‘The worst wildfires’ drag on Australia’s economy, tourism and other industries hit hard

Severe forest fires in many australian sands have been going on for more than four months. Hundreds of fires remain across Australia, making it the worst fire ever recorded in Australia, new figures show. The fire casts a huge shadow over Australia’s production and living life, multiple industrial developments and even The country’s economic prospects.

Smog Affects Global Ecology

So far, the fire has burned more than 10 million hectares and killed at least 28 people, destroyed nearly 2,000 homes and killed an estimated 500 million mammals, birds and reptiles.

Australia is shrouded in smog and the capital Canberra’s air quality was once the lowest among major cities in the world. According to Reuters, Melbourne local time on the 14th foggy weather, scheduled to start at 10 a.m. on the same day, the Australian Open qualifying tournament was postponed. The Victorian Environmental Protection Agency (ESS) showed melbourne’s air quality was “severely polluted” on The 14th. Sydney’s deteriorating air quality in December 2019 has also triggered a rush of masks and a spike in hospital visits, local media reported.

The smoke from the wildfires is even a threat to the global ecology. Large areas of smoke from wildfires in eastern Australia have spread to northern New Zealand, with a smog transmission distance of about 2000km, affecting local air quality. According to the BBC, SATELLITE images show smoke from the Australian wildfires across the Pacific Ocean, across South America, and “around the Earth for half a week” by January 8, the BBC reported. NASA said the smog is expected to orbit the Earth for at least a week and return over Australia.

NASA also said that because of the recent fire, smoke from Australian forest fires could enter the stratosphere, drifting thousands of miles from its original location, affecting the global atmosphere.

Afp reported that thousands of tourists were evacuated from coastal towns and international tourists cancelled their flights, while the U.S. government even raised security advice for travel to Australia, warning people to “be vigilant.” Australia is also one of the Chinese’s most popular outbound destinations for the Spring Festival, but tourism has fallen due to persistent wildfires. The head of a domestic travel company said many guests were worried about local safety and many had air pollution concerns.

Firedrags Australian economy

Economic losses from sustained forest fires in Australia have been rising for four months. The analysis suggests that forest fires will drag down Australia’s economic growth in the fourth quarter of 2019 and the first quarter of 2020, particularly in the areas of tourism, regional trade, construction and agricultural production.

According tomedia reports, Goldman Sachs’ latest analysis believes that Australia’s economic growth is expected to decline by 0.3 percentage points between December 2019 and the first quarter of 2020. Goldman Sachs chief economist Andrew Burke said Australia’s agricultural production and private investment would fall by 3 per cent and tourism by 3 per cent in the first half of the year. Some analysts expect Australia’s GDP growth to rise only slightly to 2.3 per cent in 2020, down from the 2.5 per cent forecast in the previous survey.

Tourism Australia’s director-general, Mr Harrison, said it was too early to estimate the overall impact of the bushfire. Berman, a lecturer at the University of Technology Sydney, estimates that the fires hit during the summer tourist season, almost wiping out holidaymakers across the region, costing billions of Australian dollars.

Reuters said the fire’s disruption to investor and market confidence is likely to last longer and the market will be more concerned about the impact of the country’s runaway wildfires on its economic fundamentals. ANZ’s Australian consumer confidence index fell to 106.2 in the first week of 2020, its lowest level in almost four years. Some analysts say that the Australian economy is currently lacking domestic demand momentum, and for the national major disaster, the Australian federal government lacks a comprehensive emergency response agencies, complete planning, can act quickly and efficient operation mechanisms, and the Australian federal government in the fire fighting inefficiency further affects the outside world’s trust in it, This will cast a shadow over the country’s economic prospects.

Meanwhile, financial markets believe the probability of the RBA cutting interest rates by another 0.25 percentage points next month has risen from 45 per cent before Christmas to 53 per cent today. Security Capital analyst Shaun predicts that with the Australian economy growing by just 0.4 per cent a quarter and the bushfires pulling down GDP growth by at least 0.25 percentage points, this could bring real economic growth close to zero, which will undoubtedly put more pressure on the RBA to cut interest rates.

Andrew Burke expects the RBA to point out the downside risks to the economy from the bushfires in its February monetary policy statement, but at this stage the fire will not seriously affect the RBA’s core forecast or policy decisions on economic growth.

The urgent need to reshape the climate governance system

In recent years, forest wilderness fires around the world have been frequent, and they are much larger than in the past. In addition to Australia, the California fires, the Amazon rainforest fires in Brazil, the pine forest fires in Athens, Greece, and forest fires in Siberia and the Far East of Russia are all recorded. According to the World Resources Institute, the number of fire alerts in 2019 was about four times higher than in any other year in the past 20 years.

According to the latest figures from the World Meteorological Organization, the years of 2015-2019 and 2010-2019 are almost the warmest on record, five years and ten years, respectively. The Global Carbon Budget 2019, released in December 2019 by the Global Carbon Plan, an international non-governmental organization, shows that global carbon emissions will remain at new highs as coal use is reduced and climate issues are a priority in many countries around the world.

Climate change has increased the likelihood of disasters creating more forest-prone weather conditions in many parts of the planet, according to an assessment released on January 14th by Imperial College. The assessment shows that rising global temperatures, more frequent heat waves and drought conditions in some areas are more likely to create dry, hot weather conditions, increasing the probability of forest fires. The report notes that about 25 percent of the earth’s vegetation-covered areas have extended forest fire seasons, resulting in an increase of about 20 percent in the average duration of the global “fire-risk” season.

Richard Bates, head of climate impact research at the Met Office’s Hadley Centre, said fires were becoming worse and more common as a result of climate change. Richard also stressed that keeping global warming strictly below 2Degrees C would help avoid further increases in the risk of extreme fire weather. Some experts have called for many countries to be more concerned about how to promote economic growth in the face of downward pressure on the economy, at this time the world urgently needs to join forces to reshape the climate governance system.