple towers, including 135 dwellings designated for affordable housing. A mix of market and subsidised apartments will be supported by ground-level activation through retail and office space, a childcare centre, and a hotel, forming a comprehensive urban precinct.

<img alt="Mixed Use Development 230 Rickard Rd Leppington" data-entity-type="file" data-entity-uuid="34797362-f3dc-4d84-8235-2657fc5f3bde" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Plan.png?VersionId=Uzckrz9tUpDQl5lX1_WMhjnv16bsr8wG" />

The Design Report by <a href="https://www.apartments.com.au/architects/studiosc-0">Studio SC</a> notes that the project “intends to deliver a high-quality, high-density built form that supports the vision for the Leppington Town Centre, integrating mixed-use outcomes and public domain upgrades.” The development is expected to be delivered in stages, although a precise timeline is yet to be confirmed.

The project will be assessed through a future State Significant Development Application, with the Scoping Report indicating the team will seek design excellence via a competitive process or through an expert design review panel. Early massing diagrams suggest a series of mid- to high-rise buildings framing a central landscaped spine, with emphasis on pedestrian permeability and public space.

The planning documentation flags a strong sustainability agenda, stating that the development will “respond to the urban heat island effect, incorporate water sensitive urban design, and prioritise active transport”.

<img alt="Mixed Use Development 230 Rickard Rd Leppington" data-entity-type="file" data-entity-uuid="369d7b54-1279-4cde-88ec-dcb215594414" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Podium_1.png?VersionId=QArL7B2kkLt63vl5xvL0FNV_ardAlez4" />

The proposal follows in the footsteps of the Makaris’ nearby Fifth Avenue site, where they’ve submitted plans for three towers comprising nearly 500 apartments, with 10 per cent dedicated to affordable housing. That project features commercial podiums, a childcare centre, and a new public park that would occupy more than a third of the site.

Both developments are situated within walking distance of Leppington Train Station and fall under strategic precinct plans promoting higher density housing. The town centre is undergoing substantial transformation, driven by state government planning reforms aimed at fast-tracking housing delivery.

Together, the two projects represent a combined ambition of nearly 1,400 new homes across just under two kilometres of central Leppington.

First look: 900-home mixed-use precinct planned for Leppington

Leading Australian integrated property development group, <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a>, has released the signature penthouses crowning its landmark AURA by Aqualand precinct at 168 Walker Street in North Sydney, unveiling Il Magnate and La Divina as the largest and most luxurious penthouses in the suburb.

With prices anticipated to commence from $15 million, and each accompanied by a new Porsche Carrera 911 valued at over $500K, the residences mark the culmination of <a href="https://www.apartments.com.au/buildings/aura-by-aqualand-north-sydney-168-walker-street-north-sydney-nsw-2060">AURA by Aqualand</a>’s decade-long journey and the beginning of its final sales chapter. 
&nbsp; 
Their release follows more than $850 million in record-breaking residential sales and the building’s completion and occupation.

[smartcode_project:default project_id=30959 project_image_fid=358868]

The Richards Stanisich-designed 284 sqm Il Magnate and 224 sqm La Divina penthouses, collectively known as The Icons of AURA, are conceived as grand luxury homes rather than apartments, with expansive proportions, elevated materiality and curated identities that reflect their status as one-off residences.&nbsp;

Il Magnate features a grande master suite, complete with substantial walk-in dressing area and ensuite, three other bedrooms, second ensuite and another bathroom, powder room, open plan kitchen, scullery, substantial dining area and generous living room divided by a feature fireplace, and a multifunction wintergarden, which is ideal for a study and adjoining office breakout space. &nbsp;

Meanwhile, the La Divina residence offers the same amenities, sans the powder room, on a slightly smaller alternate floor plan configuration.

[smartcode_project:default project_id=30959 project_image_fid=358863]

Each occupies half of AURA by Aqualand’s topmost 28th level, comes with four secure car spaces and pairs sweeping Sydney Harbour panoramas with large-scale living spaces, refined detailing and a level of craftsmanship and amenity rarely offered in the North Shore market.&nbsp;

Penthouse residents will also receive Etymon’s ‘Black Key’ private concierge and lifestyle management service, an invitation only offering providing the ultimate in bespoke personalisation, including a range of everyday discrete services, from dinner party management, grocery deliveries, pet feeding or plants watered, dinners, snacks and coffee deliveries, event ticket sourcing, right up to organising travel visas and international airfares. Rarely seen in Australian properties, the service provides residents the benefits of living in a world-class luxury hotel-style home, akin to The Ritz, or the Waldorf Astoria.

[smartcode_project:default project_id=30959 project_image_fid=358862]

<a href="https://www.apartments.com.au/interior-designers/richards-stanisich">Richards Stanisich</a>’s Director, Kirsten Stanisich, said the studio set out to craft residences that feel profoundly considered, contemporary and deeply connected to their setting.

“From the outset, we approached these penthouses with the sensibility of a grand Parisian residence - generous in scale, elegant in proportion and designed to feel more like a handcrafted home than an apartment," Stanisich said.

“Their elevated position and sweeping harbour outlook informed every decision, creating a rare connection between urban sophistication and natural calm. We shaped each space with expressive materiality, sculptural forms and bespoke detailing that invite touch and interaction.&nbsp;

“The result is a pair of residences defined by volume, light and an inherent softness - refined, flexible and deeply personal. These penthouses are unlike anything else in North Sydney, offering a sanctuary of true luxury framed by some of the city’s most remarkable views.”

For Aqualand’s Head of Sales &amp; Marketing, Alex Adams, the collaboration with Porsche underscores the shared ethos behind the residences.

“Aqualand’s collaboration with Porsche underpins both brand’s sharing an obsession with craftsmanship, design excellence, and enduring value," Adams said.

“Our penthouses are created for those who appreciate the finer details and expect the extraordinary at every touchpoint. Including a Porsche simply extends that experience beyond the residence - it’s a continuation of the lifestyle our buyers already live.”&nbsp;

[smartcode_project:default project_id=30959 project_image_fid=292862]

Aqualand’s Managing Director, Jin Lin, said the penthouses represent both the pinnacle of AURA by Aqualand and an important design benchmark for the company’s future pipeline.&nbsp;

“These stunning penthouses reflect the purest expression of Aqualand’s design ambition," Lin said.

“The unparalleled design intent makes them not only the glistening crown of AURA by Aqualand, but the crown of North Sydney itself. They’re essentially a thank you gift to a burgeoning community that deserves this level of quality and architectural consideration.&nbsp;

“We’re leveraging the unrivalled standard set here as the foundation for what comes next, including our upcoming Anderson Street, Chatswood; 15 Blue Street, North Sydney and Central Barangaroo projects. Purchasers of these penthouses will essentially be living inside the blueprint of Aqualand’s future.

“These landmark residences demonstrate how far North Sydney has evolved and the strength of demand for highly curated, bespoke luxury homes. They’re more than penthouses, they’re legacy residences.&nbsp;

“With AURA by Aqualand now a thriving new precinct with residents well and truly settled, and our in-house world-class lifestyle amenity activated, Il Magnate and La Divina represent a once-in-a-lifetime opportunity to secure an extraordinary piece of North Sydney’s future.”

[smartcode_project_cta:default project_id=30959]

Joel Robinson

Aqualand launches North Sydney penthouses with free Porsche Carrera 911

<a href="https://www.apartments.com.au/developments/bokarina-qld-4575">Bokarina</a> Beach has quietly evolved into one of the Sunshine Coast’s most complete coastal lifestyle precincts, defined not just by proximity to the ocean, but by how residential living, local retail and everyday amenity are stitched together.&nbsp;

Gardner Vaughan Group’s <a href="https://www.apartments.com.au/new-apartments/bask-bokarina-38-bokarina-boulevard-bokarina-qld-4575">Bask Bokarina</a> now represents the final residential chapter in that transformation.

