The Kiwi bach is a sinking ship and taxpayers should not pay to bail you out says the Morgan Foundation's Geoff Simmons

The Kiwi bach is a sinking ship and taxpayers should not pay to bail you out says the Morgan Foundation's Geoff Simmons

By Geoff Simmons*

new report from the Parliamentary Commissioner for the Environment (PCE) Jan Wright highlights the perilous status of our national institution – the seaside bach or crib.

The PCE’s report is a summary of the state of the science around anthropogenic climate change as outlined in recent IPCC reports, with a focus on sea level rise.

The report looks at the state of the science via a New Zealand-centred lens.

Sea level rise is happening and it will impact coastal properties and roads during our lifetime.

It is no longer to be seen as a problem for the never, never.

Government, local Councils, insurers, banks, in fact everyone needs to start thinking about how we each will deal with this problem, because it is not going away.

Because it’s predictable the insurance industry is already on the bus, ramping up insurance premiums.

How much sea level rise?

Like the consensus science behind the IPCC reports it is based on, the Commissioner’s report makes for depressing reading, cataloguing the amount of water trapped in ice sheets in Greenland and Antarctica. If we kept burning fossil fuels and it all melted, we would eventually be looking at 64 metres of sea level rise.

However, we will only see a tiny proportion of this melting during our lifetime. Sea levels have risen by 20cm over the past century, and best estimates suggest we will see a rise of 30cm more by mid this century.

So the rate of rise is increasing and depending on how quickly if at all, humankind stops chugging through coal and oil, that number could be up to 1m by the end of the century.

Extreme events remain the main threat for now

Thirty centimetres doesn’t sound like much, that probably only requires the sort of wall that most children will build in a day if given sand, a spade and bucket.

Sadly, walls are a complete waste of time, as they totally underestimate the scale of the problem we face. We don’t have to worry about the 30cm, we have to worry about extreme events.

Each centimetre of sea level rise also raises the water table, making the land more vulnerable to flood. And during a storm, the impact of sea level rise is amplified by stronger winds and bigger waves, especially if they coincide with a king tide. All this increases the risk of extreme events swamping our coastal baches and roads, extreme events that are only more likely to happen in the changing climate of the future.

Take the storm that hit Auckland in 2011 (see video below) – flooding the motorway and overloading drains. In thirty years time, we can expect this level of flooding every ten years. A few decades later, every year.

At what point do we abandon some parts of the country because it becomes too expensive to rebuild the roads, repair the seawalls or salvage the houses?

Who pays?

The Christchurch earthquake was nasty and it created an expectation that government will step in and save us in the event of a catastrophic disaster.

However, this is unlikely to be the case for sea level rise, for a couple of reasons.

Firstly, it is completely predictable – only people with their head in the sand won’t see it or deny it’s coming and follow that through by not insuring or being prepared. Taking such an incredulous position will make it harder for coastal property owners to receive a sympathetic hearing when they come groveling to the taxpayer to restitute them because their precious bach is rendered unliveable.

Secondly, given the amount of coastal property, its value, and the fact that sea level rise is unlikely to stop happening any time soon, the total bill is completely unaffordable even if the government of the day wanted to apply taxpayers funds to compensation.

Seawalls are pointless for exactly the same reason. You can’t beat sea level rise – you just have to go with the flow.

The Insurance Council of New Zealand can see the writing on the wall – they have released a report calling for government action to coordinate national responses to disasters, amend the Resource Management Act to stop development in dodgy areas and to ensure all natural hazards are listed on property LIM (Land Information Memorandum) reports. The Chief Executive of the Insurance Council is under no illusions to the risks we face:

“Climate change will increase the risk of flooding in parts of the country and drought in other areas ... Coastal areas will be more vulnerable as sea levels rise and we can expect more severe windstorms in the west.”

Government needs to act now

Some councils, such as Kapiti, have dared put their head above the seawall and tried to restrict development in areas that are prone to sea level rise. They ended up being taken to court by the landowners whose property values were being put at risk.

Other councils are calling for more leadership from central government to help them do the right thing. But this particular potato is too hot for the government to touch, way too hot.

Unless they act now, many will end up paying dearly.

All we know is that it won’t be the insurance industry – they will be long gone by the time the risk is obvious to even the most obtuse. They are already preparing their escape routes.

It will be left to banks, property owners, or more likely ratepayers and taxpayers, to argue how much if at all they will contribute to bailing people out of what is a completely predictable natural disaster.

