Between a rock (and the floodwaters) and a hard place

22 Feb

New Zealand Climate Crisis: No 11

NEW ZEALANDERS FACING IMPACTS FROM SEVERE WEATHER EVENTS MADE WORSE BY CLIMATE CHANGE, DESERVE TO KNOW, NOW, WHO WILL - OR WONT - PAY FOR THE DAMAGE THAT IS CAUSED

[Article 3600 words - a fifteen minute read, (Summary 1100 words - a five minute read)]

SUMMARY:

As the current and recent storms and Cyclone Gabrielle have shown, climate change, in the form of increased intensity and frequency of extreme weather events (and their impacts) is already alive in well and living in New Zealand.

Unfortunately for the many New Zealanders with a financial interest in the housing market or an interest in their communities having a climate-resilient infrastructure to service their neighbourhoods , New Zealand has an ad hoc approach to managing severe weather events. The focus, over recent years, has been (and regrettably still is), on recovery, but without adequately addressing either risk reduction or resilience[1] that are the key to sustainable solutions.

The situation we now find ourselves in - looking at a future where communities will have to deal with more frequent and increasingly severe extreme weather events - is one we are woefully under-prepared for.

In what will, figuratively speaking, be a tsunami of such events in coming years, decades and longer, (all thanks to the climate change process we humans have birthed and nurtured) it is people, businesses and communities who will bear - or in some cases are already bearing - the financial and other costs owing to an disinterested government whose fiscal risk appetite appears to be confined to whether actions contribute (or not) to the national balance-sheet in the near term.

However some work is underway, such as with the recently published National Adaptation Framework [NAF] published last year, that will hopefully increase our level of resilience. This initiative, unfortunately, does not include any dedicated funding, nor does it reinstate many of the delivery tools discontinued from the first and comprehensive National Adaptation Plan that was published in 2020.

More importantly, owing to the very large costs involved that are already being incurred by local authorities, home owners, renters and communities, in managing the impacts of extreme weather events, an increasing number of New Zealanders do not have the luxury of waiting for the implementation of the outcomes that the NAF process will disgorge over coming years.

This, immediate, need for action is the consequence of three developments that are converging in space and time:

1. While local authorities have a critical role to play in ensuring that the adaptation measures developed will deliver sustainable outcomes for their communities, it remains unclear if (and how) these essential processes are to be resourced and funded given that local government is being directed, by central government, to prepare to operate under a proposed rates cap.

2. The New Zealand insurance industry is, unsurprisingly, increasingly focused on understanding their risk exposure to the more frequent and more severe weather events (super-charged by climate change), that will affect communities in future. From a commercial perspective, a last resort option is for companies to withdraw from the market in areas where they believe their risk exposure would be unacceptable and the first shoots of this process (albeit temporarily and in a limited way) are now being seen in New Zealand.

The key consideration here is to understand that the rate with which any insurance withdrawal process will occur will not be determined by a time-frame that is decided by politicians or policy makers or is wished for by homeowners. It will be driven purely by risk exposure and other commercial considerations that will, in turn, be decided by the (currently) accelerating rate of adverse impacts that climate change is visiting upon our communities

3. The Government is considering ending bailouts for homeowners affected by floods and landslides as it develops a framework for addressing the impact of climate change. It has announced that it won’t be able to keep bailing people out and a twenty-year transition period is proposed, leading to a future state where people know their risks and make their decisions on the management of these accordingly.

The Governments approach has been articulated by the Climate Change Minister as being about making sure people have the right information to make the right decisions. A critical omission, (particularly in the light of the Government’s decision to defer the cost share conversation to the next Parliamentary term), is that the above quote omits “At the right time” [As in “Our approach … right decisions. At the right time This will allow ….”.]

For the many New Zealanders who are already jammed between a rock (the Government announcing it will not be able to “:keep bailing people out”), the floodwaters (the rapidly rising cost or even withdrawal of insurance) and a hard place (the demonstrable unaffordability of having local authority paying for either the damage caused or the necessary preventative work) “the right information to make the right decisions” is needed NOW.

What needs to happen before the election this November?

There is nothing to be gained (apart from politicians being able to avoid answering hard questions) and a lot of wealth to potentially be lost (by impacted home and business owners, renters and infrastructure owners) by the continued avoidance of the issue and the time, election year, is ripe for this conversation.

While it is unrealistic to expect detailed information around cost shares to be available before the election it is morally wrong for the Government to yet again kick a climate related issue down the road and financially abandon people to their fate as collateral damage, when this situation has primarily resulted from their (Government) inaction.

