Ready for some scary numbers? The wild storms of the summer of 2023 – Cyclone Gabrielle and the Auckland Anniversary weekend floods – led to 117,000 insurance claims.
Extreme weather events that year, says the Insurance Council, resulted in $3.97 billion worth of claims. The cost of damage to physical assets, public as well as private, will probably be over $14b.
The Government and councils agreed to a 50:50 split of the costs of buying out Category 3 properties. For the Hastings District Council alone – one of the smaller councils affected by the storm – that meant taking on debt of about $50 million.
And in those summer storms, 15 people died.
The insurance industry, the Government and local councils have made it clear they can’t keep paying for damage like that. Probably, taxpayers and ratepayers would agree.
And yet, as Niwa warns us and we know from our own experience, storms, floods, fires and droughts are becoming more frequent and more damaging.
“Cyclone Gabrielle and the Auckland Anniversary weekend floods in early 2023 are but a foretaste of what the future holds,” says public-policy expert Jonathan Boston. “Sadly, much worse lies ahead.”
He says the long-term costs will reach far into our society, culture, economy and ecology. What should we do about this?
Here’s another set of numbers. There are just over 2 million dwellings in New Zealand, according to the 2023 Census. The Ministry for the Environment reported last year that 227,000 of them are situated in flood zones, but that number excludes Waikato, where data was still being collated.
Assuming Waikato is typical, this means about 260,000 or 13% of our homes are in flood zones. The Climate Change Commission says 750,000 people, 500,000 buildings and billions of dollars of infrastructure are at risk of “extreme flooding” between now and 2060.
Extreme flooding is where there are “significant or repeated losses”.
Many of those people and buildings are in low-lying areas, near rivers, perhaps reclaimed from swamp, because that tends to be where cities are built. In large rainfall events, they usually have little or no infrastructure capable of preventing floods.
In Auckland, where geographer and transport expert Simon Kingham estimates 43% of the urban land is covered in roads and car parks, it would not be possible to build drains big enough to cope with the run-off.
The preferred solution is flood-retention zones – parks and other areas where the water can gather, before soaking into the ground. But we don’t have nearly enough of them.
As for the coast, Boston says a sea-level rise of a metre or more by 2100 “is now increasingly likely”, while at the same time around 40% of our coastline is subsiding by 6-8cm per decade.
Boston is an emeritus professor of public policy in the School of Government at Te Herenga Waka – Victoria University of Wellington. In his 2024 book, A Radically Different World: Preparing for Climate Change (BWB Texts, $17.99), he says we’re in a new reality. The old norms of urban development, insurance and government responsibilities have been swept away and we urgently need to adapt. That is, to change where and how we live.
For this we need an adaptation plan: a framework for deciding how to reduce risk and how to pay for damage when it does happen.
The insurance industry agrees. Most politicians agree. The law requires it. To date, though, attempts to create this framework have failed.
It’s not hard to see why. In straitened times it’s hard to commit to new spending or changing the way we do things, especially if the need doesn’t seem pressing. Even when it does, there’s resistance.
In the West Coast town of Granity, water streaming off the hills has caused slips and floods several times this century, while on the seaward side they face “the worst coastal erosion in the country”.
But locals say, “It’s just weather.”
They say, “We live in paradise,” and they see no need to rethink the future of their town. They definitely do not want it designated a flood zone, because they believe that will affect their insurance.
Not that insurers, or mortgage-holding banks, are waiting for such a designation. Banks have access to Niwa modelling showing how rising sea levels will affect coastal properties. And as many of the victims of Gabrielle discovered, insurers can decide not to renew your policy any time they want to.
In a sense, we all live in Granity. Including our current and previous governments.
In 2020, the Labour-led Government approved a seawall for the state highway that runs through the town, but it was never built. Under National the seawall has been defunded.
Some of the Granity locals have built their own seawalls. Nobody there is talking about managed retreat.
But that’s the conversation we all must have, not just to decide who should move, but to agree on who pays, when and how.
Even before Cyclone Gabrielle struck in 2023, the Ministry for the Environment had set up an Expert Working Group to look at this. Boston was a member.
The group made detailed recommendations on risk assessment, planning, regulations, funding and financing, institutional mechanisms and iwi relations.
When damage is done or retreat is required, it recommended “capping the total level of [state] financial assistance per residential property” and paying more for primary residences than second homes.
And, it added, “The future of residential property insurance, in the face of increasing unaffordability and unavailability, will also require in-depth analysis and debate.”
The Labour Government largely ignored the report.
Then, in August last year, after the government changed, the Climate Change Commission issued a hurry up. Its first report on adaptation warned that policymaking wasn’t happening at the pace or scale required and the status quo was “unsustainable”.
At the same time, a parliamentary select committee made several “high-level” recommendations about how to approach the problem. But the principal takeout from its four and a half months of deliberations was that the MPs from different parties couldn’t agree what should be done.
The Government is now working on a strategic plan, as required by the Climate Change Response Act, and will produce a Climate Adaptation Bill. Back-channels are open to Opposition parties, but this work has not been set up as a cross-party project.
It may also be compromised by other policy and planning decisions the Government has taken. The Environmental Defence Society, among others, says neither the Fast-track Approvals Bill nor the new National Infrastructure Plan require that climate analysis should frame decisions about what to build and where.
Boston agrees with the Climate Change Commission: the status quo is unsustainable.