[smartcode_project:default project_id=141609 project_image_fid=333360]

Over recent years, the Bokarina Beach precinct has taken shape as a walkable, community-oriented neighbourhood, anchored by beachfront access, Lake Kawana to the west, and a growing mix of cafés, specialty retail and public open space.&nbsp;

With Zinc Bokarina already delivered next door by <a href="https://www.apartments.com.au/developers/gardner-vaughan-group">Gardner Vaughan Group</a> (GVG), Bask is the last opportunity to buy a brand new apartment within the precinct, effectively rounding out a fully formed coastal village.

GVG has positioned Bask to strengthen that lifestyle framework. Ten ground-floor retail spaces are planned beneath the residences, extending Bokarina Boulevard’s existing activity and reinforcing the area’s everyday convenience, from casual dining and coffee to local services, within a short walk of the beach.

[smartcode_project:default project_id=141609 project_image_fid=333359]

The residential component comprises 135 apartments across two buildings, Mydas and Caretta, with a clear shift toward larger three- and four-bedroom layouts and penthouses. That mix reflects a maturing buyer profile in Bokarina, where demand is increasingly led by owner-occupiers and active downsizers seeking space, permanence, and connection to place rather than short-term coastal accommodation.

Design and amenity have followed the same logic. Residents will have access to a heated plunge pool, gym, private dining room with a full kitchen, landscaped communal gardens with barbecues and a firepit, and a shared herb and vegetable garden, facilities intended to support daily use rather than resort-style turnover. Pet-friendly features, including a dog wash bay, acknowledge both buyer expectations and the area’s dog-friendly beach, located around 250 metres from the site.

[smartcode_project:default project_id=141609 project_image_fid=333366]

“Bokarina has become one of the Sunshine Coast’s most desirable beachside communities, and Bask represents the very last chance to buy new in this location,” GVG Director Sam Gardner said.&nbsp;

“Our focus has been to create spacious, functional apartments that meet the needs of locals who want to downsize without compromise, as well as those seeking a full-time coastal retreat.”

Positioned between the Pacific Ocean and Lake Kawana, Bask apartments have been oriented to capture outlooks toward the water or the Glass House Mountains, reinforcing the project’s connection to its natural surroundings. With parks, beachfront paths, hospitals, retail and public transport already in place, Bask arrives at a point where the broader precinct is no longer emerging, but established.

Construction is expected to complete in Q3 this year, with apartments ready to move into this Spring.

[smartcode_project_cta:default project_id=141609]

Bask to complete Bokarina’s Sunshine Coast lifestyle precinct as final apartments are released

Bushfire

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GUEST OBSERVATION
Last season’s bushfires directly <a href="https://www.dailytelegraph.com.au/bushfiresupport/fathers-son-newlyweds-21-lives-lost-to-nsws-deadly-bushfires/news-story/0ba931abc7ce3f1bac820429873b75c2">killed 34 people</a> and devastated more than 8 million hectares of land along the south-eastern fringe of Australia.
A further <a href="https://www.theguardian.com/australia-news/2020/may/26/australias-summer-bushfire-smoke-killed-445-and-put-thousands-in-hospital-inquiry-hears">445 people</a> are estimated to have died from smoke-induced respiratory problems.
The burned landscape may take decades to recover, if it recovers at all.
While it’s become known colloquially as the <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-04-16/bushfire-royal-commission-begins-into-australia-black-summer/12152680">Black Summer</a>, last year’s fire season actually began in winter in parts of Queensland. The first fires were <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-06-27/bushfire-outlook-queensland-2019/11251150">in June</a>.
So will the 2020 fire season kick off this month? And is last summer’s inferno what we should expect as a normal fire season? The answer to both questions is no. Let’s look at why.
Last fire season
First, let’s recap what led to last year’s early start to the fire season, and why the bushfires became so intense and extensive.
The fires were so severe because they incorporated five energy sources. The most obvious is fuel: live and dead plant material.
The other sources bushfires get their energy from include the terrain, weather, atmospheric instability and a lack of moisture in the environment such as in soil, timber in houses and large woody debris.
The <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-06-27/bushfire-outlook-queensland-2019/11251150">June fires</a> in Queensland resulted from a drought due to the lack of rain coming from the Indian Ocean. The drought combined with unusually hot dry winds from the north-west. <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-08-28/queensland-bushfire-season-starts-earlier-lasts-longer/11456576">By August</a> the bushfires were burning all along the east coast of Australia and had become large and overwhelming.
Ahead of the fire season, environmental moisture was the lowest ever recorded in much of eastern Australia. This was due to the <a href="http://www.bom.gov.au/climate/iod/">Indian Ocean Dipole</a> – the difference in sea surface temperature on either side of the ocean – which affects rainfall in Australia. The dipole was in positive mode, which brought drought. This meant the fire used less of its own energy to spread.
Fire weather conditions in south-eastern Australia were severe from August 2019 until March 2020. Temperatures reached <a href="https://www.theguardian.com/australia-news/2019/dec/19/419c-australia-records-hottest-ever-day-one-day-after-previous-record">record highs</a> in places, relative humidity was low and winds were strong due to high-pressure systems tracking further north than normal.
High atmospheric instability, often associated with thunderstorms, enabled large fire plumes to develop as fires grew to several thousand hectares in size. This increased winds and dryness at ground level, rapidly escalating the damaging power and size of the fires.
Fuel levels were high because of the drying trend associated with climate change and a lack of low-intensity fires over the past couple of decades, which allowed fuel levels to build up.
What’s different now
Currently, at least two bushfire energy sources – fuels and drought – are at low levels.
Fuels are low because last season’s fires burnt through large tracts of landscape and it will take five to ten years for them to redevelop. The build-up will start with leaf litter, twigs and bark.
In forested areas, the initial flush of regrowth in understorey and overstorey will be live and moist. Gradually, leaves will turn over and dead litter will start to build up.
But there is little chance of areas severely burnt in 2019-20 carrying an intense fire for at least five years.
What’s also different this year to last is the moist conditions. Drought leading up to last fire season was severe (see below).
<a href="https://images.theconversation.com/files/340760/original/file-20200609-21201-quf46h.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/340760/original/file-20200609-21201-quf46h.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Rainfall Deficiencies: 36 months (February 1 2017 to January 31 2020). <a class="source" href="http://www.bom.gov.au/jsp/awap/rain/index.jsp?colour=colour&amp;time=history%2Fnat%2F2017030120200229&amp;step=4&amp;map=drought&amp;period=36month&amp;area=nat">Australian Bureau of Meteorology</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a>
Environmental moisture was the driest on record, or in the lowest 5% of records for much of south-east Australia.
But the current level of drought (see below) is much less pronounced.
<a href="https://images.theconversation.com/files/340761/original/file-20200609-21208-1l3nwlm.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/340761/original/file-20200609-21208-1l3nwlm.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Rainfall Deficiencies: 12 months (June 1 2019 to May 31 2020). <a class="source" href="http://www.bom.gov.au/jsp/awap/rain/index.jsp?colour=colour&amp;time=history%2Fnat%2F2019050120200430&amp;step=0&amp;map=drought&amp;period=12month&amp;area=nat">Australian Bureau of Meteorology</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a>
A change in weather patterns brought good rains to eastern Australia from late February to April.
A turning point?
It’s too early to say conclusively how the fire season will pan out in 2020-21. But moister conditions due to a neutral Indian Ocean Dipole and <a href="http://www.bom.gov.au/climate/enso/history/ln-2010-12/SOI-what.shtml">Southern Oscillation Index</a> (which indicates the strength of any <a href="https://theconversation.com/explainer-el-nino-and-la-nina-27719">El Niño and La Niña</a> events), the lack of fuel, and more normal weather patterns (known as a positive <a href="http://www.bom.gov.au/climate/sam/">Southern Annular Mode</a>) mean there is little prospect of an early start to the season.
The likelihood of severe bushfires in south-east Australia later in the year and over summer is much reduced. This doesn’t mean there won’t be bushfires. But they’re not likely to be as extensive and severe as last fire season.
The reduced bushfire risk is likely to persist for the next three to five years.
 
