Outcry over 'morally bankrupt' call to end government flood buyouts

Otago Daily Times

2 days ago

By Kate Newton of RNZ
Phasing out government assistance for climate adaptation and property buy-outs would be "morally bankrupt", a climate policy expert says.
An independent reference group set up by the Ministry for the Environment on Wednesday released a suite of recommendations to help the government shape climate adaptation legislation.
Following a 20-year transition period, homeowners whose houses are flooded or damaged by weather events should not expect buy-outs, the group recommended.
The group also recommended that funding for adaptation measures such as flood schemes, sea walls and blue-green infrastructure, should follow a 'beneficiary pays' approach in most cases.
"This would mean those who benefit most from these investments contribute more."
Central government should only invest in adaptation if it would protect Crown assets, "or where broader national benefits can be realised".
"Central government investment or other financing strategies may be appropriate to help overcome challenges in particularly vulnerable areas, where there is less ability to pay."
Victoria University emeritus professor Jonathan Boston, who was part of a previous expert working group on climate adaptation, said the message from the latest report to New Zealanders was clear: "You are on your own."
The report rightly recognised the need for urgent action on climate adaptation, and to make consistent, reliable information about climate hazards available, Boston said.
However, the recommendations to withdraw financial assistance for both property buy-outs and adaptation measures, and to leave decision-making up to individuals, were "fundamentally flawed".
"One of the core responsibilities of any government is to protect its citizens and to deal with natural disasters and so on. That is above almost anything else."
To put an end-date on that was "morally bankrupt and highly undesirable", he said.
The report wrongly assumed that people would act rationally if they were properly informed of the risks, he said.
"We know from vast amounts of literature that people suffer from all kinds of cognitive biases... and that these have a profound influence on whether people make sensible decisions or not.
"And quite apart from cognitive bias, lots of people lack choices. They lack the [financial] resources to make good decisions."
Boston also criticised the recommendation of a transitional period, saying the risks from climate change would continue to evolve well past 2045 or another hard end-date.
He and others had previously warned against the 'moral hazard' of creating expectations of generous property buy-outs every time there was a severe weather event.
"We certainly need to be ensuring that we don't create incentives for people to stay in risky areas or indeed to build in areas that are going to become risky because of climate change," he said.
"But the idea that you can just sort of leave it to individuals to decide what's going to happen and have no oversight or involvement in helping people to make good decisions and helping people to move where they have to move, I just think it's bizarre." Managed or unmanaged retreat?
Environmental Defense Society policy director Raewyn Peart said the report seemed to be moving away from the concept of "managed retreat", where communities moved out of harm's way in a coordinated fashion.
"The approach seems to be unmanaged retreat, where we'll give people information and a transition period - they're on notice - and at that point, people can make their own decisions about whether to move or not."
That would be unworkable, Peart said.
"Some people will move, some won't, councils [will have] to provide services to a community that's gradually emptying out, people there who can't afford to move will be trapped into a risky situation - they may be facing regular floods of their properties.
"I just don't think it's in the best interests of the country to essentially leave it to the market and people's individual decisions."
The report recommended handing over responsibility for adaptation planning to local councils, but it was unclear whether central government would provide any financial or administrative support, she said.
"Some councils are really on to it and are already doing it - they have the resources. It's the small councils who may only have one planner, who have no expertise in adaptation planning."
The latest report echoes previous warnings that insurers could increase premiums to unaffordable levels, and even withdraw from some areas, as the risk from climate change hazards continued to increase.
Insurance Council chief executive Kris Faafoi - whose organisation has long called for greater national direction from central government on climate adaptation - said it was good to see the report authors recommending urgent action.
"There's still some very difficult issues to work through - but these extreme weather events are going to happen, and being able to protect communities and to keep insurance affordable and available is really important in the long-term."
There was little appetite anywhere on the political spectrum for expensive buy-outs of properties to continue, he said.
The question of who would actually pay for adaptation measures still needed to be answered, Faafoi said.
"In the report itself, there was an expectation that councils will do a lot of the heavy lifting and where some communities might find it a challenge to be able to pay for some of the protections … then investment from the Crown might be necessary."
But following a 'beneficiary pays' approach could see the costs of adaptation fall heavily on some communities.
"I think reading between the lines, there could be the likes of targeted rates in some areas.
"Again, that has to be floated with communities and as to whether or not people who benefit from that might be able to pay for that."
The report noted the financial difficulties many councils faced.
"Funding will be a challenging proposition if councils' ability to increase rates is constrained," the authors wrote.
Climate Change Minister Simon Watts told RNZ the government welcomes the independent recommendations for how New Zealand can adapt to the impacts of climate change.
"We will now take the time to review recommendations and announce decisions in due course," Watts said.
"The report is not government policy, however the Government is considering the group's recommendations, alongside the findings of last year's cross-party climate adaptation inquiry and other advice, as it works to put in place the building blocks for a national adaptation framework."