Climate plan sparks concern over insurance, development gaps

Government reviews report

Climate plan sparks concern over insurance, development gaps

Environmental

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Stakeholder reactions to the Independent Reference Group’s (IRG) recommendations on climate adaptation have focused on what some describe as critical gaps in the proposed approach.

While the report outlined a pathway to shift risk responsibility from government to individuals, some environmental and policy groups have cautioned that this could lead to inconsistent and reactive outcomes.

Lack of managed retreat and development controls among key concerns

The Environmental Defence Society (EDS) said the absence of a structured managed retreat framework and specific controls to prevent further development in hazard-prone areas are two major oversights.

EDS policy director Raewyn Peart said the recommendations could result in unmanaged, post-event relocation, which may occur only after properties are damaged and insurance payouts become available – leaving those without adequate cover or financial means more exposed.

She added that local authorities would likely find it difficult to plan service withdrawals without a coordinated retreat strategy.

She also noted that while the report calls for avoiding development in high-risk areas, it offers no clear legislative tool to enforce this.

EDS has proposed that a National Environmental Standard be adopted to halt new construction in zones known to be exposed to significant natural hazards.

Report proposes phasing out property buy-outs over two decades

The expert group, convened by the Ministry for the Environment, has recommended a 20-year transition away from government-funded buyouts for properties affected by climate events.

Instead, the panel suggested homeowners should be responsible for assessing and responding to risks associated with where they live.

Under the proposal, government support after major disasters would continue in the form of hardship assistance but would no longer be tied to property values or relocation incentives beyond the transition period.

The group’s advice is part of ongoing work to shape climate adaptation legislation, which has yet to be introduced.

Risk data and local planning highlighted as key enablers

A central theme of the report is the need for improved hazard risk data to inform decision-making at both individual and institutional levels.

The panel called for consistent, accessible, and nationally supported risk information to enable homeowners, insurers, and councils to assess exposure.

To support implementation, the report recommended mandatory adaptation planning for councils under the Local Government Act.

It also proposed legislation to reduce local government liability, enabling councils to make decisions that may include limiting or withdrawing services in areas with heightened exposure.

The group acknowledged that without improved legal and data frameworks, future recovery costs are likely to rise and could strain public and private sector resources.

Equity and targeted support included in recommendations

While outlining a general reduction in public funding for relocation and property loss, the report recommended targeted support for iwi and Māori communities, particularly for protecting cultural infrastructure such as marae and urupā.

It also recognised the challenges faced by rural and lower-income populations, who may have fewer relocation options or live in areas served by limited infrastructure.

Government to review recommendations alongside prior inquiries

Climate Change Minister Simon Watts said the government is reviewing the panel’s report in conjunction with previous climate adaptation inquiries and related advice.

“We will now take the time to review recommendations and announce decisions in due course,” he said, as reported by RNZ. “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.”

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