But, in the longer term, climate change means <a href="https://www.climatecouncil.org.au/not-normal-climate-change-bushfire-web/">severe fire seasons are becoming more frequent</a>. If we simply try to suppress these fires, we will fail. We need a concerted effort to manage the bushfire risk. This should involve carefully planned and implemented prescribed fires, as well as planning and preparing for bushfires.
Last bushfire season should be a turning point for land management in Australia. Five inquiries into the last bushfire season are under way, including a <a href="https://naturaldisaster.royalcommission.gov.au/about">royal commission</a>, a <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Finance_and_Public_Administration/Bushfirerecovery">Senate inquiry</a> and inquiries in <a href="https://www.safecom.sa.gov.au/site/independent_review_sa_201920_bushfires.jsp">South Australia</a>, <a href="https://www.igem.vic.gov.au/fire-season-inquiry">Victoria</a> and <a href="https://www.nsw.gov.au/nsw-government/projects-and-initiatives/nsw-bushfire-inquiry">New South Wales</a>.
These inquiries must lead to change. We have a short window of opportunity to start managing fires in the landscape more sustainably. If we don’t, in a decade’s time we may see the Black Summer repeat itself.<img src="https://counter.theconversation.com/content/139757/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/kevin-tolhurst-184">Kevin Tolhurst</a>, Hon. Assoc. Prof., Fire Ecology and Management, <a href="https://theconversation.com/institutions/university-of-melbourne-722">University of Melbourne</a>
This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/its-12-months-since-the-last-bushfire-season-began-but-dont-expect-the-same-this-year-139757">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

12 months since the last bushfire season, don't expect the same this year

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GUEST OBSERVATION
Australia’s catastrophic bushfire season has done immense damage to Australia’s tourist industry. Then, just as heavy rain began to bring the situation under control, came the coronavirus outbreak in China – now the top source of international visitors to Australia. Tourism from China, already greatly reduced, ended with the ban on non-citizens travelling from China.
The general assumption has been that, once the immediate crises are over, Australia’s tourist numbers will bounce back.
Optimists point to examples such as Japan following the March 2011 earthquake and tsunami that killed more than 15,000 people, resulted in the <a href="https://www.iaea.org/newscenter/focus/fukushima" target="_blank">Fukushima Daiichi nuclear disaster</a> and forced more than 500,000 people to evacuate.
Tourism to Japan took a hit. International visits in 2011 fell 28%, to <a href="https://theconversation.com/making-it-safe-tourism-after-japans-earthquake-5691" target="_blank">6.2 million</a> from 8.6 million in 2010. By the end of 2012, however, numbers were back to more than 8.3 million. Tourism to the devastated Fukushima region took a little longer to bounce back, but by fiscal 2015 had recovered to nearly <a href="http://www.fukushimaminponews.com/news?id=709" target="_blank">90% of numbers in fiscal 2010</a>.
The same was true of the 2004 Boxing Day tsunami that wreaked catastrophic damage and killed an estimated 230,000 people in Indonesia, Sri Lanka, India, Thailand and other countries in the Indian Ocean region.
Terrorist attacks in major cities have a similar immediate impact on travel, but this soon dissipates.
There are, however, good reasons to think this time is different.
Unprecedented duration
First, most disasters of this kind have been single-day events. Relief efforts and damage assessments can dominate the news for a week or more, but other events soon take their place.
By contrast, Australia’s bushfire emergency ran for months, generating extensive worldwide coverage for much of this time. The COVID-19 outbreak epidemic is still front-page news and will probably remain so until it has been contained.
Second, the typical shock of this kind has no long-term effect on perceptions of the country where it takes place. The vulnerability of the Pacific Rim to earthquakes and tsunamis has long been known, and the occurrence of an earthquake in Japan does not make another one any more likely (if anything the opposite).
Similarly, terrorist attacks can and do happen anywhere. While there are countries where terrorism risks discourage most tourists – Afghanistan, Iraq, Nigeria and Syria being <a href="http://visionofhumanity.org/app/uploads/2019/11/GTI-2019web.pdf">the top four</a> – in most of the world no possible destination is more or less at risk than any other, and the risk remains even if you stay at home.
By contrast, the bushfire cataclysm has been unprecedented in terms of duration and the areas in southeast Australia destroyed. Sydney, Melbourne and Canberra were all cloaked in smoke.
The image of Australia as a clean, green destination for outdoor fun – promoted in an advertising campaign in Britain featuring Kylie Minogue even as the disaster raged – has been replaced by burnt-out landscapes where the next fire may be even worse than the last.
The Australian government’s handling of the issue has added to negative perceptions. International coverage of the bushfires has repeatedly mentioned the “<a href="https://www.washingtonpost.com/climate-environment/as-fires-devastate-australia-a-coal-loving-leader-faces-an-early-test/2020/01/08/a7827ebc-3178-11ea-91fd-82d4e04a3fac_story">coal-loving</a>” Australian government’s failure to deal with the fact its fossil fuel exports contribute to the conditions that make catastrophic fires more likely.
Washington Post <a href="https://www.bloomberg.com/opinion/articles/2020-01-06/bushfires-reap-what-australia-s-carbon-exports-have-sown">columnist David Ickling</a> put it like this:
"It’s a rude dose of reality for Prime Minister Scott Morrison, a former tourism-promotion bureaucrat whose lackadaisical, image-obsessed initial response to the fires has caused him to be lampooned on social media as #scottyfrommarketing."
"And yet a generation before Morrison came on the scene, Australia was already lying to itself and the world about its role in the climate change that has fuelled this disaster. If any goodness can sprout from the devastation of these fires, it will start with a more honest reckoning about how successive governments have sold off Australia’s future for a handful of coal."
Finally, the bushfires affected as many tourists as locals. The fires in southern New South Wales and eastern Victoria in particular trapped thousands of tourists taking Christmas-New Year holidays in normally pleasant seaside resorts.
This is not usually the case with disasters, with some exceptions. Most of the 202 people killed in the 2002 Bali bombings were tourists, for example, as were the majority of more than 4,000 people killed in Thailand by the Boxing Day tsunami.
Memories will fade over time, at least until they are rekindled by another disaster. But we should not expect this to happen quickly. The damage the bushfire catastrophe has caused to Australia’s position in the international tourism market is likely to last for years to come.<img src="https://counter.theconversation.com/content/131894/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
<a href="https://theconversation.com/profiles/john-quiggin-2084">John Quiggin</a>, Professor, School of Economics, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/this-time-is-different-australias-tourist-numbers-may-take-years-to-recover-131894">original article</a>.
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This time is different, Australia's tourist numbers may take years to recover

