Sinking feeling
Perfect storm looms
Experts say that the impact of sea-level rise will become clear long before the sea washes over the land. And it will probably start underground.
New Zealand has a vast network of underground stormwater and wastewater pipes, many of which were designed long ago and have aged considerably since they were installed.
Like the communities around them, they were built near the coast, under the assumption that the sea would stay where it was.
Most of the pipe network is gravity fed, meaning the pipes start high and tilt downwards, ending at the lowest point, usually at the coast or near a river to discharge into water. They are particularly exposed to sea-level rise, simply because they are closer to the sea, or tidally influenced rivers, than anything else.
When the sea rises, corrosive saltwater is more likely to reach the ends of the pipes and infiltrate the network, causing flooding and pipe damage. In some areas, like South Dunedin, the integrity of the pipe system is crucial.
South Dunedin is more exposed to sea-level rise than any other large community, despite the fact it’s not connected to the sea. The problem there is groundwater; like the sea, it rises and falls with the tides, and has been steadily rising.
Because the groundwater is so high, rain has nowhere to go, and ponds on the surface. If the pipes break, the water will amass.
Adding to this problem is that rain events are projected to become more extreme in most parts of New Zealand, particularly in winter months. When high seas, storm surges, and heavy rain combine, the effect can be too much for existing infrastructure to handle.
Replacing these at-risk assets will be a heavy burden for local authorities – the value of the pipes at risk is unknown, but those most likely to be affected include large areas of Christchurch and Wellington.
If they are not fixed, or moved, broken pipes can cause a variety of environmental and health issues.
Above land, a major issue won’t be infrastructure, but finance. Insurance, in the most basic sense, is protection against uncertainty; it’s a way to transfer low-probability risks, like damage from a fire, an earthquake, or a major flood to someone else.
By definition, insurance covers events unlikely to happen. That the sea will rise is certain.
There is clear evidence that extreme weather events causing damage are becoming both more severe and more frequent.
The greatest threat is when a community as a whole loses insurance, a phenomenon known as ‘‘insurance retreat’’.
There is no evidence this has happened anywhere in New Zealand, but there are growing signs it will. Insurance premiums have risen in some areas following major storms, like the one that hit Edgecumbe in 2016.
When premiums start to rise more broadly in coastal areas, it’s a price signal – the market is saying that living on the coast is riskier than it used to be.
Sea-level rise researchers believe insurance retreat will be among the first major consequences of sea-level rise in New Zealand, because it unleashes a cascade of other issues.
For insurers, it’s a mathematical problem: at what point does an unlikely event become too likely, turning a profit into a loss? Insurers do their own risk modelling, and likely have a sense of when and where retreat will happen, but are reluctant to share that data.
It has left policymakers and researchers working on their own estimates.
Belinda Storey, a researcher from the Victoria University of Wellington, is examining the point at which insurance retreat is likely around the country. She says it’s probably sooner than many might expect.
‘‘Insurance won’t provide cover for a certainty; they’ll only provide for probability,’’ she says. ‘‘Once that probability reaches a point where it’s very likely, then they simply won’t provide insurance at all. So insurers are going to pull out of those locations that are most affected by climate change well before people are ready to move.’’
A major problem is that insurance policies are annual, but the mortgages on the houses they apply to last decades. A house can have insurance one year and not the next, but its mortgage will remain.
That shackles insurance to the banking sector: when a house loses insurance, it leads to a technical default, because having insurance is often a requirement for a mortgage. The bank is left with the house, which has likely lost value.
For the person living in the house, getting another mortgage is tricky, because they can’t use an uninsured property as collateral for a loan. If the house is damaged in a storm, they’ll have to pay the repairs; without private insurance, they are not covered by EQC, either.
Continuing to protect the house may require costly defences, such as a sea-wall, paid for out of their pocket or through targeted rates. The cost of coastal living grows, while the value of their asset drops.
The local authority, which makes infrastructure decisions based on long time periods, may decide to stop investing in the area; the roads decay and the pipes rot. There’s a possibility that the only people living on the coast become those with no other options.
‘‘You may have people moving into those locations who can’t afford to live anywhere else,’’ Storey says. ‘‘You may end up having more vulnerable populations in the most hazardous locations.’’
CLOSER TO CLOSURE
Even though sea levels are rising fairly evenly around the country, two cities are particularly disadvantaged due to their short tidal ranges: Wellington and Christchurch.
