Parliament’s Finance and Expenditure Committee is being tasked with deciding how New Zealand will cope with the risks and costs of future extreme weather events.
Decades of greenhouse gas emissions have created a warmer atmosphere which is capable of holding more water vapour and releasing heavier rainfalls than when it was cooler.
This means the risk of severe flooding and more serious storms, such Cyclone Gabrielle and the Auckland Anniversary floods last year, has increased.
Local and central government need to decide how to spread the cost of this risk between authorities, individuals, and private institutions.
On Thursday night, all parties in Parliament voted for a select committee inquiry into climate adaptation, intended to develop objectives and principles for an adaptation framework.
Climate Change Minister Simon Watts said this framework would set out how the Government would approach sharing the costs of preparing for the impacts of climate change.
“It will help communities and businesses understand what investment is planned in their area, for example whether the council will build flood protection infrastructure, and what support will be available to help with recovery from events like slips or floods,” he said.
Having a framework in place will mean the Government won’t have to decide what support it will offer on an ad hoc basis after disaster has struck.
It could also send a signal to homeowners and insurers about whether particular locations are suitable to be built on and could result in some vulnerable areas being vacated.
The Finance and Expenditure Committee will pick up on the work that was already underway in the Environment Committee during the previous Parliamentary term
Shifting the inquiry to the Finance Committee reflects the different focus of the new Government and because it includes many of the various parties’ most senior MPs.
A report on adaptation will be due back in early September and legislation to support the new framework could be introduced early next year.
All in
Labour’s climate spokesperson, Megan Woods said it was important the framework could outlast any one government.
“Climate impacts will affect everyone. Climate change and the wild and weird weather it brings know no partisan politics. So it makes sense to support work on adaptation across the House,” she said in a statement.
During the debate in the house, she said climate adaptation was one of the most complex pieces of public policy that the world had to face in the 21st century.
“It is also important that we tackle and address that fundamental question of the funding and the financing and who pays and have that advice as we tackle the work around climate adaptation”.
Green Party co-leader Chlöe Swarbrick said she welcomed the chance to continue working with all different parties in the new committee.
“Just over a year ago our North Island was hammered by deadly and devastating climate-change charged weather events. Many are still grappling with the clean-up, insurance issues and infrastructure gaps.”
“We commend Minister Watts for picking up the mantle from Hon. James Shaw to progress critical climate adaptation work in a cross-party manner,” she said.
The Act Party, New Zealand First, and Te Pāti Māori all supported the inquiry.
In 2022 the then-government released NZ's first national adaptation plan, which it said aimed to "build a climate resilient NZ," bringing the Government’s efforts together in one place, and setting out priorities for six years.
In the plan's foreword James Shaw, who was then Climate Change Minister, said central government wouldn't bear every risk and cost of climate change, including climate change adaptation.
"Risk and cost will fall across different parts of society, including asset or property owners, their insurance companies, their banks, local government and central government. The Government can choose the role it plays and how it influences the way these costs and risks fall. Care will need to be taken to manage any perverse or unintended outcomes such as moral hazard. That is, inappropriate incentives to continue developing in at risk areas," Shaw said.
In February, Suncorp chief executive Jimmy Higgins said the central Government needed to take the lead on climate adaptation work — as the private sector lacked the social license.
“I do think there's an onus on the Government to protect Kiwis and make sure that wherever we're building, it's protecting life risk as well as property risk,” he told Interest.co.nz
RNZ reported in January that 1400 new homes had been consented on Auckland flood plains since the floods last summer that killed four people.
An Auckland councillor told the news outlet it was frustrating but councils were “hamstrung by current planning rules and a lack of direction from central government.”
An expert working group delivered a report on managed retreat in November last year but it hasn’t yet been picked up by the new Government.
44 Comments
"Risk and cost will fall across different parts of society, including asset or property owners, their insurance companies, their banks, local government and central government."
I can see this taking a month of Sundays with none of the parties agreeing at all.
Need to fix the RMA and Building Act and probably the Property Act first and that'll go a long way in preventing or mitigating building on flood plains in the future.
Making sure Insurance companies are capable of paying out on the risks they are covering would be a good step. profiteering is too rife. Insurance companies should be made to working on longer horizons.
Silly question? The latest buyouts by local and central government, were the insurance cos liable for their coverage and government the rest?
Is a part of that that insurance won't provide cover for specific events? if that is the case then some properties are essentially uninsurable, and insurance companies should have to flag that to the applicant. In part owners should have to accept responsibility for building in places that carried a level of risk and they should have been able to be expected to reasonably be aware of that risk. But insurance companies can include exclusion clauses but so not identify them to the applicant, and that can be a problem too.
Does anyone know what this would do to bank's assert portfolio for loans already made. A loan on an uninsurable property will be worth much less than one that is insurable I assume?