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As the east coast bushfire crisis finally abates, it’s easy to see nothing but loss: more than 11 million hectares of charcoal and ash, and more than a billion dead animals.
But it is heartening to remember that bushfire can be a boon to some plants and animals. We’re already seeing fresh green shoots as plants and trees resprout. Beetles and other insects are making short work of animal carcasses; they will soon be followed by the birds which feed on them.
Australia’s worsening fire regimes are challenging even these tolerant species. But let’s take a look at exactly how life is returning to our forests now, and what to expect in coming months.
<img src="https://images.theconversation.com/files/315625/original/file-20200217-10985-gmpykj.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Life is returning to fire-ravaged landscapes. Flickr, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank">CC BY</a>
<h2>The science of resprouting</h2>
Of course, bushfires kill innumerous trees – but many do survive. Most of us are familiar with the image of bright green sprouts shooting from the trunks and branches of trees such as eucalypts. But how do they revive so quickly?
The secret is a protected “bud bank” which lies behind thick bark, <a href="https://nph.onlinelibrary.wiley.com/doi/full/10.1111/nph.12001" target="_blank">protected from the flames</a>. These “epicormic” buds produce leaves, which enables the tree to photosynthesise – create sugar from the sun so the tree can survive.
Under normal conditions, hormones from shoots higher in the tree suppress these buds. But when the tree loses canopy leaves due to <a href="https://www.nature.com/articles/ncomms1191" target="_blank">fire</a>, drought or insect attack, the hormone levels drop, allowing the buds to sprout.
<h2>Insect influx</h2>
This summer’s fires left in their wake a mass of decaying animal carcasses, logs and tree trunks. While such a loss can be devastating for many species – particularly those that were already vulnerable – many insects thrive in these conditions.
For example, <a href="http://forensicentomologist.com/wp-content/uploads/2008/06/4.pdf" target="_blank">flies</a> lay eggs in the animal carcasses; when the maggots hatch, the rotting flesh provides an ample food source. This process helps break down the animal’s body – reducing bacteria, disease and bad smells. Flies are important decomposers and their increased numbers also provide food for birds, reptiles and other species.
Similarly, <a href="https://theconversation.com/wood-beetles-are-natures-recyclers-with-a-little-help-from-fungi-76029" target="_blank">beetles</a> such as the <a href="https://www.anbg.gov.au/gardens/visiting/exploring/fauna/insects/beetles-ANBG" target="_blank">grey furrowed rosechafer</a>, whose grubs feed on decaying logs and tree trunks, add nutrients to the soil when they defecate which helps plants grow again.
<a href="https://www.sciencedirect.com/science/article/abs/pii/S0378112705003130" target="_blank">Insects also benefit</a> from the mass of new leaves on trunks and branches. For example, native <a href="/news">psyllids</a> – an insect similar to aphids – feed on the sap from leaves and so thrive on the fresh growth.
<img src="https://images.theconversation.com/files/315623/original/file-20200217-10985-k5e7fc.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Animal carcasses are a sad consequence of bushfire, but provide a boon to some insect species. Sean Davey/AAP
<h2>Then come the birds</h2>
Once insects start to move back into an area from forested areas nearby, the birds that eat them will follow.
An increase in psyllids encourages honeyeaters – such as bell miners and <a href="https://ro.uow.edu.au/cgi/viewcontent.cgi?article=1145&amp;context=thsci" target="_blank">noisy miners</a> – to return. These birds are considered <a href="https://www.sciencedirect.com/science/article/abs/pii/S0378112705003130" target="_blank">pests</a>.
A <a href="http://www.publish.csiro.au/pc/PC970221" target="_blank">CSIRO study</a> after bushfires in Victoria’s East Gippsland in 1983 found several native bird species – flame and scarlet robins, the buff-rumped thornbill and superb fairy-wren – increased quickly to levels greater than before fire. As shrubs in the understorey regrow, other species will move in, slowly increasing biodiversity. 
Since the recent <a href="https://www.nbnnews.com.au/2019/11/12/watch-and-act-bushfire-burning-in-moonbi-north-of-tamworth/" target="_blank">bushfire in woodland near Moonbi in New South Wales</a>, numerous bird species have returned. On a visit over this past weekend, I observed currawongs landing in the canopy, saw fairy wrens darting in and out of foliage sprouting from the ground, and heard peep wrens in tufts of foliage on bark and high branches.
Honeyeaters moved between burnt and intact trees on the edge of the blackened forest and butterflies visited new plants flowering after recent rain.
<img src="https://images.theconversation.com/files/315627/original/file-20200217-11023-c6ad0s.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
The presence of the currawong, while a pest species, shows birdlife is returning to the bush. Flickr, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank">CC BY</a>
<h2>Weeds can help</h2>
<a href="https://www.propertyobserver.com.au/https://www.sciencedirect.com/science/article/abs/pii/0006320795900616" target="_blank">Weeds</a> usually benefit when fire opens up the tree canopy and lets in light. While this has a downside – preventing native plants from regenerating – weeds can also provide cover for native animal species.
A study I co-authored in 2018 found highly invasive <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1442-8903.2011.00600.x" target="_blank">Lantana camara</a> provided habitat for <a href="https://www.publish.csiro.au/AM/AM17003" target="_blank">small mammals</a> such as the brown rat in some forests. Mammal numbers in areas where lantana was present were greater than where it was absent.
<a href="https://onlinelibrary.wiley.com/doi/full/10.1111/j.1365-3180.2011.00869.x" target="_blank">Lantana</a> often grows quickly after fire due to the increase in light and its ability to <a href="https://link.springer.com/article/10.1023/A:1009707404802" target="_blank">suppress</a> other plant growth.
<img src="https://images.theconversation.com/files/315628/original/file-20200217-10985-od7u07.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Lantana provides cover for animal species. Flickr, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank">CC BY</a>
<h2>Is there hope for threatened species?</h2>
Generalist species – those that thrive in a variety of environments – can adapt to burnt forest. But specialist species need particular features of an ecosystem to survive, and are far less resilient.
The critically endangered <a href="https://books.google.com.au/books?hl=en&amp;lr=&amp;id=hF2sMDVZztIC&amp;oi=fnd&amp;pg=PR7&amp;ots=5Uri8BWkcm&amp;sig=UKvmQHpO-9hWvqK5pYEfB6hSIEU&amp;redir_esc=y#v=onepage&amp;q&amp;f=false" target="_blank">Leadbeater’s possum</a> lives only in <a href="https://www.wildlife.vic.gov.au/our-wildlife/leadbeaters-possum" target="_blank">small pockets of forest</a> in Victoria.
It requires large fires to create a specific habitat: big dead trees provide hollows for shelter and nesting, and insects feeding on burnt wood and carcasses provide a food source.
But for the Leadbeater’s possum to benefit from the fire regime, bushfires should be infrequent – perhaps every 75 years – allowing time for the forest to grow back. If fires are too frequent, larger trees will not have time to establish and hollows will not be created, causing the species’ numbers to decline.
Similarly in NSW, at least 50% and up to 80% of the habitat of threatened species such as the vulnerable rufous scrub-bird was burnt in the recent fires, an environmental department analysis <a href="https://www.environment.gov.au/biodiversity/bushfire-recovery/research-and-resources">found</a>.
<h2>Looking ahead</h2>
Only time will tell whether biodiversity in these areas is forever damaged, or will return to its former state.
Large fires may benefit some native species but they also provide food and shelter for predatory species, such as <a href="https://theconversation.com/hunter-hunted-when-the-world-catches-on-fire-how-do-predators-respond-126280" target="_blank">feral cats and foxes</a>. The newly open forest leaves many native mammals exposed, changing the foodweb, or feeding relationships, in an ecosystem.
This means we may see a change in the types of birds, reptiles and mammals found in forests after the fires. And if these areas don’t eventually return to their pre-fire state, these environments may be changed forever – and extinctions will be imminent.
<a href="https://theconversation.com/profiles/kathryn-teare-ada-lambert-186436" target="_blank">Kathryn Teare Ada Lambert</a>, Adjunct Lecturer/ Ecologist, <a href="https://theconversation.com/institutions/university-of-new-england-919" target="_blank">University of New England</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/these-plants-and-animals-are-now-flourishing-as-life-creeps-back-after-bushfires-130293" target="_blank">original article</a>.
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These plants and animals are now flourishing as life creeps back after bushfires

