Insurance agencies have a lot more flexibility than banks (or councils) when it comes to adapting to climate change. That's because they can adjust their products on an annual basis to manage risks that increase over time. In contrast, when a bank agrees to a mortgage they're generally in it for the long haul.
The stocktake report (page 71) states: "To reduce some of this exposure, insurance is a requirement for residential mortgages in New Zealand, and failing to maintain insurance can trigger default. However, there is a general absence of compliance checks and lack of understanding of how well properties are insured. These leave a risk that many homes may be underinsured which increases banks' exposure to losses."
The threat of nuclear war was a very real fear for me when I was a teenager in the 1980s, and I can imagine climate change (even though a very different type of risk) could also be a very significant fear for today's teenagers. Seeing that things are being done to prepare for the changes ahead will make a big difference to our mental health.
It won't always be up to councils to be the bearer of bad news to property owners affected by climate change. I learnt last week that a homeowner in an area increasingly affected by coastal hazards has been told that insurance will cover their recent damage from Cyclone Gita, and only one more event in future. Then they will be unable to make further claims.
That means anyone buying that property in future is unlikely to be able to get insurance, and will therefore be unable to gain a mortgage associated with that property.
This is a really difficult one. Irrigation may initially be provided to help communities become more resilient to drought. However, land use in areas supplied by irrigation will almost certainly become more intensive in order to pay for the costs of the irrigation.
The climate change stocktake report (page 18) likens this risk to structural protection works which "may also build a false sense of security and further demands for protection thus locking in exposure to risk over the long term."
While the consideration of a number of different sea level rise scenarios will be important for very long-lived assets, the following more specific guidance (from MfE's December 2017 coastal hazards and climate change document) is also useful.
In the near term (eg by 2050), the projected global mean sea level rise (SLR) range for all ‘representative concentration pathways’ (RCPs) is relatively tight (0.2–0.4 metres). Sea-level rises of up to around 1 metre are ‘very likely’ over a planning timeframe out to the next 100–130 years — it is just a matter of when a specific SLR occurs. (From page 98 of the MfE guidance.)
For more detailed information over longer timeframes, a useful table of anticipated sea level rise under a wide range of different scenarios is provided on page 107 of the MfE guidance.
On reading the finding above, it's tempting to say maybe climate change adaptation should all be managed at a national level rather than tackled by regional and district councils. However, the most recent Ministry for Environment guidance on coastal hazards and climate change (December 2017) stresses the importance of local government involvement in climate change adaptation.
(From page 37): "For climate change, in particular, consultation or engagement involves the translation of international and national knowledge, projections, trends and scenarios to local levels."
"Ensuring there is balanced and responsible community input into the response options for current and future generations will be an important and ongoing role for local government."
Our traditional way of talking about flood and inundation risk (as a 1 in 50 or 1 in 100 year event) is going to get really confusing as climate change alters the frequency and intensity of rainfall events, and sea level rise changes the impacts associated with these events.
Is there another way of setting levels of service for managing flood risk in asset management plans that doesn't refer to 1:50 or 1:100 year events?
The climate change stocktake found that a lot is happening in most sectors in the 'informed' stage of adapting to climate change (understanding the implications), but much less progress has been made on the stages of 'being organised' and 'taking dynamic action'. These are the challenges ahead of us.
The climate change stocktake found that councils are well aware of the climate change issues in their districts and regions, their responsibilities to manage these risks, and the need to prepare their communities for these risks.
However, there are inefficiencies associated with taking action when central government statutory frameworks and national adaption goals and priorities are not aligned, or missing.
These are the posts I have shared on social media, all in one place for easy access.