Insurers are welcoming the risk signals indicated by a new report on sea level rise, released yesterday.
The report, by the Commissioner for the Environment, Dr Jan Wright, indicated at least 9,000 homes across the country were identified as lying less than 0.5m above spring high tides.
She said the frequency of coastal flooding would increase as the sea rose and areas of low-lying coastal land that currently flooded during storms or king tides would experience more frequent and severe flooding.
Wright said while the effects would be felt up and down the country, Dunedin in particular was at risk, with the problem ramping up in the next 50 years.
“Think about somewhere like South Dunedin,” she said. “Homes there for some of those people will become uninsurable and then ultimately uninhabitable, but doing something about it is also going to cost money because there would be a very strong case for some sort of assistance, some sort of compensation. It’s a little bit like a slowly unfolding red zone.”
Insurance Council of New Zealand (ICNZ) CEO Tim Grafton said he welcomed the report, saying it helped demonstrate the need to invest in well-managed risk reduction.
“Analysis shows the replacement costs of assets located between 50 and 150 cm from mean high tide levels is between $3 billion and $20 billion,” he said.
“Those are huge replacement costs representing thousands of houses and businesses. Dr Wright’s report makes timely and useful recommendations ranging from better quality guidance on managing the risks to assessing and preparing for the economic impacts of sea level rise.”
Grafton was concerned that the report didn’t touch on underground infrastructure such as stormwater drains, however.
“Many of these are decades old, designed to specifications long before anyone was aware of sea level rise combined with climate change which will bring more intense storm and storm surge event.”
He said Dr Wright’s report woul help advance the debate on several of the points in the 15-point plan ICNZ released last year
on how to better protect New Zealand from natural hazards.
Dr Wright recommended Finance Minister Bill English start planning for the financial fall-out, with one suggestion being a fund like EQC that collected levies from insurance policies.
English said, however that the Government was not intending to put money aside for any future demand from a rising sea level.