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GUEST OBSERVATION
On the night of January 9 2020, my wife and I secured our Kangaroo Island home and anxiously monitored the South Australian Country Fire Service (CFS) website for bushfire advice.
After many horrific weeks of bushfires, the winds had again shifted, and the fire front began a slow, nightmarish march eastward into the island’s central farmlands. Official warnings advised that the entire island was potentially under threat.
<a href="https://images.theconversation.com/files/316070/original/file-20200219-11000-18pw4af.jpg?ixlib=rb-1.1.0&amp;rect=36%2C0%2C4788%2C2800&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/316070/original/file-20200219-11000-18pw4af.jpg?ixlib=rb-1.1.0&amp;rect=36%2C0%2C4788%2C2800&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Landsat-8 false colour image of southwest Kangaroo Island, showing active bushfires on January 9, 2020. Landsat-8, Author provided
As my good neighbours and volunteer firefighters headed off to battle the flames elsewhere on the island, I desperately wanted to find a way to help. With no firefighting training, I felt I physically had little to offer. But I reasoned that my skills and training in remote sensing and spatial science could potentially turn satellite information into useful maps to track the fires, in more detail than those provided by the Country Fire Service and <a href="https://sentinel.ga.gov.au/#/" target="_blank">Geoscience Australia</a>.
While I was ultimately successful, it wasn’t quite as straightforward as I thought. And what I learned about access to good-quality and up-to-date satellite bushfire information surprised me.
Free satellite imagery is abundant; useful information is not
In principle, there are many good sources of free satellite imagery. But selecting, sourcing, understanding and processing a multilayered satellite image into an accurate burnt area map takes technical know-how that is beyond the reach of the people who need it the most.
We are fortunate to live in a time where satellite images are constantly uploaded to the web, often within hours of acquisition. There are many reputable sources for this information, including <a href="https://worldview.earthdata.nasa.gov/" target="_blank">NASA Worldview</a>, <a href="https://earthexplorer.usgs.gov/" target="_blank">USGS Earth Explorer</a>, <a href="https://landlook.usgs.gov/" target="_blank">USGS LandLook Viewer</a>, and the <a href="https://apps.sentinel-hub.com/eo-browser" target="_blank">Sentinel EO Browser</a>.
These websites are gateways to the world of “big satellite data”, and I quickly found myself on a steep learning curve to efficiently navigate them and find recent imagery.
Once downloaded, the next hurdle I faced was how to process a data-rich satellite image into a meaningful and accurate map of the bushfire area. I scoured the internet for “how to” blogs, academic articles, spatial algorithms, and processing codes; these too are the products of much intellectual investment by global scientists, openly and freely available.
As a spatial scientist, I naturally found all this fascinating. But as a resident of an island under assault from bushfires, I also found it frustratingly time-consuming. I crashed my computer testing algorithms. I maxed out my hard drive. I spent hours on possibilities that turned out to be dead ends.
<a href="https://images.theconversation.com/files/316071/original/file-20200219-11017-129dntk.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/316071/original/file-20200219-11017-129dntk.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
True colour satellite imagery is often the most accessible and easily understood, but it often lacks sufficient detail to clearly identify burnt areas. In this Sentinel-2 true colour image, approximately 210,000 hectares are burnt, but bushfire-impacted areas are barely visible without advanced image processing. Sentinel-2, Author provided
Maps help to fight fires and recover from them
In the end, I produced <a href="https://blogs.adelaide.edu.au/environment/2020/02/19/researchers-kangaroo-island-fire-maps/" target="_blank">burnt area maps</a> from Sentinel and Landsat satellite images captured during the fires. I learned that this kind of information can indeed help firefighting and ecological recovery efforts, both during and after bushfires.
Initially I gave the maps to a group of farming friends who had been fighting fires around their properties for weeks. They told me the maps helped save time in assessing which areas had already burned, allowing them to focus on defending unburnt areas, and to make decisions on where to move livestock and install firebreaks.
The positive feedback inspired me to customise my processing techniques, so I could provide updates more quickly when new satellite images became available.
I embedded appropriate safety disclaimers into the maps and released them on Twitter and <a href="http://www.spatialpoints.com/category/blog/ki_fires/" target="_blank">Spatial Points</a>, a blog site managed by my research group at the University of Adelaide.
Within hours, I received messages that the maps were being used for ecological recovery efforts. The maps successfully highlighted remaining patches of habitat where endangered and vulnerable species had found refuge. Several government agencies even contacted me for burnt area information, which I’m told was used to assess infrastructure damage and habitat loss.
<a href="https://images.theconversation.com/files/316073/original/file-20200219-11023-gxgogg.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/316073/original/file-20200219-11023-gxgogg.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Processed Sentinel-2 satellite image. Red areas suggest burnt vegetation. Variation in red hues are caused by dominant vegetation type and soils. Sentinel-2/W. Boone Law, Author provided
National knowledge gap
My experience shows there is a swag of free and regularly updated satellite imagery available, which when interpreted and presented appropriately can potentially be hugely helpful to firefighting and recovery efforts.
However, I am concerned that neither the general public nor decision-makers seem fully aware of the range of satellite information on offer. Nor is there a good understanding of the advanced technical skills needed to access and process imagery into useful map data.
This leads me to wonder whether I have stumbled upon a glaring knowledge gap in Australia’s bushfire preparedness.
How can we overcome this technological and information bottleneck? I don’t propose to have all the answers, but I do believe it would be sensible for governments, industry and research agencies to invest in the kind of capabilities that I developed while trying to protect my own local community.
As Australia faces a future of more frequent and extreme bushfires, there will doubtless be many people who would be glad of this kind of information when they need it most.<img src="https://counter.theconversation.com/content/132087/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/wallace-boone-law-944308" target="_blank">Wallace Boone Law</a>, PhD Candidate, <a href="https://theconversation.com/institutions/university-of-adelaide-1119" target="_blank">University of Adelaide</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/i-made-bushfire-maps-from-satellite-data-and-found-a-glaring-gap-in-australias-preparedness-132087" target="_blank">original article</a>.
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I made bushfire maps from satellite data, and found a glaring gap in Australia’s preparedness

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GUEST OBSERVATION
When the central business district of Lismore was flooded in 2017, every small business owner in the northern New South Wales town had a decision to make. Should they rebuild their businesses, or take whatever insurance money they might get and move on?
I know one who contemplated giving it all away. His shop had been completely inundated. What was the point, he wondered, if it could all happen again in another few years?
He did decide to rebuild, though. More than that, he resolved to build back better, to be better prepared for the next flood. He replaced water-damaged carpets with marine grade carpet, and plasterboard with concrete. He had shelving attached to hoists, and other cupboards on wheels.
In the wake of this season’s bushfires, many small businesses will face the same decision – whether to rebuild, and then how to “build back better”. It’s a question that should also be getting attention in the national capital from public servants and political leaders.
Preparing for future risks
This week Prime Minister Scott Morrison <a href="https://www.pm.gov.au/media/address-national-press-club" target="_blank">spoke about the need</a> to “prepare for and adapt to the environment and the climate we are going to be living in”.
“Building back better” is a crucial part of increasing resilience. It is one of the four key principles of the United Nation’s <a href="https://www.undrr.org/implementing-sendai-framework/what-sf" target="_blank">framework for disaster risk reduction</a> (endorsed in Sendai, Japan, in 2015). It stresses the benefit of using the post-disaster recovery and reconstruction phase to better prepare for future risks.
For a small business, doing so just isn’t just about restoring a premises that might have been destroyed or damaged. Building back better means looking at the business in its totality. This includes relationships with suppliers, customers and staff.
In this regard, building back better should be something done by every small business in a community affected by a disaster. Because all businesses tend to be affected indirectly even if they don’t have to deal with a direct impact. We have seen just how far and wide those indirect effects are in recent weeks, with businesses that depend on tourism <a href="https://www.sbs.com.au/news/tourism-industry-suffers-as-bushfire-images-scare-off-international-travellers" target="_blank">facing a downturn</a> despite not being in a fire-ravaged area.
Economic costs
Just as it costs more to <a href="https://theconversation.com/a-crisis-of-underinsurance-threatens-to-scar-rural-australia-permanently-129343" target="_blank">replace a home destroyed in a bushfire</a> with a building whose design and a materials are more fire-resistant, it take more resources for a small business owner to build back better.
Nor are the costs just financial – getting expert advice plans, finding skilled tradespeople and so on. There are emotional pressures too. There can be a strong motivation to put things back just as they were not just because it seems the quickest route to getting back to normal – and to that all-important cash flow – but also because it is psychologically less taxing.
In the ten years to 2016, the total economic cost of natural disasters in Australia averaged A$13.2 billion a year, according to 2017 modelling by Deloitte Access Economics for the <a href="http://australianbusinessroundtable.com.au/assets/documents/ABR_building-resilience-in-our-states-and-territories.pdf" target="_blank">Australian Business Roundtable for Disaster Resilience &amp; Safer Communities</a>. It projects the economic cost to grow to A$39 billion a year in 2050.
The small business sector disproportionately shoulders these costs, with significant personal and social consequences. If a business in a small town fails to reopen, it create a vicious cycle, reducing trade for neighbouring businesses and hurting the prosperity of the local community. Throughout regional Australia there are examples of small communities – such as <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2015-01-12/black-saturday-infrastructure-marysville-cautionary-tale-sa-fire/6013114" target="_blank">Marysville, Victoria</a> – that never really recovered from past disasters.
Despite how important small businesses are to the economy, and in particular to the prosperity of regional and rural communities, government recognition of the need to assist them remains a work in progress.
For the current bushfire crisis, the federal and relevant state governments are <a href="https://www.business.gov.au/news/bushfire-support#small-business-recovery-package" target="_blank">offering small business</a> “recovery grants” of up to A$50,000 and “concessional loans” of up to A$500,000. To be eligible, though, a business must suffer direct damage. After rebuilding and replacing equipment, even with insurance money as well, there’s often little to invest in building back better.
For the many more small businesses indirectly affected – losing revenue for days, weeks or even months – there is minimal government assistance. The federal, state and territory governments have talked about financial measures that will extend to businesses with indirect impacts as a result of the bush fires, but in reality the support is going towards <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-01-19/federal-government-announces-bushfire-recovery-tourism-package/11880114" target="_blank">tourism campaigns and events</a>.
If governments truly believe small and family businesses are the engine room of the economy, (as <a href="https://www.propertyobserver.com.au/https://twitter.com/scottmorrisonmp/status/1116626191023128579?lang=en" target="_blank">Scott Morrison has said</a>), it’s time to put their needs on the table in post-disaster reconstruction plans. The current assistance and funding packages are not enough, not available to all affected businesses, and don’t help these businesses come back better than before.<img src="https://counter.theconversation.com/content/130871/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/samantha-sharpe-92884" target="_blank">Samantha Sharpe</a>, Research Director, Institute for Sustainable Futures, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936" target="_blank">University of Technology Sydney</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/disaster-hits-small-business-in-many-ways-we-need-a-national-strategy-to-help-them-adapt-130871" target="_blank">original article</a>.
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Disaster hits small business in many ways, we need a national strategy