Our advice to coastal property owners is to accept the inevitable and either write off an increasing proportion of your seaside treasure, or if you’re not prepared to do that, move out.

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Geoff Simmons is a senior economist at the Morgan Foundation. This article was first published on the blog garethsworld.com and is re-published here with permission.

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21 Comments

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Rubbish.
Government and its Bureaucracy are like leukemia and the flu.
 

That is a pointess comment. Please don't use commenting that way. Comments should improve our coverage, link to other news, data or research to shed more light on the subject, add insight or views on what might happen next or what should happen next, or correct errors. Your comment does none of this. Disagreement is ok, but low quality smears are not.

The local witch doctor doing well for you?  or do you go to men of science when you dont fell well?
regards

As far as I can tell local councils are beginning to address the issue of low lying land for development ie ruby bay Tasman court case.
This needs to be a government function. The delay in setting water standards has created so many unnecesary problems.
If the gov delays setting some coastal dev standards , this will cause unnecessary expense as many local coucils scramble to set standards, the same experts are consulted and much duplication of effort results.

However when councils try and set such standards they get taken to court and the "court" desides on the science? no mother nature does, oh boy.
regards

Geoff, much as I agree with the sentiment of your article just one word of caution. To keep the quality of your writing high avoid the use of arguments of fallacy, the head in the sand comment being an example.
 
As for the size of the rise, well if the rate of consumption of fossil fuels is the cause then the exponential growth of that will be matched by the rise in sea levels. I may not be 30cm, but 30cm per year.

Actually this is intertesting, 95% extinction, 
http://topdocumentaryfilms.com/day-earth-nearly-died/
 We would seem to be heading for a rinse and repeat....5Deg C plus 5 deg C = 95% gone.
in a frigthening sort of way.
regards
 

You could do what they did in North Carolina and vote to ban any predictions of sea level rise they were not happy with (the real estate industry was seen as  having a strong hand in that)
http://www.reuters.com/article/2012/07/03/us-usa-northcarolina-idUSBRE86...
 
 

In Japan there is an almost continuous seawall around the coast. In many places this is in a lovely wave shaped concrete structure to send the wave energy upwards.In other places on-shore and off shore reefs of tetrapods are used. I haven't seen these in NZ. I suspect that the resource Management Act has something to do with this.
I'm sceptical, but if the predictions above come true, we'd better start building these soon in the critical places.
In Dunedin, the Council has just decided to defer a permanent fix at St Clair.......

"They ended up being taken to court by the landowners whose property values were being put at risk."
who won?
 

The landowners at this stage.. but no one, really - as citizens should not have to go to these lengths and small regulators simply have not got the money to get these extremely complex matters right.
 
The High Court judicial review of the LIM process released an interim judgement - requiring that the council review the wording on LIM reports given the coastal science associated with the development of the new hazard lines was as yet untested via the statutory process (a District Plan review). After that, the council decided to have an independent panel of four experts (three coastal scientists and one statistician) review the science on which the hazard lines were determined - and that panel found the outputs not fit for the purpose of setting hazard lines for district planning purposes (a number of errors, but not minor ones, for example certain factors were double counted - making the severity of the hazard projected worse - and a "worst case" scenario was used for other factors when that is not what the legislation requires etc.).
 
So those new hazard lines were dumped, LIM information was changed (reverted back to the prior/operative hazard definitions) and the council is setting up a coastal advisory group (made up of citizens and regulators) to determine what is necessary to re-work the outputs. The High Court is yet to release its final judgement. It will be interesting, as of course we now have a case of a regulator placing (what many would see as quite damaging) misinformation about a potential hazard on a LIM.  Granted, the bad science has been removed but the fact remains that it was ever able to get there in the first place. 

This has just been released as well,
http://www.hivenews.co.nz/articles/775-banks-insurers-bach-buyers-and-tr...
30cm rise, but of course also severe storms are more likely and more likely to be bigger.
Bound to end well....yes indeed.
regards

So the expectations  are for  upto 6mm a year with there having been only 2mm last century.
So how does that compare with the last 20,000 years? Answer, average for the last 20,000 years is 6mm.
anyone who builds on the coast and expects a bailout in  a disaster is probably quite realistic considering the past attitudes and actions of both local and Central govt.