The Matatā managed retreat is an interesting case study. After a massive debris flow which took out 2o+ houses, the Whakatane District Council tried not to allow the owners to rebuild. Building and Housing made a determination that scuppered that idea. Despite the danger and evidence of historical debris flows, half the people involved rebuilt using their insurance payouts. IIRC, insurance retreat happened as soon as the options for mitigating the risk were exhausted. Fast forward nearly 20 years, the Council had to remove use rights at the Environment Court (a first) and bought out the owners. Government and Council paid. That's mostly fair because the government allowed the rebuild. It sucked for the people who rebuilt (easy to call them names, but they were very emotionally attached to their homes and community).
What can we learn from this? 1. People underestimate risk. 2. Government can't get out of its own way sometimes. 3. People will fight the government even when it's working to help them. And 4, the historical data were ignored or unknown (or more likely underestimated) when the original consents were issued. 4 is the most pertinent.
We just need to stop building in stupid places. Let the buyer beware.
Agree - I think NZers are some of the worst at honestly looking at risk - "it will never happen to me". She'll be right mate.
Climate Change Minister Simon Watts said this framework would set out how the Government would approach sharing the costs of preparing for the impacts of climate change. How about polluter pays?
Yes , a levy on Carbon credits.
Carbon credits mean the government is already paid every time someone emits CO2 in NZ (unless it's agricultural). The Nats have decided in their wisdom to take this income into the general tax pot rather than ear-marking it for something related, or directly rebating it per capita as is done in (parts of?) Canada.
Forgive my ignorance (really should educate myself with regard to carbon credits) but who pays how much for my 1kg of CO2 output for the 4km round trip drive to pick up a litre of milk? I'm not being facetious - I'm genuinely interested.
You do, it's user pays and part of the fuel tax.
"All fuels also pay an Emissions Trading Scheme levy, which has added between approx. 10-20 cents per litre depending on the price of ETS units"
We need to tax avocados and nut milk to really target those most concerned about the climate crisis. That seems fair?
Didn't think you'd be Seymours mate . You missed sushi and quinoa.
Thanks. If my maths is right, that would be about 5-10¢ per kg.
Surely the risk should be born by the risk takers just like inurers are closely aligning risk to premium, perhaps Earthquake levies should reflect this.
I'm in two minds about this one. In a perfect world those that cause the problem should pay for the problem. In reality, if you are putting yourself in harms way you should be responsible for dealing with that harm when it does occur.
Sadly, pretty much nobody is willing to accept that they are the cause. Everyone wants to blame somebody else - industry, farmers, etc. Some things are just too damned cheap relative to the harm they cause. Petrol/diesel being first on that list. If the government was going to put a levy on anything to subsidise recovery efforts, it should have been those.
The carbon revenues should pay out a percentage direct to politicians, set to be 10x the fossil fuel donations. Then we might finally see some action.
The oil companies who lied that it was happening should pay, sowed doubt in the public for 3 decades. Has led to all sorts of problems social and political. Should also pay compensation to everyone.
Yes and no.
Yes, they lied, and are still spreading propaganda.
But - and it's a bit but - we have known about the problem, as a society, for a very long time. Sure, there are dwindling minority who choose to deny outright, but they are a serious minority. The biggest cohort is those who acknowledge the problem but don't get off the consumption bandwagon. They are both side of our political divide (which is not the full spectrum), and I find them blaming the oil companies, at this late stage, somewhat hypocritical.
The reality is that ex fossil energy, we will be doing orders of magnitude less work. The reality is that we have peaked the flow of fossil energy, so that down-shift is baked-in. The problem is that the adaption to climate alteration, requires? Energy.
Putting out the fire with gasoline, is one thing.
Putting out the fires without gasoline, is the harder - make that impossible - task.
What do you mean by 'we have known as a society". You can't just homogenise everyone into units that sit in a society. Many did not know. Further, I think its far to simplistic to say that most "don't get off the consumption bandwagon". What do you expect individuals to do? Further, most I know are trying to reduce consumption.
Further, there is nothing hypocritical about blaming powerful people for hoodwinking the public.
Yes, the energy debate. There is a lot of wasted energy in the developed world, just walk around outside. We will of course have less energy, but so what? I dont quite understand you argument, are you saying we would have always ended up here so lets just forget about the past and think about how we degrow ect. There will continue to be massive injustices inflicted on the global south and might be a good idea to think about how these injustices might be rectified.
Here's a story on Exxon, one of the oil company liars. https://wattsupwiththat.com/2023/09/18/exxonknew-more-correction/
Ah, the denial central website. If I want to watch comedy "Idiocracy" is funnier and more socially accurate.
I always wondered about making supermarkets responsible for the recycling of the waste they sell.