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GUEST OBSERVER
Bushfires have killed <a href="https://www.theguardian.com/australia-news/2020/jan/24/bushfires-death-toll-rises-to-33-after-body-found-in-burnt-out-house-near-moruya" target="_blank">33 people</a> and destroyed nearly 3,000 houses across Australia so far this fire season. Canberra is under threat right now.
It isn’t only houses. Significant commercial buildings have been destroyed, among them Kangaroo Island’s iconic <a href="https://www.smh.com.au/national/there-s-just-nothing-left-iconic-tourist-site-will-rebuild-as-fires-threaten-premiums-20200110-p53qed" target="_blank">Southern Ocean Lodge</a>.
In New South Wales alone, <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-01-16/nsw-fire-affected-schools-will-be-safe-for-returning-students/11870494" target="_blank">140</a> schools have been hit. Many require <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-11-29/wytaliba-students-return-to-classroom-after-bushfire/11746188" target="_blank">extensive</a> work.
The <a href="https://www.abcb.gov.au/Connect/Categories/National-Construction-Code" target="_blank">National Construction Code</a> provides false, and dangerous, hope.
It requires new homes (Class 1 buildings) built in declared “bushfire-prone” areas to be built to either <a href="http://www.as3959.com.au/" target="_blank">Australian Standard 3959</a>, the National Association of Steelframed Housing standard “<a href="https://www.nash.asn.au/shop/product/nash-standard-for-steel-framed-construction-in-bushfire-areas/" target="_blank">Steel Framed Construction in Bushfire Areas</a>”, or a “performance solution”, which could be anything that in the opinion of a qualified person complies with the performance requirements of the code.
It also applies to Class 2 buildings (apartments) and Class 3 buildings (hotels and guesthouses) in bushfire-prone areas.
Disturbingly, the code does not apply to community buildings, such as schools.
The standard does not fireproof buildings
The definition of “bushfire-prone” varies from state to state, as do the procedures for enforcing it.
Confused? So are many construction professionals.
The sad truth is that any practical building that is exposed to an intense bushfire will probably burn down, whether it complies with Australian Standard 3959 or not.
Worse still, the available evidence suggests there is a significant risk that the people sheltering in it will not survive without an effective refuge, which Australian Standard 3959 does not mandate or consider.
The standard speaks for itself:
Although this Standard is designed to improve the performance of buildings when subjected to bushfire attack in designated bushfire-prone areas, there can be no guarantee that a building will survive a bushfire event on every occasion. This is substantially due to the unpredictable nature and behaviour of fire and extreme weather conditions.
More importantly, while a building constructed to Australian Standard 3959 might be less likely to burn down, Standard 3959 in its current form might not protect the people within the building.
Worse, it might not protect people
The highest aim of any system of building regulation ought to be life and safety, followed by the protection of adjoining properties and then, a long way back, by the protection of the property itself.
In the case of bushfire, the <a href="https://abcb.gov.au/">Australian Building Codes Board</a> and its political masters appear to have put the protection of buildings first, when it should be last.
If a house is under threat by bushfire, the best advice is to evacuate early, whether it complies with Australian Standard 3959 or not.
By encouraging people to believe they can defend a structure compliant with Australian Standard 3959 we could be putting more people at risk than if we simply told them to evacuate.
Residents and firefighters defending houses have accounted for a large percentage of the deaths this fire season.
It’d be better to rethink where we build
We may need to have difficult conversations about whether our subdivision practices are appropriate. Allowing people to build in areas that are bushfire-prone, particularly where buildings are effectively built into the bush, might be creating unmanageable problems for the future.
If there is no such thing as a bushfire-proof house, as Australian Standard 3959 seems to concede, we might need to focus on evacuation and shelters.
In the United States, rather than requiring houses to resist tornadoes or wildfires, the Federal Emergency Management Agency encourages the provision of shelters. State and local authorities often make these mandatory.
People are more important than structures
Having attended one funeral for a person killed defending their home this fire season, I have had enough. We should not be worrying about protecting buildings until we have worked out how to protect human life.
The <a href="https://www.industry.gov.au/regulations-and-standards/building-and-construction/building-ministers-forum">Building Ministers’ Forum</a> and the <a href="https://abcb.gov.au/">Australian Building Codes Board</a> should either embrace a policy of early evacuation or mandate fire shelters in bushfire-prone areas for both new and existing houses.
The board and the states should also make every effort to regulate to ensure all buildings and places designated as refuges of last resort can properly fulfil their intended function, whether they are new or not.
If we are going to have another fire season similar to this year, and so far the CSIRO predictions on this have been totally accurate, we will need to sort this out quickly, preferably before next summer.<img src="https://counter.theconversation.com/content/130165/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/geoff-hanmer-90647">Geoff Hanmer</a>, Adjunct Lecturer in Architecture, <a href="https://theconversation.com/institutions/unsw-1414">UNSW</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/building-standards-give-us-false-hope-theres-no-such-thing-as-a-fireproof-house-130165">original article</a>.
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Building standards offer false hope, fireproof houses don't exist: Geoff Hanmer

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NAB data mapping suggests that the ABS retail trade measure will fall 0.1% m/m in December following a gain of 0.9% in November.
The ABS printed a 0.9% gain in November, while NAB forecast 0.6% (revised to 0.5%). The strong November print is likely a result of the relatively new Black Friday sales bringing forward Christmas spending into November. 
Beyond technical questions around seasonal factors, this points to ongoing weakness in the retail sector amid high consumer debt levels and sluggish wage growth.
It is unlikely that the sector will see a sustained lift any time soon. On the contrary, the catastrophic bushfire season may further damage consumer confidence in January and February.
Click <a href="https://www.propertyobserver.com.au/images/2020/1/22/NAB%20Retail%20Index%20DEC.JPG" target="_blank">here</a> to enlarge:
<img src="https://www.urban.com.au/images/2020/1/22/NAB%20Retail%20Index%20DEC.JPG" alt="">
NAB Group Chief Economist Alan Oster said, "the retail sector has numerous fundamental issues; unemployment is set to edge higher, sluggish wage growth and elevated consumer debt continue to dampen consumer sentiment, despite interest rate cuts and higher house and share prices."
"In parallel to our standard mapping equations, we are running an experimental methodology. This alternative methodology forecast a bigger rise in November and an even weaker result in December."
"If anything, our December forecast has downside risk."
"The current bushfire season – underway since September – is a national tragedy. The local economic impact in bushfire-affected areas has been extreme."
"While it is unlikely that the fires were a major influence on the national December retail data, there may be much more substantial second round impacts in January and February," he concluded.
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Weakness in the retail sector exacerbated by bushfires: NAB

