A perfect moral storm is looming

Like the red zones created by the Christchurch earthquake, whole communities will be rolled by sea-level rise. This time, we can see it coming, so what will we do about it? Charlie Mitchell reports.

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 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.’’

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