No coincidence that one of NZ's wealthiest is in packaging. Those profits are largely made at our expense. Isn't it strange that there has never been a major initiative to reduce packaging?
That's because we were warned by so many that the demise of the plastic grocery bag would be the end of civilization as we know it. And look.
It's the demise of the (not) "disposable" nappies that's said to be end of civilisation as we know it. And look...crickets
and the spencer family used to mile everytime you wiped your arse. ka ching.
Major extreme weather events, earthquakes, volcanic eruptions etc are all mainly beyond local government, especially smaller councils.
If land is zoned for development then individuals should only have to bear the cost of their premiums.
Insurance companies may chose to increase premiums or not insure specific areas.
Local governments financial burden for an extreme event should be limited to a maximum $ per capita amount that leaves a local council still financially viable. However local government must also be required to have natural hazard plans in place.
Central government needs to cover the rest.
Insurance companies may chose to increase premiums or not insure specific areas
Yes, they're already doing both.
This morning on RNZ I heard the minister or one of those involved in this investigation say that part of the solution would be to share the climate adaption costs with future generations through loans.
What do people think of this idea?
I do not think that climate change adaption costs should be shifted to future generations by way of loans. The trajectory of climate change is to get far worse. Future generations are going to face their own far larger issues and costs (as a result of previous generations actions, not theirs). It is totally unfair to load them with our costs as well as the climate consequences of our actions.
We need to take responsibilities for our own costs and lack of action. That way we may take the whole issue of climate change a lot more seriously.
Future generations are already in the firing line pay through reduced quality of life and a more rambunctious / less benevolent climate as a direct effect of our current systems fueled by fossil fuels and emissions.
They deserve better than to be saddled up with loans on top of that.
Future generations are already in the firing line to pay through reduced quality of life and a more rambunctious / less benevolent climate as a direct effect of our current systems fueled by fossil fuels and emissions.
They deserve better than to be saddled up with loans on top of that.
What do people think of this idea?
Sounds consistent with pretty much every government and sitting MP's approach which is can kicking. Anything but tell the truth about what their climate change policies will mean for the average person in terms of lifestyle changes as they'll be told where to stick them at the next election.
We all caused it, so we all pay for it.
The ExxonMobil CEO salary was $36M last year. I think some people are a little more to blame than others and also have the capacity to pay much more.
This guy essentially gets paid to kill the planet and make future generations less well off.
He's not forcing anyone to buy fuel.
He is lining his pockets while underwriting a global campaign to ensure humans remain addicted to his products, though isn't he?
No 'we all' caused it is simply lazy argument without defining who 'we' is. Some have caused it, some have lied to make money off buring oil and some also tried to convince the public it was made up by scientists for them to make money. It's simply impossible to calculate how much damage those fossil fuel companies have done with their decades-long campaign sowing doubt in the public. They succeeded as well. However, lets just imagine they decided to take it seriously 3 decades ago and inform the public rather than say BP ignoring there early reports in the 1970s and told everyone that FF altered the atmosphere. Its a guess but I would think that the whole 'climate emergency' would not exist as it does today.
So, if we go back to the beginning which was the best time to start thinking and acting about how to get off their product they began a propaganda campaign, so I say they are overwhelmingly to blame.
Given what may happen what they did is pure evil. They knew it would alter the temperature of Earth and even if it brought about only positive changes and informed public had the right to decide if this was acceptable. That is if we believe that the atmosphere is a commons.
Nothing wrong with squarely pointing the blame at those who had the power to act. Further, most of the population cannot be said to have caused it given many simply denied it given their exposure to the fossil fuel propaganda and many tried very hard to raise this issue only to be attacked by the same companies. Go and have a look what happened to Bill McKibben. Was followed around by oil companies.
Ultimately we need to discourage endeavours that are vulnerable to climate change or exacerbate its effects. Bailing out things that produce less income than it costs to fix is just going to make the problem worse.
Pine trees are a good example. They seem to turn up in a number of "climate" disasters, put a levy on them to pay for the damage. How much carbon was sequestered when plantation burns down when it takes housing with it.
Taxpayers cannot and should not assume this financial burden, it must be handled through private insurance. As it is our demographic structure means we will have fewer taxpayers to fund services like healthcare and infrastructure. To lead is that choose, we must choose to protect core services and not bail out asset holders.
Agreed value cover....keep it simple ...live next to a river or on the side of a cliff makes no difference ... choose and pay for the amount of cover you require to buy somewhere else if it all turns to custard... force insurers to cover all properties based on land area and new build cost NZ average .
I haven’t seen any compelling evidence that extreme weather events are becoming more frequent. There’s also no compelling evidence that CO2 increases have had any significant impact on the climate.
We always should have done a carbon tax instead of emissions trading.
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