Along with a critique of the country’s ETS scheme, the OECD’s far-reaching economic survey has also looked at the recent consequences of climate change, and New Zealand’s vulnerability to weather events.
Analysis of private insurance payments due to losses from weather events shows for the past eight years claim values have taken a significant lift. They jumped up from under $100 million in 2015, to bounce around $250m in 2016-2021, then topped $3.5 billion in 2023, thanks to Cyclone Gabrielle and other heavy rain events.
The economic survey report notes the growing losses of life and property from climate related hazards call for a comprehensive policy toolkit to mitigate damage and spread costs more widely.
This will require acting on multiple policy fronts to influence both business and householder behaviour to reduce exposure and vulnerability. It suggests greater joint collaboration between central and local government and Māori.
NZ’s climate change adaptation plan gets some praise for its priorities on better risk-informed decisions and its cross-governmental agency approach.
The authors cite the Netherlands, with its Dutch Flood Protection Programme, as a good institutional approach taken to reduce vulnerability. Its approach of spreading best practice and innovation among local authorities in projects is also praised.
But for NZ to implement this type of approach, the government at central and local level needs a lot more information about risks and possible damage than it currently possesses.
NZ’s information and risk modelling ability is highly variable across different local government catchments, with a great need to increase best practice.
Meantime the government has just announced plans to modernise insurance laws, addressing rules that in some cases are over a century old.
The Contracts of Insurance Bill, which has had its first reading in Parliament, aims to simplify the insurance system, providing more peace of mind about disclosure and reducing delays on payment settlements.
“The Bill makes a really positive change for consumers by shifting the onus of disclosure duties to insurers. Right now, consumers must disclose everything that might be relevant to an insurance policy.
“But it’s difficult for everyday Kiwis to know what information is relevant,” said Commerce and Consumer Affairs Minister Andrew Bayly.
Reasonable timeframes and simpler wording in contracts will be included. The minister hopes the Bill will be passed by the end of the year.