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EXPERT OBSERVER
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The Australian bushfire season that began in September has been horrific with more than 7 million hectares of bush destroyed, more than 25 deaths, significant loss of livestock, estimates of more than a billion wildlife animals killed and more than 1800 homes destroyed. More than 200 fires are still burning. Following the intensification of the bushfires over the Christmas/New Year period attention has now turned to the impact on the economy. This note looks at the key impacts. 
Physical disasters invariably cause a brief disruption to economic activity as measured by GDP followed by a boost as wealth destroyed by the disaster is rebuilt. In this sense measured across a year or so they are often seen as positive for economic growth, albeit this seems perverse particularly for those directly impacted.
The damage to property and wealth flowing from the bushfires will likely run into many billions. For example, the Victorian Black Saturday bushfires are estimated to have cost $4.4bn, whereas the current fires have covered an area 15 times bigger. So there will be a very big rebuilding boost to economic activity to come once the fires are brought under control. But the fires have been very widespread, have been going on for several months now and the crisis is continuing, so there will be a significant short-term negative impact and it likely will involve more than a short-term disruption to economic activity. 
- Activity related to farming, manufacturing, transport, tourism and business generally in the affected areas will be disrupted – this will involve around 2-3% of the population and will be concentrated around the March quarter. It will also be partly offset as affected people have to undertake spending that they otherwise wouldn’t have had to.
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- A bigger impact on economic activity is likely to come via a hit to consumer spending as the constant news of the fires and the smoke haze in several capital cities weighs on confidence. Australians were already very hesitant about the economic outlook after the slowdown in growth seen last year and continuing weak wages growth and high underemployment. A Roy Morgan survey released late last year found that 40% of Australians thought that 2020 will be worse than 2019, which is the worse reading since the early 1990s recession. At the same time a record-low 12% thought it would be better resulting in a net negative reading of 28% which is the worst in the survey’s 40-year history.
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- This may exaggerate how bad things really are. The economy is still in far better shape than it was at the time of the early 1990s recession (I was there, I remember!). But a combination of more negative news flow today due to the rise of social media, more divisive politics and expectations rising faster than reality may be altering perceptions of the economy in a negative way and exaggerating the gloom. Nevertheless, a range of other surveys also show that consumers are uncertain and depressed, and this looks to have intensified since Christmas. The constant terrible news since October about the bushfires along with the smoke in cities is likely weighing further on the national psyche adding to weakness in consumer spending as Australians feel less motivated to spend when their fellow Australians are suffering. The hit to household spending power from higher prices for food and a likely rise in insurance premiums flowing from the fires will only accentuate this. 
- Inbound tourism is also likely to be impacted by the heavy coverage of the bushfires globally – with ridiculous maps showing much of Australia on fire (including where I am right now) – likely to adversely affect perceptions of Australia. This may be short lived (just as the positive boost from the 2000 Olympics was) but it could still last a year or so.
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Taken together we expect a detraction from GDP due to the bushfires of around 0.4% starting in the December quarter but mainly impacting the March quarter before a rebuilding boost kicks in from the June quarter. Given the uncertainty, the range around this negative impact is -0.25% up to a worse case of - 1% of GDP should the fires continue on a widespread basis through the rest of summer. The rebuilding boost should reverse much of this drag later in the year, but there is considerable uncertainty around this as the impact on tourism and consumer spending may linger longer. 
A big proximate contributor to the severity of the bushfires is the severe drought gripping much of Australia. This has already driven a decline in agricultural production, which has been directly detracting around 0.2 percentage points from GDP growth for the last two years. Unfortunately, the Southern Oscillation Index is still in El Nino territory pointing to ongoing relatively dry conditions in eastern and top-end Australia. 
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More policy stimulus 
With the bushfires likely to contribute to a flow of weak economic data for the next several months, questioning the RBA’s “gentle turning point” in the economy and resulting in a movement away from the achievement of the RBA’s full employment and inflation goals, the fires have only added to the pressure for more policy stimulus. We remain of the view that the RBA will cut the cash rate to 0.5% in February (with the market probability now up to 53.4% from a low of 36% before Christmas) and to 0.25% probably in March. The bushfires will push up food prices and insurance premiums but the RBA’s focus on underlying inflation will mean that it should look through this. In fact, increases in such prices will act as a tax on consumer spending power and are negative for spending and so could depress underlying inflation. 
The pressure for further fiscal stimulus has also intensified. The Federal Government has already committed an additional $2bn for bushfire recovery to be spent this year and next (which is relatively small at 0.05% of GDP per year) and the NSW Government has committed another $1bn. However, the total hit to government budgets from the bushfires is likely to be much greater than this given assistance under existing disaster programs, extra expenses associated with fighting the fires and the impact of slower growth in the short term on revenue flows. 
More broadly given the hit to confidence a circuit breaker is arguably needed to help boost economic growth. Monetary policy alone is unlikely to be enough. So there is a need for a broader fiscal stimulus – maybe in the form of a bring forward of the personal tax cuts, an increase in Newstart and broad based investment allowances. To have an impact it needs to be at least 0.5% of GDP (or around $10bn). 
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Rightly in the face of the pain caused by the bushfires the Government has relaxed the focus on achieving a budget surplus and it is now questionable as to whether it will be achieved this year and next. That is not a major problem in the relative scheme of things given the relatively good state of Australia’s public finances. 
Some longer-term challenges 
The bushfires pose a number of longer-term challenges. 
First, increased pressure to adopt a tougher stance in reducing carbon emissions. While Australia has always had droughts and bushfires we have been warned for more than a decade now that the world and Australia is getting warmer, that increasing global greenhouse gas emissions are likely contributing to this and that in the absence of actions to reduce emissions the world will get significantly warmer with the outcome being rising sea levels and more extreme weather events – including storms, floods and droughts – with more severe bushfires an outcome of the latter. 
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Second, the damage inflicted by the extreme bushfires highlights the need for investors to be aware of industries and businesses that are vulnerable to climate change risk – whether it comes from the physical impact from climate change or via measures to reduce emissions. 
Thirdly, the severity of the bushfires and the risk that this is the new normal will necessitate better strategies for reducing the risk to property posed by future bushfires. 
Finally, in the absence of policy action the bushfires risk accentuating the decline of some regional communities particularly where key industries have been destroyed by the fires – with some taking their insurance and rebuilding elsewhere. This will only further centralise Australia in its big cities adding to all the costs that entails – notably congestion and expensive housing. 
What does it mean for investors? 
The likelihood of more RBA monetary easing and continuing weak economic growth in the short term will likely keep Australian bond yields down relative to global bond yields, possibly pushing them lower. 
This will also keep the Australian dollar relatively soft. 
So far the Australian share market appears to be looking through the short-term hit to economic growth focusing more on the rebuilding boost, but the negative impact of the bushfires risks seeing it remain a relative underperformer versus global shares. 
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SHANE OLIVER is Head of Investment Strategy and Chief Economist at AMP Capital. 
Main photo credit: Andrea Schaffer
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soliver-smf6LQXgW9