What is realistic is an expectation that, before the election, all political parties are able to articulate their positions about

1. What costs, resulting from damages to home and business owners and renters arising from extreme weather events exacerbated by climate change (e.g. such as flooding but excluding seismic events), they will or won’t cover in the timeframe until a more enduring cost-share arrangement is agreed and implemented?

2. What difference will any future insurance withdrawal from an area or areas make to their position on this issue?

All New Zealanders who are, have been, or will be, impacted by climate change-driven severe weather events in the upcoming couple of decades need to take some responsibility and raise the issue with current and aspiring politicians to find out if and how they will or won’t support them in managing this threat.

BACKGROUND:

The severe storms that wreaked havoc over many parts of the country a few weeks ago (and applying equally well to the current events) were and are a tragedy on many levels; for families, business owners, renters and communities who witnessed the damage and destruction inflicted on their homes, businesses and public infrastructure such as roads and bridges.

Most importantly of course is the human cost of the catastrophe for the families and friends of the people who lost their lives, the circumstances made worse by the difficulty in reuniting many of the Tauranga victims with their loved ones.

While any loss of life from a natural disaster is a tragedy, the scale of the event is significant, and the worst since Cyclone Gabrielle three years ago..

The immediate focus, especially in the affected communities must be on starting the arduous, lengthy and very expensive work known simply, - but hugely understating the matter - as “recovery”. Also high on the priority list of things to do in Tauranga especially will be an inquiry to understand what happened. On any occasion involving significant loss of life, it is important to determine if there are any actions to be taken to ensure that the tragedy isn’t repeated in future.

Outside the scope of this necessary work however, and even more challenging to address, is an issue that will be increasingly difficult to avoid acknowledging; the role of climate change and its impacts on New Zealand including exacerbating the damage caused by storms and other extreme weather events.

CLIMATE CHANGE AND EXTREME WEATHER EVENTS:

It is naive – and quite simply wrong - to assert that there have always been extreme weather events in New Zealand and the event that we have just experienced is no different. Yes, severe weather events have been and will be part of life in New Zealand (and other countries) but climate change – and the increased temperature that is its defining signature, has increased and will continue to increase both the severity and frequency of this type of event.

Every 1C global temperature increase that we experience (we are now sitting at ~1.1C higher than a century ago and likely to reach ~3C by the end of the century unless we urgently reduce emissions at a rate faster than we have managed to date) will increase the rainfall during severe weather events by 10 – 20%. In addition, as has been recently stated, “Children that have been born in 2020 and since will face over four times the number of extreme events in their lifetimes than any of us who were 55 in 2020 will ever experience in our remaining lives.”[2]

We have known about the issue of human caused climate change, and what to do about it for some decades now but have not acted on this knowledge with sufficient urgency. As a result, we are now seeing, and will increasingly experience, over the coming decades and longer, more severe and more frequent extreme weather and other events that are the signature of climate change in action.

There has been an admirable effort, on the part of a number of concerned New Zealanders to raise awareness of climate change and what to do about it; reduce emissions and become better prepared to deal with the impacts, (the subject of this article).

It is fair to say however that, of late and despite the increasingly strident calls from a wide range of national and international experts, about the need to urgently take stronger action, it seems to me that the attitude of many New Zealanders to the climate change problem is to close their eyes, put their fingers in their ears and pretend it doesn’t exist. This refusal to face the issue may have been of little perceived consequence historically, but when climate change has reached the point where its impacts on our communities are direct and are adding to the misery inflicted by severe weather events, it is time to drop the pretence and face the facts.

New Zealand governments, of both political hues, have been enablers of the problem over the past five years, owing to their failure to step up and have an honest conversation with voters on the issue of climate change. The current, coalition, government is currently a major contributor to the sad state of affairs. I recall reading a comment that stated the problem more succinctly than I could; that the government continues to pretend that it can meet the relatively ambitious emission reduction targets of the previous government while dismantling the mechanisms that made this goal possible. That any New Zealanders are able to pretend the problem doesn’t exist is facilitated by the Government and most other political parties, which, by avoiding leading the needed public conversations, are complicit in this fallacy.

It is true that addressing climate change is difficult as there are a number of complicating factors, the most relevant being that it can, albeit falsely, be seen as a future problem at a time when New Zealand is hopefully emerging from an economic recession. Other problems include the (to date) slow-acting nature of the problem and that it will play out over decades and longer. [Such factors also mean that the government is the actor that has control over most of the large economic and policy levers that can be used to address climate change, though that does not mean that individual and community action, at a range of levels is not also vital, as these can also drive political/legislative change as well as have direct beneficial outcomes for the environment.]

