The Case for New Climate Change Adaption. Funding Instruments.

Abstract

Adapting to climate change during the 21st century and beyond poses unprecedented technical, administrative and political challenges that will test the ability to cope at national and local levels. The impacts of climate change will be progressive (sea level rise) and intense (rainfall), and punctuated by abrupt and extreme events (storms, droughts, floods and landslips). Such changes will be outside the variability ranges that we have responded to in the past or are responding to currently. They will be ongoing for centuries, and occur concurrently in time around New Zealand. The risks will compound within, between and across sectors and domains of interest.

The foreseeable impacts will create high damage costs (Bell, Paulik and Wadwha, 2015; Insurance Council of New Zealand, 2014) and raise difficult inter-temporal and intra-generational trade-offs.2 For instance, in New Zealand insured losses due to extreme weather events were as much as $175 million in 2013 and $135 million in 2014 (Insurance Council of New Zealand, 2017). The Treasury estimates that drought cost New Zealand around $1.5 billion in 2013. Over the last ten years the annual cost of repairing land transport networks damaged by weather-related events has increased from $20 million to $90 million. Moreover, these costs can be expected to escalate significantly over coming decades as a result of climate change. Importantly, in this regard, Local Government New Zealand estimates – based on research by Deloittes Access Economics (Australia)(2013) – that $1 spent on hazard risk reduction will reduce losses and disruption from natural disasters worth between $3 and $11. Other international estimates of the likely savings are consistent with these findings (Healy and Malhotra, 2009).