27 Apr 2022

Councils, property owners must share costs of climate, Shaw warns

5:58 pm on 27 April 2022

Councils and property owners must shoulder some of the costs of climate change, Climate Change Minister James Shaw warns, with a lack of action the most expensive option.

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Photo: RNZ / Samuel Rillstone

The National Party has welcomed the government's moves to seek consultation, saying it's "better late than never".

Shaw put out the government's draft six-year plan for adapting to climate change this morning, seeking feedback from the public on dozens of proposals aiming to curb the effects of climate change on communities.

While the government did not have a preferred position on where the balance would lie in terms of cost, he was clear that central government alone would not bear all the costs and risks.

That was one of the things the consultation was intending to seek feedback on, he said.

"We need to appropriately share that between central govt and local government and the property owner or the asset owner and their bank and their insurance company ... currently we don't have a clear view of that in Aotearoa," he said.

There was likely no single solution or model to solve the problem, he said, but there would be a cost - and doing nothing would have the worst outcomes for all, "because then we are just playing catch up and only responding to these disasters as they occur".

"If we do nothing and we are just dealing with the effects of climate change via emergency response, then that is going to equate to an increase in taxes because that money has got to come from somewhere," he said.

National's Climate Spokesperson Scott Simpson said it was a conversation New Zealand needed to be having, and it was better having it late than not at all.

"I hope that as a result of this discussion document we will end up ultimately having some answers and a framework, because we're going to need that framework no matter which government is in office, so we welcome this initiative."

"What surprises me is that for a government that professes to be so focused on climate action that they have been so late to the adaptation conversation ... that's an issue that's been confronting New Zealanders living in coastal communities, on riverbanks and clifftops for a long period of time and I'm just surprised it's taken them so long to get to it."

MP for Coromandel Scott Simpson in Thames after flooding in the area.

Photo: RNZ / Cole Eastham-Farrelly

He said there were only three real options for mitigating the effects of sea level rise: defences like rock walls, adaptations like lifting houses on stilts, and retreat - moving further inland.

"That's expensive, undesirable for many people, but will potentially be a stark reality for some."

Buller mayor Jamie Cleine said the region was already seeing the effects of climate change, and the approach to mitigating those needed to be multi-pronged.

"We've seen multiple serious floods now, tidal surge inundations, and two ex-tropical cyclone wind events all within the last, say, 10 years, so it's quite clear that the climate is changing and the intensity of the events is getting greater.

"There's no way that districts such as us will be able to foot the bill per se other than protecting and providing for our own infrastructure where we can, but we clearly have a key role in terms of negotiating what that kind of funding and support mechanisms look like."

Buller District mayor Jamie Cleine announces a partial evacuation of Westport has been ordered by the civil defence controller.

Buller District mayor Jamie Cleine Photo: RNZ

"Local government plays a role but central government will have to as well, as will the insurance industry."

Simpson said in reality the costs would be borne by a mix between property owners, ratepayers and taxpayers, but it should be equitable and would differ depending on the region.

"Coromandel, we have one of the longest coastlines in the country and the simple reality is that most of the most desirable and expensive private property around the Coromandel is closest to the high tide mark.

"Is it fair and reasonable for taxpayers or ratepayers to support the defence of a multimillion dollar property on the Coromandel when maybe that ratepayer or taxpayer is a pensioner living in a two-bedroom unit?"

Shaw said managed retreat was the last resort, he said, but "you need a process for decision making, both as an individual, property owner, but also and more importantly as a community about which of those options makes the most sense for you".

Those conflicts would be laid out the government's final adaptation plan due out in August, he said, but in the meantime councils could also end up in court if they granted consents in risky locations.

"That information is publicly available and has been given to them specifically as local authorities that if they make that decision, and then that property floods or there's cliff erosion or anything like that ... they could be liable because they signed it off."

Insurance Council chief executive Tim Grafton said it was disappointing to see the plan would see legislation introduced to Parliament at the end of next year, as adaptation needed to be given more prominence and urgency.

Homeowners who were risking sea level rise would likely be facing more socioeconomic impacts than an inability to get insurance, he said.

"There is a rational point where you would hope that somebody would take the view that they ought to move if the local or central government is facilitating that for them - for insurers there is no absolute defined trigger point that those insurance is withdrawn."

Insurance: What do you disclose to your provider? Tim Grafton on Morning Report

Insurance Council chief executive Tim Grafton Photo: RNZ / YouTube

Insurers would be "highly supportive" of managed retreat processes where appropriate, he said.

"What we want to do is to continue to support people with insurance and by removing them from harm's way that helps to do that and also helps our customers to live in a safe way that puts them personally out of harm's way, not just the house that they're living in."

He said such retreats had already happened in other parts of the world, including Australia.

However, Cleine said there were limited options in Buller for people to retreat from rising sea levels.

"You're talking about very narrow strips of land and then you know straight into what is vertical mountains and hills ... then there's affordability, you know, parts of Buller district are at the lower end of the socioeconomic scale."

The effects and costs for property owners would need to be gradual, he said.

"Their most significant financial commitment is often in their home so they're delicate conversations and they're conversations that need to be had quite early with communities."

Grafton said Westport - which is in Buller and was mentioned in the report - was at very high risk, but was still able to get insurance and that was not likely to change in the next few years.

He said there were no places in New Zealand where homeowners were unable to get insurance, but insurers would price risk differently - some for individual properties and others regionally.

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