Having a focus on issues related to the cost of living is understandable, from the perspective of the many New Zealanders affected most by it, at least. When all your time is taken up by working and/or working out how to feed and house your family as well as pay the other bills, many people have no spare capacity to deal with the problem of climate change however important it might be.

This is not the situation that a large number of New Zealanders are in however and the latter group of people certainly have the capacity to engage with climate change and the issues we face as a consequence. This category includes all our Members of Parliament who, as well as being relatively well-off financially, also have a fundamental duty to all New Zealanders; to raise the awareness about, and to drive the management of, emerging critical risks to our communities - such as that posed by climate change..

ADAPTATION IS AN ESSENTIAL TOOL TO ADDRESS CLIMATE CHANGE IMPACTS - WHAT DOES NEW ZEALAND HAVE IN PLACE?

While the root cause of the climate crisis is the increased levels of greenhouse gases [GHG] that we have been putting, and still put, into the atmosphere (and concerning which, the restoration of a pre-climate change environment requires that we urgently reduce these) the other readily available tool we have, and the subject of this article, is adaptation. This means that we must adjust – adapt - our built environment (e.g. housing and roading and other infrastructure) to function in the light of the impacts that we know are coming our way as a result of the already elevated GHG levels.

These impacts will be substantial and will affect us and our descendants over coming decades and longer and include sea level rise, increased frequency and severity of extreme weather events including storms, flooding and droughts. It is important to realise that climate change is not the cause of all adverse weather events, but its impacts have been unequivocally shown to exacerbate the severity of severe weather events such as Cyclone Gabrielle in 2023. [More information about how climate change makes storms more intense can be found here.]

New Zealand has a National Adaptation Plan [Publication ME 1660, (NAP)]. First published in August 2022, it was a comprehensive document intended to help communities adapt in practical ways to the effects of climate change. Its value was that it included tools for central and local government to move beyond ad hoc responses to extreme weather events by, for example, providing guidance about incorporating climate risk into central government decision making, and a framework that would enable local authorities to identify areas that would need to be protected/redesigned or retreated from as climate change impacts increase over time.

The NAP itself was a response to the risks identified in the Framework for the National Climate Change Risk Assessment for Aotearoa New Zealand [ME 1434] published in September 2019 and which subsequently led to the publication of the National climate change risk assessment for New Zealand [ME 1506] in August 2020. [It is worth noting that the Climate Change Commission is currently conducting a mandated, 6 yearly, review of this assessment and last year called for experts to support the 2026 National Climate Change Risk Assessment

More recently, in 2024, Parliament’s Finance and Expenditure Committee conducted an inquiry to develop and recommend objectives and principles for the design of the adaptation framework, work that the Government formally responded to in 2025

In 2025 the government, in January, published and an addendum to the 2022 National Adaptation Plan - New Zealand's first national adaptation plan Table of actions Addendum 2025 [Publication ME 1873] - which, regrettably, documented the extent to which they have stopped much of the intended work on the valuable initiatives proposed in 2022.

In essence, while we still have a national direction on natural hazards, we no longer have many of the tools or standards that are needed by the central and local government authorities and communities (facing climate change impacts) to make the plan, for a resilient future, a reality.

The government however, asserts that it has not abandoned climate adaptation and, in October 2025,published the National Adaptation Framework designed to inform people about the natural hazard risks they face and the plan to address them. Work underway or being planned for in this area includes the preparation of New Zealand’s first National Flood Map and amending the Climate Change Response Act 2002 to clarify requirements for local government that will require adaptation plans in priority areas.

As has been pointed out however[3] the latest government initiative does not include any dedicated funding, nor does it reinstate many of the delivery tools discontinued from the first (2022) National Adaptation Plan. In addition, in the 2024 budget ended the ring-fencing of Emissions Trading Scheme revenue for the Climate Emergency Response Fund. The Government also dismantled a $6b national resilience fund created after Cyclone Gabrielle, arguing resilience spending should instead be assessed through standard Budget processes.

This position was taken despite the Treasury, in 2024,describing extreme weather as a repeat and growing fiscal risk for the Crown and one which, (absent the accumulation of designated funds, such as the now dismantled national resilience fund), the budget process, with its primarily one year, forward-looking focus, is not designed to manage the (by definition) large unplanned for and unforeseen expenses that accompany what are, at the moment unpredictable, climate-charged severe weather events.

WHERE DOES THIS LEAVE NEW ZEALANDERS?

