Risk frameworks need 'fundamental rethink' on climate

Risk frameworks need 'fundamental rethink' to cope with climate change

New Zealand’s risk and resilience frameworks need a “fundamental rethink” if communities are going to adapt to the greater potential risks arising from climate change, Local Government New Zealand says.

The country is a collection of seaside communities and they have to be better prepared for the potential risks from rising sea levels, erosion and flooding that is expected as global temperatures increase, LGNZ chief executive Malcolm Alexander says.

While the country has tended to be good at recovering after big events like storms, there needs to be much more focus on investing to create long-term resilience, he says.

That could include “defending” some assets against more frequent weather events or even “retreating” from coastal areas exposed to inundation or erosion - yet who pays for that is not clear.

“It’s good we’re talking about adaptation. It’s about time we did a lot more of that because ‘stuff’ is coming whatever else happens,” Alexander told delegates at the Climate Change and Business Conference in Auckland this week.

“Stuff is going to come whatever we do and we need to accept that reality.”

Alexander was speaking as part of a session on the risks and challenges councils face when responding to climate risk.

Delegates heard that risk to coastal communities is not new. More than a decade ago, councils were trying to limit development in some areas north of Auckland, and facing opposition from residents for doing so.

In 2015, Christchurch City Council faced pushback from South Brighton residents after it moved to include flooding risks on land information memoranda. It identified potentially 18,000 properties at risk of coastal inundation.

Councillor Raf Manji, a former investment banker, told delegates that it was a strange process to be involved in.

Everybody understood that living by the sea came with risk, but no-one wanted to know about it. The council then spent two years reworking the way it described the risk, and Manji was left wondering why “the risk that was clearly there, could not be called the risk that was clearly there.”

LGNZ is trying to seek a legal safe harbour for councils, given they have an obligation to get that sort of risk information out there as soon as they have sufficient confidence in the data.

Manji said councils generally do a good job in this area and he thinks the risk of legal action for not acting is low.

But he said councils do have to manage the risks they are aware of and they do have to keep on top of those as “all models are changing all the time.”

Speakers noted that there is a risk – in the absence of national policy direction from central government – that councils could end up adopting a multitude of different approaches.

The government is undertaking a national climate change risk assessment, to establish a national inventory of assets potentially at risk from climate change during the next 100 years. The first stage of the work is to be concluded mid-2020.

Maria Ioannou, corporate policy manager at Dunedin City Council, said the data collection process risks becoming another “holding pattern.”

She is also concerned that councils may be thinking about sea level rise, and building “nice little kingdoms” here and there, without paying attention to the way climate change could affect all their other assets.

Alexander said risk-based insurance pricing is already a reality for councils, yet Crown funding arrangements for the replacement of public assets damaged by natural events encourage like-for-like replacement instead of building in more resilience over time.

Councils need to be able to gather information on the changing potential risks their communities and assets face, and demonstrate to insurers they are managing those risks.

They also need to get that information out to their communities as soon as possible so that people can make informed decisions about the risks they take on when choosing where to live or where to build.

The “incumbency tail” of people who are making property decisions without that information gets longer every day.

Alexander said people aren’t stupid, but there is a risk that, having been caught out by erosion or rising sea levels, they then try and get their council to pick up the tab and socialise that cost across the community.

“We’ve got enough information here to start making decisions from an investment and incentive point of view.

“People have got to start owning and managing risk and not looking for someone to pass the buck to,” he said.

“We must avoid moral hazard or this is going to get really expensive.”

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