This 2025 Climate Change snapshot from the Australian Institute of Company Directors (AICD) and CSIRO informs Australian directors about the current state of climate change science, particularly its implications for Australia. It is designed to to support boardroom discussions on scenario analysis and transition planning.
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Directors must prioritize the integration of the latest climate science into their strategic planning and risk management processes, undertake robust scenario analysis, and ensure they have the necessary expertise to navigate the complexities of a changing climate.
The 14 page report is aimed at the Board of Directors and Management teams, however, the NetNada team emphasizes that sustainability leads and consultants can benefit from distilling this information and use it as a way to start their governance deliverables and risk conversations
The AICD snapshot that Australia's warming has exceeded the global average, with significant risks from extreme events already evident. The document outlines the global trajectory of emissions and warming, emphasizing the likely breaching of the 1.5°C threshold this decade.
Furthermore, it details the observed and projected climate changes across Australia alongside potential impacts on various sectors including:
- temperature increases
- altered rainfall
- and sea-level rise
The snapshot concludes by posing key questions for boardroom discussions around climate risk management and scenario planning.
1. Current State of Global and Australian Climate:
Global Warming: The global average temperature has risen by about 1.2°C since the mid-19th century due to human activities. 2024 was the warmest year on record globally, approximately 1.55°C above pre-industrial levels (though this single year figure is noted as potentially less indicative than decadal averages).
2024 was the warmest year on record globally. The temperature of the Earth’s surface, averaged across the whole globe, was greater than for any year in the observational record.
Australian Warming: Australia has warmed significantly more than the global average, by more than 1.5°C since the mid-19th century. Since 1910, the warming of the Australian land surface is around 1.5°C.
Australia has warmed by more than 1.5°C since the mid-19th century, whereas the globe has warmed by about 1.2°C
Sea Level Rise: Global average sea levels have risen by around 22cm since 1900, with half of this rise occurring since 1970. Rates of sea level rise around Australia have varied, with larger increases in the north and south-east.
Extreme Weather: There has been an increase in the frequency and intensity of extreme climate events globally, including heatwaves, altered rainfall patterns, more intense storms, increased fire weather, and rising sea levels. Australia is also experiencing these trends.
A large component of these risks is from increases in the frequency and intensity of extreme climate events
2. Future Global Climate Outlook:
Exceeding 1.5°C: With current global policies, the world is on a path to around 3°C of warming by the end of the century. Without immediate significant emissions reductions, the 1.5°C threshold is likely to be breached around the end of this decade, and the 2°C limit may be breached around the middle of the century if current emission rates continue.
Without an immediate significant reduction in global emissions, the 1.5°C threshold is likely to be breached around the end of this decade.
Net Zero Emissions: Climate stabilization requires global greenhouse gas emissions to reach net zero. For CO₂, this involves reducing emissions as close to zero as possible and offsetting remaining emissions with Carbon Dioxide Removal (CDR) technologies.
The climate can begin to stabilise only once global greenhouse gas emissions reach net zero.
Emissions Gap: Global CO₂ emissions from fossil fuels are not yet declining and reached a record high in 2024. While emissions from land-use change have decreased, total emissions have leveled off after a century of growth.
Global CO₂ emissions are not yet declining. The most recent assessment shows annual fossil fuel emissions of CO₂ continuing to rise, reaching a record high in 2024.
Challenges to Limiting Warming: The CO₂ emissions expected from existing fossil fuel infrastructure are already enough to push warming above 1.5°C. Limiting warming to this level will likely require rapid and large-scale deployment of CDR and potentially retiring existing infrastructure early.
Natural Carbon Sinks: Land and ocean ecosystems have historically absorbed about half of human CO₂ emissions, but their effectiveness may decline as CO₂ levels rise and the climate changes, potentially amplifying warming.
Overshoot Scenarios: It is increasingly likely that limiting warming to 1.5°C, and possibly 2°C, will involve temporarily exceeding these limits (an overshoot). Overshooting carries greater physical risks, including potentially irreversible damage to ecosystems and an increased risk of triggering climate tipping points.
Climate Tipping Points: Further warming increases the risk of triggering global climate tipping points, such as the accelerated loss of ice sheets, Amazon rainforest dieback, and weakening of the Atlantic Ocean circulation, leading to potentially irreversible and cascading changes.
