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Cheaper to cut emissions than deal with climate change

Cheaper to cut emissions than deal with climate change effects, report says

By Paul McBeth

Dec. 15 (BusinessDesk) - The cost of climate change to New Zealand is still unknown, but a group of experts tasked with plugging the country's information gaps says it will likely be significant and it would be cheaper to cut greenhouse emissions than simply adapting to those changes.

The Ministry for the Environment today released a series of reports to give a clearer picture of the climate change issues facing the country and offering guidance on how to adapt to them. A technical working group co-chaired by climate change academic Judy Lawrence and Environment Ministry deputy secretary Penny Nelson was tasked with advising the government on adapting to the impacts of climate change, and in a stocktake report released today said the dependence of major sectors on natural resources has the potential to weigh on the economy, disrupting agricultural production and seasonal tourist activities, and creating uncertainty for financial services when managing their risk profiles.

Large events have the potential to create significant one-off costs and stretch the country's ability to respond, whereas increasingly regular small events could cause an even bigger bill.

"While the potential costs of climate change impacts for New Zealand are not known, we do know that our exposure to the impacts of climate change is high, particularly in certain areas (eg, at the coast, within the built environment and to our major economic sectors), and as such the costs will be significant," the stocktake report said.

"Overall, the costs to New Zealand of climate change impacts and adapting to them are expected to be higher than the costs of reducing greenhouse gas emissions. While adapting to climate change cannot be avoided, adaptation is not a substitute for reducing emissions."

The new government acknowledged climate change as one of the biggest challenges facing the world, with the potential to undermine New Zealand's primary industries, and is in the process of developing new 'Zero Carbon' legislation and setting up an independent Climate Commission. It also plans to stimulate low carbon investment through a $100 million Green Investment Fund.

"It’s important that New Zealanders have a clear picture of the potential impacts of climate change so that communities, local and central government, business and other sectors of our economy can make well-informed decisions about how we build resilience and adapt," Climate Change Minister James Shaw said in a statement. "While some sectors and areas are proactive, in general we react to events rather than preparing for them."

The report notes the primary sector is most at risk, but it also says lenders and insurers will also have to cope with increased uncertainty. For insurers, that means they will have to raise premiums to reflect that heightened risk, banks will trim the tenure of their loans, and fund managers will factor in the impacts of climate change in their investment decisions.

A separate report by the Environment Ministry on coastal hazards and climate change incorporated the stocktake into its guidance of local authorities, replacing a 2008 document. The ministry report noted the increased risk posed to coastal communities by climate change-induced higher sea levels was compounded by continued development and population growth in those areas and will demand hard questions be asked of policymakers.

"Communities, councils and infrastructure providers will need to ensure present knowledge of the increasing future risk and the evolving consequences are embedded in key private and public decisions now," the report said. "The risks to future communities, and their ability to address them, should not be made worse by decisions taken now."

Local Government New Zealand agreed with the report that greater coordination and collaboration was needed across central and local governments.

"This report reinforces what LGNZ has been highlighting for some time, which is that adapting to the inevitable impacts of climate change requires strong leadership from both central and local government and a clear, joint plan of attack," president David Cull said in a statement. "Many councils have started adaptation work and want to do more, but need central leadership and support, community buy-in and resourcing."



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