It has not been assumed that all the impacts of climate change will be detrimental. Indeed, several studies have looked at possible benefits. Moreover, adaptation is a means of maximizing such gains as well as minimizing potential losses.

However, it must be said that potential gains have not been well documented, in part because of lack of stakeholder concern in such cases and consequent lack of special funding. Examples that have not been fully documented include the possible spread of tropical and subtropical horticulture further poleward (but see some New Zealand studies, on kiwi fruit, for example—Salinger and Kenny, 1995; Hall and McPherson, 1997b). In southern parts of Australia and New Zealand, notably Tasmania, there could be gains for the wine industry, increased comfort indices and thus tourism, and in some scenarios increased water for hydroelectric power generation.

Guest et al. (1999) have documented possible decreases in winter human mortality alongside possible increased summer mortality (see Section 12.7.1), and Howden et al. (1999d) have shown that Australian wheat yields may increase for 1 or 2°C warming, before showing declines at greater warmings (see Section 12.5.3 and Figure 12-3). A similar situation may apply to forestry (see Section 12.5.4). Such studies take account of gains from increased CO₂ concentrations. Changes in overseas production and thus in markets in some cases also could lead to greater demand and higher prices for Australian and New Zealand primary products (see Section 12.5.9), but only if such changes do not disrupt world trade in other ways (e.g., lower capacity to pay).

Vulnerability and adaptation to climate change must be considered in the context of the entire ecological and socioeconomic environment in which they will take place. Indeed, adaptations will be viable only if they have net social and economic benefits and are taken up by stakeholders. Adaptations should take account of any negative side effects, which would not only detract from their purpose but might lead to opposition to their implementation (PMSEIC, 1999).

Adaptation is the primary means for maximizing gains and minimizing losses. This is why it is important to include adaptation in impact and vulnerability studies, as well as in policy options. As discussed in Chapter 18, adaptation is necessary to help cope with inevitable climate change, but it has limits; therefore, it would be unwise to rely solely on adaptation to solve the climate change problem.

In some cases adaptation may have co-benefits. For example, reforestation to lower water tables and dryland salinization or to reduce storm runoff may provide additional income and help with mitigation (reduction of GHG emissions). However, other potential adaptations may be unattractive for other reasons (e.g., increased setbacks of development in coastal and riverine environments). These considerations have particular application in Australia and New Zealand. Studies of adaptation to climate change in Australia and New Zealand are still relatively few and far between. They are summarized in the remainder of this section.

Over the past decade there have been several national and regional assessments of the possible impacts of climate change. A regional assessment for the Macquarie River basin was done by Hassall and Associates et al. (1998, reported in Basher et al., 1998); Howden et al. (1999d) made a national assessment for terrestrial ecosystems (see Section 12.5). Two other preliminary regional assessments cover the Hunter Valley in NSW (Hennessy and Jones, 1999) and the Australian Capital Territory (Baker et al., 2000). The former was based on a stakeholder assessment of climate change impacts that identified heat stress in dairy cattle as a subject for a demonstration risk assessment. Thresholds for heat stress and the probability of their being exceeded were evaluated, as were the economic value of adaptation through installation of shade and sprinklers (see Section 12.5.2; Jones and Hennessy, 2000). Baker et al. (2000) made a preliminary qualitative assessment of the impacts of scenarios on the basis of the CSIRO RCM at 60-km resolution (Hennessy et al., 1998) on a wide range of sectors and activities.

However, most integrated studies in Australia and New Zealand have been "one-off" assessments, have lacked a time dimension, cannot readily be repeated to take account of advances in climate change science, and often have not placed the problem in its socioeconomic context. Several groups are collaborating on integrated modeling systems that overcome these drawbacks. In New Zealand this is called CLIMPACTS (Kenny et al., 1995; Warrick et al., 1996; Kenny et al., 1999, 2000), and an Australian system called OZCLIM has been based on it. These integrated models contain a climate change scenario generator, climate and land surface data, and sectoral impact models. They provide a capacity for time-dependent analyses, a flexible scenario approach, a capability for rapid updating of scenarios; and inclusion of models for different sectors. One application is reported in Section 12.5.2.

OZCLIM contains regional climate patterns for monthly temperature and rainfall over Australia from several GCMs and the CSIRO RCM. They can be forced or scaled by the latest emission scenarios, and variables include potential evapotranspiration and relative humidity. It is being adapted to produce projected ranges of impact variables and to assess the risk of exceeding critical thresholds (CSIRO, 1996b; Jones, 2000; Pittock and Jones, 2000).

There are different levels and styles of integration in impact and adaptation assessment, and several of these have been attempted in Australia and New Zealand. Bottom-up integration was done for a range of climate change scenarios in the water supply, pasture, crop, and environmental flow sectors for the Macquarie River basin study by Hassall and Associates et al. (1998). It also has been done in a more probabilistic way to take account of uncertainty, with a focus on the probability of exceeding a user-defined threshold for performance and the need for adaptation (Jones, 2000).

Top-down integration has been attempted via the use of global impacts assessment models with some regional disaggregation—such as a regional analysis based on the Carnegie Mellon University ICAM model, which was used to examine adaptation strategies for the Australian agricultural sector (Graetz et al., 1997). The principal conclusions were that climate matters and that the best strategy is to adapt better to climate variability.

Another top-down approach, based on an Australian regionalization of the DICE model of Nordhaus (1994), is that of Islam (1995). An initial application of this model to quantifying the economic impact of climate change damages on the Australian economy gave only a small estimate, but the authors expressed reservations about model assumptions and the need to better quantify climate impacts (Islam et al., 1997). Others have examined the structure and behavior of the Integrated Model to Assess the Greenhouse Effect (IMAGE) but to date have not applied this to climate change impacts in Australia (Zapert et al., 1998; Campolongo and Braddock, 1999).

A spatially explicit modeling system known as INSIGHT is being developed to evaluate a wide range of economic, social, environmental, and land-use impacts that could affect large areas (Walker et al., 1996). It can map and summarize key social, economic, and environmental outcomes in annual steps to the year 2020. The need for such a system was identified through workshops involving potential stakeholders, and the system could factor in scenarios resulting from climate change.

As pointed out in PMSEIC (1999), much of Australia is subject to multiple environmental problems, of which climate change is only one. This leads to a logical emphasis on regional integrated assessments, which look for adaptations and policies that help to ameliorate more than one problem and have economic benefits.

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