3. Australia's Changing Climate and Outlook:
Increasing Climate-Related Hazards: Australia is experiencing increasing socioeconomic costs due to a combination of chronic hazards (e.g., rising temperatures, sea levels, ocean acidification, decreasing rainfall in some regions) and acute hazards (e.g., heatwaves, marine heatwaves, floods, storms, bushfires).
The most recent Intergovernmental Panel on Climate Change (IPCC) Assessment Report shows the socioeconomic costs of climate variability and climate change have been increasing in Australia.
Changes in Average Conditions:
- Temperature: Continued warming is expected. By the 2050s, Australia's hottest year on record (2019) could be an average year.
- Rainfall: Rainfall is decreasing in southern Australia, particularly during the cool season.
- Sea Level: Sea level rise will continue throughout the 21st century and beyond.
- Changes in Extreme Events:Heatwaves: Frequency and intensity will increase.
- Tropical Cyclones: Number is expected to decrease, but intensity of those that occur is likely to increase.
- Heavy Rainfall: Intensity has increased in some regions, with associated flooding risks expected to continue.
- Bushfires: Fire seasons have become more intense, starting earlier and lasting longer, and these trends are expected to continue.
- Marine Heatwaves: Frequency, duration, and intensity will increase.
Future Impacts Depend on Warming Level: The severity of future climate change impacts on Australia's environment, economy, and people will depend on the level of global warming. A 3°C warming scenario could have extremely severe consequences. Meeting the Paris Agreement goals will limit impacts but still require significant mitigation and adaptation.
Compound Events and Cascading Impacts: Australia faces a major risk from compound events (multiple extreme events occurring simultaneously or sequentially) and cascading impacts (where the initial impact triggers knock-on effects), leading to greater overall consequences. The Tasmania 2015-2016 event (bushfires, floods, low hydropower, marine heatwave) serves as a notable example.
Quote: "Climate change is expected to make extreme events more frequent and intense, increasing the risk of compound hazards and cascading impacts."
Key Climate Change Risks for Australia: The IPCC has identified key risks for Australia, with increasing severity at higher levels of global warming, impacting sectors such as marine fisheries, tourism, forestry, agriculture, health, critical infrastructure, and governance systems (see Table 1 in the source document for specific examples).
4. Key Questions to Guide Boardroom Discussions:
The report concludes with crucial questions for directors to consider:
- Integrating Climate Knowledge: "What is our process for integrating the latest climate knowledge into our strategy and risk management approaches? Is a ‘storylines’ approach appropriate?"
- Scenario Analysis: "What process do we need to follow to undertake robust scenario analysis for our organisation? Are our chosen scenarios aligned with the Paris Agreement goals, and do they also consider alternative global projections with increased greenhouse gas emission concentrations?"
- Transition Plan Assumptions: "What scientific assumptions are underlying our transition plan?"
- Board/Management Upskilling: "How is the board/management team upskilling themselves on physical risks and their material implications for our organisation?"
- Expertise and Support: "What expertise do we need internally and/or can access externally to support us to understand and manage climate change impacts and risks?"
The scientific evidence clearly indicates substantial warming and increasing extreme weather events, with potentially severe consequences in the future, particularly if global warming exceeds the Paris Agreement targets. Directors must prioritize the integration of the latest climate science into their strategic planning and risk management processes, undertake robust scenario analysis, and ensure they have the necessary expertise to navigate the complexities of a changing climate. The provided key questions offer a valuable starting point for critical boardroom discussions on these vital issues.
You can download the complete 2025 Climate Change Snapshot document from AICD here.
Frequently Asked questions related to Climate Change in Australia
1. How much has the global average temperature risen since pre-industrial times, and what are the implications?
The global average temperature has risen by approximately 1.2°C since the mid-19th century due to greenhouse gas emissions from human activities. This seemingly small increase has already led to significant climate changes, including more frequent heatwaves, altered rainfall patterns, more intense storms, increased frequency and severity of fire weather, and rising sea levels. Furthermore, this level of warming puts the world on a trajectory to exceed 1.5°C around the end of the current decade, which will bring significant additional climate hazards.