As has been noted above, the current mechanisms for manging adaptation focused responses to severe weather events face a number of challenges. In practice, and not surprising considering the sums of money involved (the total damage from Cyclone Gabrielle and the Auckland Floods in 2023 is likely to be at least $9 billion), many of the challenges are financial, whether to individuals, businesses or communities.

In the context of the costs of climate change-exacerbated severe weather events that New Zealand will have to deal with, from now on, three issues stand out which demand that financially viable and socially equitable solutions be developed as a matter of urgency.

1. The critical importance of local government and their effective engagement with their communities on adaptation

Local authorities are the bodies that have traditionally been charged with ensuring both that the locations and types of various structures is appropriate given the natural hazards that exist in the area and with providing infrastructure, including “3-Waters”, to their communities.

While these roles have undergone some changes - the former having to have regard for various national resource management related legislation and the latter having been functionally outsourced under the “Local Water Done Well” banner recently - local government remains the vital link between the theory and the practice when it comes to effective community adaptation measures in response to climate change.

For areas that are, or will be in future, under threat from climate change (such as sea level rise), options include[4]:

avoiding risk – for example, by locating development away from areas prone to hazard (e.g. such as floodplains)
protecting assets from risk – for example, by building protective structures such as sea walls
accommodating risk – for example, by incorporating adaptation options (e.g. living areas not built on the ground floor) into the design of developments
retreating from risk – for example, by relocating existing development away from high-risk areas

All of the above options have their strengths and weaknesses (e.g. flood defences such as sea walls can be over-topped over time) and all, with the possible exception of risk avoidance, involve potentially considerable cost and disruption.

All adaptation options require extensive consultation, by local authorities, with their communities, but it remains unclear whether (and how) these essential processes are to be resourced and funded given that local government is being directed, by central government, to operate under a rates cap[5]. That will take full effect in 2029.

2. The increasing use of risk-based pricing and other measures by insurance firms

Insurance companies and other businesses involved in lending on property and other assets, the value of which might be adversely affected by climate change impacts have a vested interest in how well New Zealand does (or doesn’t) “do” adaptation.

Insurance companies in New Zealand, together with their overseas re-insurers, have a vested interest in ensuring their shareholders funds are not spent in uneconomic endeavours so they are keenly focused on managing their exposure to climate related risks including flooding and landslides arising from extreme weather events and the tools that they have at their disposal for this are becoming increasingly sophisticated.

That climate change is an exacerbator of these damaging events rather than the driver, is irrelevant as the economic costs are agnostic about the cause/s and the focus is solely on the risk exposure and the costs involved in remedying the resultant (e.g. flood) damage. In addition, where insurance companies go, lending institutions closely follow if they see the value of the collateral that they lend on is at risk.

The recent announcement by one major insurance company - that it has temporarily stopped offering new home insurance policies in Westport because of the town's flood risk - means that the problem of house insurance (and the compounding issues that flow from this) is now much more than an academic exercise for some New Zealand homeowners.

While it appears that affected homeowners have in most cases been able to obtain insurance elsewhere, more and more New Zealanders will be affected by this issue in the future, so it is in our interest to closely monitor developments in the adaptation space - and to take action to make sure it is addressed in a timely fashion.

The key consideration here is to understand the sole driver of the insurance withdrawal process. The rate which any insurance withdrawal process will occur will not be determined by a time-frame that is decided by politicians or policy makers or is wished for by homeowners. It will be driven purely by risk exposure and other economic considerations that will, in turn, be decided by the (currently) accelerating rate of adverse impacts that climate change is visiting upon our communities

A final note about insurance withdrawal. The focus of the insurance and other sectors in this matter is, unsurprisingly, on their exposure to the hazards that they have a commercial interest in and whether or not the assessed risk/s is/are mitigated. That an effective mitigation measure in their eyes (such as a flood wall) might not be effective in the long-term for a community (and managed retreat be subsequently required for example) is outside the scope of the immediate business decisions they will make.

3. The Government is considering ending bailouts for homeowners affected by floods and landslides as it develops a framework for addressing the impact of climate change

The role of central government in this process and what they choose to do and not do and when is decisive. This group pf people set the rules of the game, decide where it will be played, who will take the field and most importantly, what the prize money (costs) will be and where they will lie.

While the government has often stepped in after natural disasters to buy properties, the cost has been huge, with billions of dollars spent in recent years as climate change exacerbated severe weather events have increased in intensity and frequency

As a consequence, the government "won't be able to keep bailing out people in this way," New Zealand Prime Minister Christopher Luxon told state-owned Radio New Zealand in July 2025.

