Rapid Sea Level Rise: What is the Risk?

This article is co-authored by Dr Felicity McCormack, Senior Lecturer, Monash University, and Dr Tom Mortlock, Climate Risk Advisory Analytics Lead, Asia Pacific, Aon.

Since the early twentieth century, global mean sea levels have risen by about 0.2 meters^[1], with at least 70% of this change since 1970 attributable to anthropogenic warming^[2]. Accelerating melt from glaciers and ice sheets, particularly in Antarctica and Greenland, is expected to become the dominant factor in the twenty-first century, potentially contributing to sea level rises of 0.44m to 0.77m by 2100.

The catch here is the word likely, as the potential scenarios modelled include the possibility of 2-5m of sea level rise by 2150 due to potential rapid ice melt events in Antarctica^[3]. This uncertainty is due to unknowns in the timing and processes of large-scale ice sheet retreat, which are difficult to measure and model accurately^[4],[5].

Sea level rise conflates pre-existing coastal hazards such as storm surges and wave impacts^[6], leading to more frequent coastal flooding and erosion events. In Australia, the frequency of extreme sea level events has significantly increased over the last century^[7], with minor coastal flooding becoming more common in cities like Sydney, Melbourne, and Brisbane^[8]. Globally, extreme sea level events could become at least ten times more frequent by the end of the 21st century^[9].

The risk of coastal erosion and flooding falls on property owners, businesses, and governments. In Australia, most home insurance policies exclude such “actions of the sea,”^[10] leaving homeowners and potentially lenders to bear the risk.

How much risk is there?

Aon’s analysis indicates that:

• approximately 370,000 residential properties and 120,000 commercial or industrial properties in Australia face a 1% risk of coastal flooding annually^[11].
• This risk equates to a 25% chance of flooding over a typical 30-year mortgage period
• These uninsurable properties may potentially lead to defaults and devalued collateral.

Addressing the uncertainties in sea level rise projections requires greater investment in climate models that accurately represent ice sheet processes. Additionally, incorporating expert elicitation and alternative methods can help bridge the gaps in current coastal risk assessments^[12], ensuring that even low-probability, high-impact scenarios are considered in long-term planning and infrastructure design.

Read more about rising sea levels, their impact on Australia and associated insurance issues.

[1] Cambridge University Press, Ocean, Cryosphere and Sea Level Change (Chapter 9) – Climate Change 2021 – The Physical Science Basis, June 2023

[2] Nature Climate Change, Anthropogenic forcing dominates global mean sea-level rise since 1970, April 2016

[3] Cambridge University Press, Ocean, Cryosphere and Sea Level Change (Chapter 9) – Climate Change 2021 – The Physical Science Basis, June 2023

[4] Global Health Education and Learning Incubator, Harvard University, The Global Tipping Points Report 2023, 2023

[5] Science, Exceeding 1.5°C global warming could trigger multiple climate tipping points, September 2022

[6] Storm surge refers to the additional raising of coastal water levels from wind setup and/or the inverse barometric effect. The former relates to water piling up at the coast because of strong, onshore-directed winds, while the latter is associated with low atmospheric pressure produced by coastal storms (e.g., East Coast Lows, or Tropical Cyclones) allowing water levels to rise beyond their normal levels. The combined storm surge plus high tide in Australia is known as a “storm tide” or colloquially “king tide”. Waves can further elevate coastal water levels on top of a storm tide, a process known as wave setup. Storm waves breaking on the beach can lead to overtopping of coastal defences and dune systems. Storm tide is the primary driver of coastal flooding during storm events, whereas wave processes lead to coastal erosion.

[7] University of Tasmania, Sea-level rise around the Australian coastline and the changing frequency of extreme sea-level events, May 2023

[8] Monash University, Trends, projections, and drivers of frequent coastal flooding under sea-level rise, November 2023

[9] Cambridge University Press, Chapter 4: Sea Level Rise and Implications for Low-Lying Islands, Coasts and Communities — Special Report on the Ocean and Cryosphere in a Changing Climate, 2019

[10] Insurance Council of Australia, Climate Change Impact Series: Actions of the Sea and Future Risks, October 2021

[11] This estimate comes from Aon’s Combined Hazards Information Platform (CHIP) current as of 2024. It includes the covariant risk of storm surge and high tides, but does not include the effect of waves, nor the risk of coastal erosion which may accompany coastal flood events. It does not account for the freeboard that may exist between the ground level and the floor level of the property.

[12] Nature Climate Change, Prediction-market innovations can improve climate-risk forecasts, September 2022