2. What are the goals of the Paris Agreement, and how are global emissions tracking against these goals?
The Paris Agreement, adopted by 196 countries (excluding the US as of January 2025), aims to limit the increase in global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C. However, current global policies have the world on a path to around 3°C of warming by the end of the century. Alarmingly, global carbon dioxide emissions are not yet declining and reached a record high in 2024. Without immediate and significant reductions, the 1.5°C threshold is likely to be breached around the end of this decade, and the 2°C limit could be breached around the middle of the century.
3. What is "net zero emissions," and why is it important for climate stabilization?
Net zero emissions refers to a state where the amount of greenhouse gases being released into the atmosphere is balanced by an equivalent amount being removed on an ongoing basis. Achieving the goals of the Paris Agreement requires reaching net zero CO₂ emissions (along with reductions in other greenhouse gases). Once net zero is reached, the global average temperature will begin to stabilize within decades, although other climate changes like sea-level rise will continue for centuries. Reaching net zero necessitates a near-complete decarbonization of the global energy system and economy, coupled with the widespread deployment of Carbon Dioxide Removal (CDR) technologies.
4. What is the current state of Australia's climate, and how does it compare to the global average?
Australia's average temperature has risen more than the global average. Since the mid-19th century, Australia has warmed by more than 1.5°C, while the globe has warmed by about 1.2°C. This warming trend is expected to continue. Australia is already experiencing more frequent and intense extreme heat events, a reduction in cool-season rainfall in southern regions, accelerating sea-level rise with regional variations, a decrease in the number of tropical cyclones (but an increase in their intensity when they occur), more intense heavy rainfall in some regions, and longer and more intense fire seasons.
5. What are some of the key climate change risks for Australian organizations and communities?
Climate risks are significant for Australian organizations, communities, and ecosystems, largely due to the increasing frequency and intensity of extreme climate events. These include chronic hazards like increasing mean temperatures, rising sea levels, and ocean acidification, as well as acute hazards like heatwaves, marine heatwaves, floods, storms, tropical cyclones, and bushfires. Physical risks for businesses can involve damage to assets, supply chain disruptions, and market impacts. Additionally, Australia faces the risk of compound events (multiple extreme events occurring simultaneously or sequentially) and cascading impacts, where the initial impact triggers further adverse effects across interconnected systems.
6. What are climate change "tipping points," and what are the potential consequences of exceeding them?
Climate change tipping points are relatively sudden, self-sustaining, and effectively irreversible changes to the global climate system triggered by global warming. Examples include the accelerated loss of ice sheets, dieback of the Amazon rainforest, and a weakening of the Atlantic Ocean circulation. Exceeding warming thresholds increases the risk of triggering these tipping points, and triggering one could potentially set off others in a cascade of irreversible changes. These tipping points could have significant direct and indirect consequences for Australia, affecting its climate, trade, migration, and security.
7. How can Australian organizations approach climate risk management and scenario analysis?
Given the complexities and uncertainties of future climate outcomes, a "storylines" approach is suggested for managing climate risk. This method focuses on plausible scenarios with narratives rather than precise probabilities, exploring how events might unfold based on our understanding of the past, present, and future. For robust scenario analysis, organizations need a clear process aligned with the Paris Agreement goals, considering both lower and higher greenhouse gas emission concentration pathways. It's also crucial for boards and management teams to upskill on physical risks and their material implications and to identify necessary internal and external expertise to support climate risk management.
8. What are some of the potential impacts of different levels of global warming (1.5°C, 2°C, 3°C) on key Australian industries?
The impacts of future climate change on Australia will depend significantly on the level of global warming. At 1.5°C, risks like the loss and degradation of coral reefs are already very high. At 2°C, these risks intensify, and new high to very high risks emerge for sectors like agriculture and coastal infrastructure. If global warming reaches 3°C, Australia could face extremely severe consequences across almost all sectors. For example, coral reefs will be devastated, alpine biodiversity will be lost, forests will transition or collapse, kelp forests will disappear, low-lying coastal areas will be severely impacted, agricultural production will drastically decline, heat-related mortality will surge, and compound events with cascading impacts will become widespread, overwhelming institutions and governance systems.
