The Regional Impacts of Climate Change

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4.1. Background Characterization of Region

Summary: This region is defined here as Australia, New Zealand, and their outlying islands. Australia is a large, flat continent spanning the tropics to mid-latitudes, with relatively nutrient-poor soils and a very arid interior, whereas New Zealand is much smaller, mountainous, and well watered. Both have "Gondwanan" ecosystems and unique flora and fauna. They have been subject to significant human influences-particularly from fire, agriculture, deforestation, and introduced exotic plants and animals. The total land area is 8 million square kilometers, and the population is 22 million. In contrast to other OECD countries, commodity-based industries of agriculture and mining dominate the economies and exports. Tourism is a major and rapidly growing industry.

Australia is a large, ancient, eroded, and relatively flat continent, similar in size to Europe or the continental United States, with generally nutrient-poor soils. Situated between the Indian and Pacific Oceans, it is bordered to the north at 11�S by tropical waters and to the south at 44�S by the cold and windy Southern Ocean (Figure 4-1). It is the only major OECD country that lies largely in tropical and subtropical latitudes. In contrast, New Zealand is much smaller; it comprises two narrow, geologically young, and mountainous main islands located wholly in the mid-latitudes, from 35�S to 48�S. The total land area of the two countries is 8 million km2. Small offshore islands greatly extend both countries' jurisdictions. Key geographical features of the region are its relative isolation in an oceanic hemisphere, Gondwanan ecosystems and unique flora and fauna, low human population densities, and significant climatic features such as the ENSO phenomenon, the very arid interior of Australia, and tropical cyclones.

Figure 4-1: The Australasia region [compiled by the World Bank Environment Department Geographic Information System (GIS) Unit;].

The ecosystems of the region are extremely varied, owing to the range of climates arising from the large latitudinal range, the continentality of Australia, and the mountainous, maritime nature of New Zealand. Australia has mainly rainfall-limited ecosystems (both natural and agricultural), although high temperatures also are limiting to crop production in some more northern areas. New Zealand has generally ample rainfall and mainly low-temperature limited ecosystems. More important biomes include the interior Australian deserts; semi-arid shrublands and savannas; tropical and temperate grasslands; tropical and temperate rainforests; sclerophyll forests and woodlands; alpine zones in southeast Australia and New Zealand; freshwater and coastal wetlands; tropical and subantarctic islands; coral reefs; and deep ocean systems. Land-use is reported as being 6% cropland (with a large fraction irrigated), 55% permanent pasture (much of it semi-arid rangelands), 19% forest and woodland, and 20% other (see WRI, 1996, Table 9.1; see also Annex D of this report).

Many parts of the region have been subject to significant human influences, particularly from the use of fire, widespread agriculture, vegetation clearance, deforestation, and other land-use change and from the introduction of exotic plants and animals-particularly rabbits and foxes in Australia and rabbits, deer, and Australian possums in New Zealand. Owing to millions of years of isolation, the region has a very high proportion of endemic species (plants and animals found only in this region), and its ecosystems are extremely vulnerable to introduced pests, diseases, and weeds. Environmental pollution is relatively low, in line with the low human population. Local air and water pollution from urban industries, land transport, and intensive farming and related processes are of concern in some areas, and soil erosion, rising water tables, and dryland salinization (as a result of land clearing and irrigation) are a concern in Australia (SOEC, 1996).

The region's present population is about 18.5 million (Australia) and 3.5 million (New Zealand). Population growth of about 1.6% per annum is higher than the average for OECD countries, largely due to immigration. About 85% of the population live in urban and suburban areas, mostly near the coast. Half of Australia's population lives in just four coastal cities. Average population density is low; even when arid areas are excluded, it is only about 5 persons/km2 for Australia (see Annex D). Both countries have strong relationships with Pacific island countries, in some cases extending to specific constitutional responsibilities, and they are home to sizable populations of Pacific Islanders. Large populations outside the region are dependent on the region's agricultural exports.

The two countries have open market economies, are members of the OECD, and in general have good access to the capital, technological, and human resources needed to adapt to the impacts of climate change. Per capita GDP is currently about US$19,000 in Australia and US$14,000 in New Zealand (the lower values in Annex D are calculated on a different, comparative purchasing power basis). Real annual growth rates have been about 3%, and inflation is low. Unemployment is about 8-10%.

Primary industries are a cornerstone of the region's economy. These industries include Australia's low-input pastoralism (grain, meat, and wool) and irrigated agriculture and horticulture and New Zealand's meat, wool, dairy, and horticulture industries, together with the associated processing industries in both countries. Forestry, fishing, and tropical crops also are important. Australia is a major exporter of coal, as well as energy-intensive iron, steel, and aluminium. Coal reserves are about 100 billion tonnes, with annual production of about 200 million tonnes, mostly for export. About two-thirds of New Zealand's electricity is hydro-generated. The bulk of the region's exports is raw or processed agricultural and mining products; in this respect the regional economies are anomalous among OECD countries, being more like the less developed and emerging economies (Crocombe et al., 1991). Thus, regional exports are heavily exposed to fluctuations in world commodity prices and trading conditions.

Tourism in the region-which is largely dependent on landscape, biodiversity, and climate-is growing faster than the global average and now contributes about 13% of all export earnings, exceeding traditional export earners such as wool and wheat.

Socioeconomic trends in the region are similar to those in other developed countries. The population is aging, and there is a continuing shift of employment and population from lower value, commodity-related activities to higher value manufacturing and service activities. There is more intensive use of the less arid and more nutrient-rich land, especially for horticulture; in New Zealand especially there is rapid development of plantation forestry.

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