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The impact of climate change may lead to higher insurance premiums in the years ahead – and may even mean that some properties are completely uninsurable.
In a new report, insurance law firm Bell Gully examined the proposed Zero Carbon Bill and the legal realities that businesses in New Zealand may face in order to adequately address climate change.
“The Zero Carbon Bill, if passed into legislation, will transform New Zealand’s climate change
landscape as this country seeks to transition to a net zero emissions economy by 2050,” said the law firm in its ‘The Big Picture: Climate Change’ report. According to the report, businesses need to be aware of potential emissions caps, pricing, and the establishment of a long-term framework to transition into a low-emissions economy over the next 30 years.
“Businesses should not forget about the importance of adaptation, which could add significantly to the economic cost of the transition to a low-carbon economy,” the report said. However, the costs of inaction may be greater – including the likelihood of increased insurance premiums.
“The need to adapt to extreme weather events and rising sea levels by relocating and protecting infrastructure like roads, airports, railways and houses could all add to the bill, as could the cost of stranded assets,” the report said.
“Climate change presents both risks and opportunities for New Zealand businesses. For boards that have yet to consider how their own company may be affected by this changing physical and regulatory landscape, now is the right time to do so.”
