Having forked out $240m for damage caused by extreme weather events in the last year, insurers call for the establishment of a central agency to oversee a plan to adapt to the impacts of climate change; LGNZ on a similar page

General insurers want the Parliamentary Commissioner for the Environment (PCE) to look at ways of adapting to the impacts of climate change, rather than largely focusing on reducing greenhouse gas emissions.

With insurers forking out $240 million to settle 25,000 claims made in response to extreme weather events in the last year, Insurance Council of New Zealand CEO Tim Grafton, says: “No matter how successful New Zealand is in achieving greenhouse gas reduction targets, we will still have to deal with the increasing frequency and severity of extreme weather events.

“Greenhouse gas emissions are cumulative, which means rising temperatures, increased flood risk in some parts of the country and increased risk of drought in others will continue. Unless we adapt, there will be significant economic, social and environmental costs.”

The PCE’s report 

Grafton’s comments follow the new PCE, Simon Upton, releasing a follow-up to a report his predecessor, Jan Wright, published in July.

In ‘A Zero Carbon Act for New Zealand: Revisiting Stepping stones to Paris and beyond’, Upton provides advice on how the Government should go about setting up an independent Climate Commission, as it enacts a Zero Carbon Act.

Like Wright, he says it should follow a UK-style model, tailored for New Zealand.

He says: “A Zero Carbon Act, based on the UK Climate Change Act, should be designed to put in place a process for meeting carbon budgets and targets. Such a process should require the Government to spell out the policy measures and settings it will adopt to meet those budgets.”

He believes the Climate Commission should play an advisory role in proposing carbon budgets.

He also maintains it should consider setting separate targets for different greenhouse gases. Upton notes gases from agriculture – methane and nitrous oxide – make up about half of New Zealand’s emissions profile. He says: “This cannot continue”.

Coming to the adaption part of the picture, Upton wants a process for carrying out regular national-level risk assessments and national adaptation planning to be included in the Zero Carbon Act. However, he hasn’t firmed a view on whether the Climate Commission should have a role in this.

He doesn’t go into detail on adaptation, but says: “Developing a strategy could go some way to ensuring that good science is available for decision-makers, that effort is being focussed on priority issues, and that information is shared so that councils are not engaged in reinventing the wheel.”

Insurers want central government to take leadership on adaptation 

Grafton says: “If there were to be a 30cm sea level rise between now and 2065 – a relatively conservative possibility – what are today considered extreme, 1-in-100-year high water levels will occur annually in both Wellington and Christchurch. There are 32,000 homes within 1.5m of the current mean high tide level…

“New Zealand needs its central government to take ownership of identifying and reducing risks to people, property and the environment, and providing clear guidance to local government as that is where many decisions are made.

“This requires dedicated resources, coordination across Ministries and bipartisan political commitment towards achieving over the long term.

“These matters need to be at the heart of the package of reforms the Government is considering alongside climate change mitigation.

“As the Commissioner notes, New Zealand is one of the few OECD countries to not have a national adaptation strategy and that should be provided for in legislation.

“Monitoring how well New Zealand is reducing its climate change risks should be done independently and transparently. Responsibility for coordinating planning should rest with a central agency that has an overview of nationally significant risks.”

Local government sector on similar page to insurance sector 

Local Government New Zealand says adapting to climate change is the biggest issue it faces. 

Its president, Dave Cull, maintains there is an “urgent need” for local and central government to be in alignment on adaptation.

“Local government is ready to do more but needs direction from the national level on a clearer decision-making environment and agreement on the financial responsibilities and funding for adaptation,” he says.

“We also think the Government needs to lead a national education and engagement programme to ensure communities are aware of the full extent of climate change impacts.”

Cull says the local government sector needs to be involved in any conversations and decisions about the place of adaptation in the Zero Carbon Act. He also says it has a role in determining what agency or mechanism is adopted to carry out that work.