But we live as if that isn’t true. Our instinct is to ignore, or if we can’t do that, to future-proof existing properties and public infrastructure – build a bigger seawall!
Climate Change Minister Simon Watts is not ignoring the problem. He said recently the Government was putting “significant focus” on adaptation, citing a $200m allocation to “climate-resilience projects”.
But that’s not a lot of money and, without a larger plan, it could be wasted. Even the select committee criticised governments of recent times for taking an ad hoc approach, responding to extreme weather events as they arise.
Boston says we can’t keep doing that: in many cases it won’t be effective or even possible to strengthen or rebuild, either technically or financially. “In all likelihood moving whole towns and suburbs will be required as the century progresses.”
And right now, he says, it’s critical to “prevent new residential developments and related infrastructure in areas already hazard-prone or likely to become so”.
That’s because, despite Gabrielle, it’s still happening. In Auckland in the 10 months after Cyclone Gabrielle, 1415 consents were granted for dwellings on flood plains.
Richard Hills, chairman of Auckland Council’s Policy and Planning Committee, says they’re “hamstrung” by planning laws that developers find too easy to manipulate. And councils can’t ignore those laws or they risk being taken to court.
Boston says a new policy framework must be “equitable, workable and durable”. Without those guiding principles, he warns, the damage from climate change won’t be confined to the weather.
We risk “economic and social disruption” that could be so costly, they “contribute to a downward spiral, prompting greater inequality, hardship and stress, impairing business activity, destroying livelihoods and triggering ever-increasing damage to public infrastructure”.
This could “overwhelm the coping capacity of governments, thereby generating protracted political instability and undermining democratic governance”.
Boston wants to say he is not being alarmist. “It is basic realism in the face of potentially devastating and largely avoidable hazards.”
And he wants, tenuously, to hold on to hope. He quotes the British Anglican priest Lucy Winkett: “Hope can live alongside deep despair.”
So what does Boston think we should do? He says there are no wholly good options, but for adaptation to work, the insurance industry must remain profitable and insurance must remain widely available.
That won’t happen if governments force insurers to offer cover for at-risk homes: they’ll probably just leave the market. Nor will it happen if the Government takes over all home insurance itself, an approach that would burden the Crown with a great deal of financial risk.
The select committee added another note: there is value in the market – banks and insurers – having “the incentive and ability to reduce risk where they can”. That is, developers will stop building in the wrong places if there are no buyers, and there will be no buyers if they can’t get insurance cover or a mortgage.
Boston favours a new Crown-owned scheme, similar to the Natural Hazards Commission Toka Tū Ake (the former EQC). Insurers might continue to cover fire and earthquake damage, while the new Crown agency covers climate-related damage.
Britain has a similar scheme, although it has limited reach to date (2% of homes and only those built before 2009), and it’s “temporary”.
Boston also says those affected by managed retreat will need “comprehensive and properly funded compensation” that should prioritise “new housing to the people displaced over the preservation of property owners’ wealth”.
The working group and the select committee both recommended this too. Providing “adequate housing to those who must relocate was a key consideration”, said the select committee. “We did not consider that preserving people’s wealth or protecting property owners from the risks of property ownership were legitimate objectives of the funding system.”
“The task of adaptation,” says Boston, “will be extraordinarily long, hard and fraught. Indeed, we face an intergenerational task of immense proportions. Multiple issues of unparalleled technical, administration and political complexity will need resolution. These will test our political institutions at every level of government to the limit. The sooner the scope and scale of this task is widely recognised the better.”
He didn’t add that the challenges of adaptation, let alone all the other challenges of a changing climate, barely feature among the big issues New Zealanders tell surveyors they are worried about.
Boston’s book was published in August last year, the same month as the local government conference in Wellington, when Prime Minister Christopher Luxon lambasted councils for not sticking to “the basics” and doing them “brilliantly”.
He wasn’t talking about climate change.
Boston advocates for local decision-making where possible, not only so decisions are right for “the specific situations in each community” but to build “social licence for what may in some cases be transformational changes”.
That is, if you want a community to move, make it their project and give them the support they need.
The just-retired chairman of the Climate Change Commission, Rod Carr, said the same thing: “Adapting to a changing climate is different for each individual community – it is an inherently local issue. Central government can provide a way forward by giving communities the tools they need to make their own choices.”
“Is there anything hopeful in this narrative?” Boston asks towards the end of his book, before declaring that his answer “is surely an emphatic yes”.
In fact, we’re not all like Granity. Examples of managed retreat, not from defeat or in despair but to build better lives, are already emerging.
In Hawke’s Bay, the Hōhepa charity, which cares for people with disabilities, has relocated its residential care facilities from the flood-prone town of Clive into splendid new premises in the hills. Community and government support made it possible.
Across the Heretaunga Plains, on the banks of the Ngaruroro River, the people of Ōmāhu, who were inundated by Gabrielle, are also moving into the hills. They’re rebuilding their marae and village on the original pā site.
As Boston says, managed retreat can be transformative, leading to more efficient and sustainable infrastructure, equitable outcomes and even better insurance.
His “radically different world”, therefore, is not only the world made wild by the weather. It is, or could be, a country made stronger, democratically and socially, as we adapt to the rising waters.
We have choices, he says, but we have to make them.
Simon Wilson is an award-winning senior writer covering politics, the climate crisis, transport, urban design and social issues. He joined the Herald in 2018.
Police believe high speeds were a factor in the crash.