Instead, as articulated in A proposed approach for New Zealand's adaptation framework The Independent Reference Group on Climate Adaptation [MfE, July 2025, CR 617], a transition, over twenty years, is proposed that will result in people knowing their adaptation related risks and making their management of the issue accordingly.

This position was reiterated by the Climate Change Minister following the floods in January this year, when he said[6], referencing the National Adaptation Framework “… adaptation involves "a significant fiscal cost" that will need to be shared across society over time” and “ Our approach is about making sure people have the right information to make the right decisions. This will allow people and businesses to plan ahead and make decisions that lower risk and boost resilience."

In my view, a critical omission, (particularly in the light of the Government’s decision to defer the cost share conversation to the next Parliamentary term), is that the above quote omits “At the right time” [As in “Our approach … right decisions. At the right time This will allow ….”.]

WHAT NEEDS TO BE DONE BEFORE THE ELECTION THIS NOVEMBER?

There is nothing to be gained (apart from politicians being able to avoid answering hard questions) and, possibly, a lot of wealth to be lost (by impacted home and business owners, renters and infrastructure owners) by the continued avoidance of the issue and the time, election year, is ripe for this conversation.

In this context, the vital first step towards resolution is a conversation between political parties and voters (and their communities) about the issues, the frameworks and processes that are or will be used to address them and most importantly, how the very large costs involved will be shared:

While it is unrealistic to expect detailed information around cost shares to be available before the election it is morally wrong for the Government to yet again kick a climate related issue down the road and potentially financially abandon people to their fate as collateral damage, when this situation has primarily resulted from their (Government) inaction.

What is realistic is an expectation that, before the election, all political parties are able to articulate their positions about

1. What costs, resulting from damages to home and business owners and renters arising from extreme weather events exacerbated by climate change (e.g. such as flooding but excluding seismic events), they will or won’t cover in the time-frame until a more enduring cost-share arrangement is agreed and implemented.

2. What difference will any future insurance withdrawal from an area or areas make to their position on this issue

Unfortunately - but not surprisingly - a cursory Google search for adaptation focused climate change policy statements (and where the costs will lie around this) by the main New Zealand parties did not find a lot of information with (again unsurprisingly) the Green Party the exception about the former component at least. Hopefully this lack of information will change as we approach the election in November.

As it stands however, all New Zealanders who have been or will be impacted by climate change-driven severe weather events in the upcoming couple of decades need to take some responsibility and raise the issue with current and aspiring politicians to find out if and how they will or won’t support you in managing this threat.

As the old adage goes “If you don't have a seat at the table, you're probably on the menu” (as roadkill).

FOOTNOTES:

[1] IAG News Release 16 May 2025, “New Zealand’s $64b spend on natural hazards heavily skewed to recovery over resilience”, https://www.iag.co.nz/newsroom/news-releases/iag-sapere-report-nz-natural-hazard-spending

Research commissioned by IAG New Zealand shows that:

§ The Government has spent at least $19 billion on responding to natural hazards since 2010, and a further $14 billion through its public insurance schemes and that

§ Only 3% was spent on risk reduction and resilience.

[2] Professor Bronwyn Hayward quoted in a Kirsty Johnson article “Deadly storms expose growing gap between disaster recovery and climate preparation”, 30 January 2026, published on the RadioNZ website https://www.rnz.co.nz/news/political/585400/deadly-storms-expose-growing-gap-between-disaster-recovery-and-climate-preparation

[3] In the Kirsty Johmson article [See Footnote #2 above]

[4] MfE, Chapter 5 “ Adaptation options including managed retreat” 3 August 2022, https://environment.govt.nz/publications/aotearoa-new-zealands-first-national-adaptation-plan/adaptation-options-including-managed-retreat/#:~:text=For%20communities%20in%20areas%20of,current%20impacts%20of%20climate%20change.

In “Adapt and thrive: Building a climate-resilient New Zealand – New Zealand's first national adaptation plan” ME 1660

[5] A recent rep[ort has the Local Government NZ estimating that meeting the additional responsibilities under the new Emergency Management Bill (currently before Parliament), excluding any costs to meet higher standards that may be imposed In addition, it was noted that changes to the resource management system will cost $870m to establish and administer. IN Jonathan Leask, Stuff, “Councils push back on ‘one size fits all’ rates cap”, 10 February 2026, https://www.stuff.co.nz/nz-news/360936255/councils-push-back-one-size-fits-all-rates-cap

[6] Refer Footnote #2

Dave Burt