News Risk Management 14 Mar 2018

New Zealand:Insurance Council proposes central agency to address national risks, including climate change

14 Mar 2018

The Insurance Council of New Zealand (ICNZ) has proposed that there should be a central agency that has an overview of nationally significant risks to address climate change.

In a statement last week, it called out the Parliamentary Commissioner for the Environment (PCE) for letting climate change adaptation take a back seat to carbon budgets in its latest report on the establishment of a climate change commission and legislation to enact the Zero Carbon Act.

 “It is disappointing more prominence has not been given to how New Zealand will adapt to climate change impacts,” said ICNZ Chief Executive Tim Grafton, “because 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. Unless we adapt, there will be significant economic, social and environmental costs,” he said.

The ICNZ statement noted that in 2017, extreme weather events caused more than 25,000 claims from homes and businesses at a total cost of over $240 million in insured losses.

It said that if there were to be a 30cm sea level rise between now and 2065, what it called a “relatively conservative possibility”, what are today considered "extreme, 1-in-100-year" high water levels will occur annually in both Wellington and Christchurch, with 32,000 homes within 1.5m of the current mean high tide level.

"How we become more resilient and reduce these risks is what adaptation is all about. 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,” said Mr Grafton. He added that this would require resources and coordination across ministries and bipartisan political commitment towards achieving over the long term.

He pointed out that as noted by the Commissioner, 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."

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