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Commonwealth Bank warns climate change could slash farm productivity

The dairy industry, too, faces “falls in most regions” of as much as 40 per cent drop in profitability by 2060 because of the rising likelihood of significant heat stress, the bank said. After five consecutive days of extreme conditions, cows can stop lactating and producing milk.

The CBA sees climate change hitting farming hard in some parts of the country.

The CBA sees climate change hitting farming hard in some parts of the country.
Credit:Glenn Hunt

The Commonwealth Bank is among the first big lenders to signal concern about farming productivity in the future.

The bank, though, said “adaptive measures” could be moderate and even reverse those declines, such as the introduction of genetically modified grain able to increase the crop’s resilience to extreme weather.

Similarly, new technology could help reduce overgrazing, while shade and water sprays could help keep cows cool, the bank said.

Even so, conditions may still deteroriate too much for some farms to cope.

“[T]he trend of declining rainfall could result in some regions becoming significantly less viable for crop production in the long term,” the bank said.

Erwin Jackson, director of policy at Investor Group on Climate Change, said the physical effect of climate change was “increasingly recognised as a systemic financial risk requiring the same levels of governance and active management as any other dimension of material financial performance”.

“Sophisticated investment tools are rapidly emerging to strengthen the resilience of infrastructure, the economy and our communities to the effects of climate change,” he said.

“However, there are a number of practical barriers to investing in and supporting climate change adaptation [and] governments have a clear role in helping overcome these barriers.”

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