Bushfires and the Australian economy: Oliver's Insights

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EXPERT OBSERVER
For 40 years I have studied bushfires in Australia. It has been my life’s work to try to better understand Australian landscapes and the interaction of humans and landscape fire.
As we contemplate a future where catastrophes like the one currently engulfing Australia become increasingly frequent, there’s an idea to which I keep returning: maybe it’s time to say goodbye to the typical summer Australian holiday.
Perhaps it’s time to rearrange Australian calendar and reschedule the peak holiday period to March or April, instead of December and January.
It’s easy to dismiss this idea as stupid but that’s the nature of adaptation. Things that once seemed absurd will now need serious consideration.
What’s truly absurd is the business-as-usual approach that sees thousands of holidaymakers heading directly into forests and national parks right in the middle of peak bushfire season.
All of the indications are that we are galloping into changing fire regimes. We can certainly see that with what’s occurred in the Australian alps (the snow country in southeastern Australia, near Mount Kosciuszko). There were incredibly intense fires there <a href="https://www.smh.com.au/national/fires-fanned-by-worst-imaginable-conditions-20030131-gdg702" target="_blank">around the early 2000s</a> and now those areas are re-burning.
To me, as a fire researcher, that’s an astonishing thought.
Yes, there have been very large fires in the past but they weren’t followed up with yet more very large fires a mere 15 years later. Normally, you’d be <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/gcb.12433" target="_blank">expecting</a> a gap of <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/geb.12484" target="_blank">50 or 100 years</a>. So the ecology is telling us that we are seeing the intervals between the fires shrinking. That is a really big warning sign.
And this increasingly frequent fire activity is completely consistent with what climate modelling was <a href="https://www.publish.csiro.au/WF/WF13126" target="_blank">suggesting</a>. The whole system is moving to a world that is hotter, drier, and with more frequent fire activity. It’s what was <a href="https://www.environment.gov.au/climate-change/adaptation/publications/fire-regimes" target="_blank">forecast</a> and it’s what is now happening.
<h2>Big holidays in peak fire season</h2>
One of the great exacerbating factors of this crisis is the fact that it’s occurring in a holiday period. It makes things incredibly difficult for emergency management. The fact is that it would be a lot easier for firefighters to focus on stemming fires if they didn’t also have to manage mass evacuations, and deal with populations that are dispersed and far from home.
Scheduling the major Australian holiday at the same time as bushfire season also makes things extremely difficult for the enterprises that depend on the holiday trade. You need certainty to run a business and timing the major annual Australian holiday period with bushfire season strips certainty away from these business owners.
It’s also really terrible for holidaymakers themselves. People are in desperate need of a break, to spend time with family. Instead of returning to work rested and re-energised, many will be stressed, tired, perhaps even traumatised. (And let’s not forget the firefighters themselves, also denied a break with friends and family over the holidays).
And having the major holiday right in the middle of bushfire season also means that many people are denied a chance to experience national parks, as authorities close them off to reduce risk.
<h2>Adaptation means change, and change is hard</h2>
The old idea was that we can head off the crisis by reducing our emissions through decarbonisation. We had an opportunity to do that and we didn’t take it. We still have to decarbonise but now we also have to adapt.
And the sort of adaptation needed is not just about infrastructure, it’s also about the way we shape our lifestyle, our culture and traditions.
Climate change adaptation will nearly always be met with political, social and cultural resistance. It is not easy. But something like completely rearranging the Australian calendar around increased risks – it’s not even the biggest change required of us.
Some of the other things we are going to have to do will at first seem absurd, will be unbelievably painful economically and will require major adjustments.
There’s going to need to be a systematic change in behaviour and lifestyle as we adapt.
This crisis occurring in peak holiday time is highlighting the fact that the assumptions of normality we have got are being challenged by climate change.
It is confronting, but adaptation also brings with it great benefits – less loss of life, greater certainty and opportunity for businesses and holidaymakers, and smoother handling of fire crises as they emerge.
We need to put some serious thought into what future life will be like under climate change. Perhaps shifting peak holiday season to the cooler months is the place to start.<img src="https://counter.theconversation.com/content/129337/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
<a href="https://theconversation.com/profiles/david-bowman-4397" target="_blank">David Bowman</a>, Professor of Pyrogeography and Fire Science, <a href="http://theconversation.com/institutions/university-of-tasmania-888" target="_blank">University of Tasmania</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/as-bushfire-and-holiday-seasons-converge-it-may-be-time-to-say-goodbye-to-the-typical-australian-summer-holiday-129337" target="_blank">original article</a>.
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As bushfire and holiday seasons converge, it may be time to say goodbye to the typical Australian summer holiday

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EXPERT OBSERVER
Sydney is currently blanketed by smoke haze from severe bushfires that have burned through New South Wales.
Air pollution levels on Thursday reached <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-11-21/sydney-smoke-from-fires-unlikely-to-clear-today-authorities-warn/11723876" target="_blank">hazardous levels</a> for the second time in a week. The NSW Rural Fire Service has warned that haze could be around for days.
On Thursday, several locations in Sydney had air quality index levels above 1,000. Anything over 200 is considered hazardous. Health authorities in Sydney have asked children to stay indoors.
You might be surprised to hear that while air pollution is <a href="https://www.who.int/health-topics/air-pollution" target="_blank">bad for our health</a>, it can also be bad for the economy.
In our forthcoming study in the <a href="https://fbe.unimelb.edu.au/research/streams/decision-making-and-markets/market-impact-of-chinese-haze-events" target="_blank">Journal of Corporate Finance</a> we show that air pollution impairs forecasts by financial analysts. This has implications for our financial system, which relies on accurate and timely information.
Air pollution has been <a href="https://www.theguardian.com/environment/2016/may/12/air-pollution-rising-at-an-alarming-rate-in-worlds-cities" target="_blank">rising worldwide</a>. Currently, four in every five city dwellers are exposed to dangerous levels of outdoor pollution. We know that as well as harming physical health, it hurts <a href="https://www.aeaweb.org/articles?id=10.1257/aer.102.7.3652" target="_blank">worker productivity</a>.
We investigated whether it also harms the decision-making ability of financial analysts. This is important because their reports play a crucial role in the functioning of capital markets.
<a href="https://images.theconversation.com/files/302898/original/file-20191121-515-1iebhwu.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/302898/original/file-20191121-515-1iebhwu.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt=""></a>
Beijing smoke haze, November 2018. ROMAN PILIPEY/EPA
China is an ideal place to study it.
Over the past 20 years China has faced severe air pollution, including the infamous “<a href="https://qz.com/159105/2013-will-be-remembered-as-the-year-that-deadly-suffocating-smog-consumed-china/" target="_blank">airpocalypse</a>” which struck Bejing in 2013, when average air quality levels remained hazardous for much of the year.
Recently China has made headway in reducing air pollution, but it remains a significant issue.
China is not alone – emerging and developing nations such as Brazil, India and Iran face similar problems – so our study is useful for understanding the economic effects of pollution elsewhere.
We examined the pollution levels in different cities on the days Chinese companies announced their earnings.
<h2>The more hazy the location, the more hazy the thinking</h2>
Most Chinese companies are followed by analysts in a number of Chinese cities. On earnings days, some are experiencing haze and others are not.
We were able to examine more than 59,000 publicly available forecasts from more than 2,000 analysts. We used published phone numbers to identify their locations.
We found those that were exposed to haze produced less bold forecasts, less timely forecasts, and less accurate forecasts
Analysts exposed to pollution were
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<li>
4.8% less likely to differentiate their forecasts from those of other analysts
</li>
<li>
4% less likely to incorporate the new information from the announcements into their forecasts
</li>
<li>
14% less likely to revise their forecasts at all within two days the announcements.
</li>
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<h2>Hazy thinking matters</h2>
We are not sure why. We know that air pollution has negative effects on physical health and <a href="https://www.propertyobserver.com.au/https://www.ncbi.nlm.nih.gov/pubmed/25673816">mood</a> and we know that financial analysts are exposed to pollution not only when outside, but also at home and in the office, since filtering systems <a href="https://www.propertyobserver.com.au/https://www.tandfonline.com/doi/abs/10.1080/02786820117903" target="_blank">cannot completely clean the air</a>.
Investors rely on analysts to provide information. Earnings announcements are key information events. Poor forecasts resulting from those events are an indirect negative effect of high levels of pollution.
Those indirect negative effects might be widespread, extending as far as manufacturing, schools and services industries. They add to the case for cleaning up air.
<a href="https://theconversation.com/profiles/naomi-soderstrom-892532" target="_blank">Naomi Soderstrom</a>, Professor of Accounting and Deputy Head of Department, <a href="http://theconversation.com/institutions/university-of-melbourne-722" target="_blank">University of Melbourne</a> and <a href="https://theconversation.com/profiles/chao-kevin-li-892606" target="_blank">Chao Kevin Li</a>, Lecturer School of Accounting, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/smoke-haze-hurts-financial-markets-as-well-as-the-environment-127511" target="_blank">original article</a>.
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