They will face these more common extreme sea levels long before Auckland, which is the city least sensitive to sea-level
By 2100, it is likely every high tide in Wellington and Christchurch will be as high as the most extreme tide we can feasibly imagine today.
rise, but all major cities will reach that point eventually.
Niwa research, commissioned by the Parliamentary Commissioner for the Environment in 2015, showed that in those cities, today’s 100-year event will happen every year with about 16cm of sea-level rise (probably reached within 20 years) and every fortnight after 33cm (probably reached within 35 years).
By the end of the century, it is likely every high tide in Wellington and Christchurch will be as high as the most extreme tide we can feasibly imagine today. The new extreme tides then will be much, much higher. Auckland and Dunedin are slower, but a 100-year event could be expected annually after 30cm of sea-level rise in all locations.
Belinda Storey believes insurers are likely to withdraw cover when a claim is likely after a 50-year event or a 20-year event.
For some parts of the country, that threshold will be reached with 10cm of sea-level rise, which is possible within a decade or two. ‘‘We would argue that 5 per cent AED [20 year event] is the absolute latest you can expect to retain insurance – you’re more likely to lose it before then,’’ Storey says.
It’s a dilemma for both coastal residents and local authorities, she says, because it means insurance retreat is likely to happen quickly in some places, long before people are ready or able to move.
‘‘The people that own the properties don’t want to talk about it, councils don’t really want to talk about it, insurers certainly aren’t sharing their information,’’ she says.
‘‘We know it’s happening but it’s hard to get a feel for where and how quickly it is happening. It’s one of those things no-one really wants to talk about.’’
If a community loses insurance, and is then wiped out by a storm, what comes next? There’s no answer to that question.
It’s likely that at some point, some coastal residents will need to be bailed out with public money.
How this would happen is unclear. In previous disasters, like the Canterbury quakes, nearly everyone had insurance – those without it were not compensated by the government unless they were red-zoned.
When an entire community doesn’t have insurance – not because of negligence, but because it’s not available, leaving them unable to move elsewhere – it presents a much thornier mess.
FOR RICHER, NOT POORER
Sea-level rise is not just a scientific problem, or even a political one. It’s philosophical.
Many of the most at-risk communities already rate poorly on the socio-economic index, but researchers say there’s a risk the economic gaps could widen in a world with higher seas.
‘‘In order to respond to something that’s a predictable, ongoing threat, we need to do something different than we already do with natural hazards,’’ says Lisa Ellis, a political theorist at the University of Otago.
‘‘With natural hazards, New Zealand has a beautiful tradition of solidaristic response to fellow citizens in need. The problem in going forward with that is it puts us all in really dangerous relations with each other.’’
Ellis has been specifically studying how the risk of sealevel rise is distributed – how best to ensure that everyone shares the burden equally.
The major issue she sees is that communities with less economic power could end up being forced to move, while wealthier communities use their money to fortify the coasts, in some cases with public money.
When Ellis phrased this phenomenon in simple terms when conducting her research – ‘‘The rich get sea-walls and the poor get moved’’ – she said noone agreed it was fair. But under the existing framework, it’s likely to happen.
‘‘That’s a pretty likely policy if no action is taken,’’ she says. ‘‘People are able now under our current unregulated, decentralised framework, to use private power to adjust local policy actions.’’
Sea-level rise as a whole, she says, poses the threat of a ‘‘perfect moral storm of risk transfer’’ – without a solid, fair legal framework, the disadvantaged would bear the brunt of the problem.
‘‘It’s not as if people are saying I want to take advantage of my fellow citizens. The problem is we don’t have a predictable, legal framework outlining where those risks should lie,’’ she says. ‘‘The legal framework has to come from central government.’’
One of the most obvious ways this risk transfer could happen is through compensation.
Because of insurance retreat, it is likely a community unable to get insurance will, at some point, be damaged by a storm. The question becomes: Who pays for the damage?
A likely answer is the taxpayer. The problem is that signalling this ahead of time could encourage people not to buy insurance, even if it is still available, knowing they’ll be bailed out.
Another risk is that it could prompt expensive, extravagant developments on risky parts of the coast. It would allow a developer to keep all the gains, while externalising the risk to the taxpayer, who would have to pay for the damage.
‘‘Generally speaking, people who make risky coastal investments are relatively advantaged, and the average ratepayer or taxpayer is relatively socially disadvantaged compared to those investors,’’ Ellis says.
‘‘You have a transfer of risk from the least to the most vulnerable in that case.’’
This is a problem with no easy answer. It’s also something that’s almost certainly happening.