So the ratepayer and/or tax payer is expected to pay.  However for leaky homes the owner usually paid I believe....
This bunfight is quite interesting really, what will "kill" these properties is when insurance companies simply say "no insurance within 500m (say) of the high tide line".  Owners may well be able to sue councils but they cant sue someone who wont insure them for their own stupidity/ignorance.
Ive been reading some of the cases, and some of the complaints / professional opinions against the council strike me as mindbogglingly biased and dubious.  Not helped by the councils also being on dodgy ground (or is that sea bed) either, ie the reports they commissioned seem wanting.
regards
 
 

Steven,"ie the reports they commissioned seem wanting."
In the case I saw two experts were set against one another. Formula,s were produced and questioned by non-experts.
This should not be necessary if  gov standards based on best current science are distributed to coucils they wont have to fight this high level obfuscating.
This is avoidance at a high level.

Trouble is s much of it isnt black and white and its left to the courts. Even the best science has no real 100% certainty as the possibilities are significant. eg if we act on CC the lower bound rise do nothing 75%, pollute more than projected 110%.  So I think the estimates on sea rises are (say) 290mm to 1000mm. That is a huge variation and if the council takes say the worst case, 1000mm one (which it should) and marks the LIMs for houses on that flood line and  it ends up in court as people have just lost a lot of $s and may even be un-insurable at some stage that is a huge cost for someone. 
On top of that as another report said just how do small councils afford the experts to make a fair risk assessement and determination?  Say  a jack of all trades told by the councillors to do my best in house. So I mark the flood plain based on my best efforts and LIMS get anotated.  Then I am in court justifying what I did and the council ends up with a hefty bill anyway.
Meanwhile yes Government washes its hands of the problem, it wont do standards, tahts costs money and pobably votes. Not just the Nats of course so will Labour.  I mean didnt Labour want to have public insurance? ie the tax payer ends up as an insurer and covers the loss? hardly a competant idea by Labour, but then its the least votes lost path they all seem to take.
regards
 
 
 
 
 

It is likely going to be the case that beach side baches go back to being just that, baches, no mansions worth millions as insurance for 1 in 10 year flooding would go through the roof. Even built off the ground, effects of regular flooding on foundations would mean large properties would need to be engineered to essentially act like a warf, not very economically viable, although I'd imagine the alure of having one of only a few beach front mansions remaining would be enough for the richy riches to want to fork out and do it still.
Accomodation a short walk to a nice beach will never be rendered value-less though. 
The greenies are doing their best to stop fracking, the exact technology that has caused USA to reduce it's carbon emmisions massively over the past 5 years. If China could skip the coal buring phase and go right onto using shale gas for electricity generation that would be a huge step in the right direction.  Obviously the move forward onto complete non-fossil power generation is the longer term aim, but our reliance of dense energy sources mean we need to use the 'best available' in the mean time, and that for now is natural gas, most of which moving forward is most efficiently extracted through fracking.
 
 

Something else interesting to consider (esp if rates are going to be used to pay for sea walls in coastal cities).

N.Z's non-coastal cities by size:

1. Hamilton.
2. Palmerston North.
3. Rotorua.
4. ?? (one outside the top 15 in any case).

Funny, last time I bought a house in AKL and I checked its elevation above sea level my wife was laughing about it. Now I am getting the scientific stamp of approval :-) 
 
At the same time, it is still not really clear to me that climate predictions are reliable. To my knowledge, when you go back a hundred years and take that as the starting point of a climate simulation, then it comes out totally wrong when compared to the actual data measured.
 
Also, there are a lot of factors beyond our control. The Fukushima earth quake was so strong that it shifted the axis of Earth's rotation which can influence the climate, too. After all there have been e.g. ice ages and warm phases long before humans were present.
 
Plus, there are in fact scientists who predict that Earth is sliding back into an ice age and if that was true, we probably should all burn as much as we can, or the kiwi back ends up inland.

I wouldn't read too much into the earthquake changes:

"Earth's rotation changes all the time as a result of not only earthquakes, but also the much larger effects of changes in atmospheric winds and oceanic currents," he said. "Over the course of a year, the length of the day increases and decreases by about a millisecond, or about 550 times larger than the change caused by the Japanese earthquake. The position of Earth's figure axis also changes all the time, by about 1 meter (3.3 feet) over the course of a year, or about six times more than the change that should have been caused by the Japan quake."

Source: http://www.nasa.gov/topics/earth/features/japanquake/earth20110314.html

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