Editorial: Who pays as the storms worsen?

Monday, 6 July 2026

EDITORIAL: In the wake of April’s floods in Wellington, the Minister of Climate Change and Minister of Local Government, Simon Watts, wrote to councils urging them to plan for climate risks — but also for affordability.

It is tempting to file that away as a statement of the obvious. Yet it strikes at the heart of one of the biggest challenges posed by climate change, and one that governments at every level have yet to confront adequately.

Mr Watts’ letter was, for the most part, technical. It warned councils against committing to enormous capital projects based on worst-case climate scenarios which, the Government argues, are no longer the most appropriate basis for long-term planning.

“The Government is increasingly concerned that some climate-related planning and investment decisions may be relying on high-end emissions scenarios in a way that results in unnecessary costs being imposed on ratepayers, businesses and communities,” the minister wrote.

Exactly what risks councils should be planning for will evolve as climate science improves. Mr Watts’ intervention is best understood in the context of a Government that frequently accuses councils of being spendthrifts, while not always displaying exemplary fiscal discipline itself.

For two decades, New Zealand's climate politics has been trapped in the same argument: how much should this country do to reduce global emissions, and at what cost? One side argues that, as a wealthy nation, New Zealand has both the means and the responsibility to reduce emissions, whether through regulation or market mechanisms. Beyond the moral case, it argues that maintaining access to export markets will make the economic case over time.

The other side points out that New Zealand produces less than 0.17 per cent of global greenhouse gas emissions. From that perspective, pushing too aggressively to reduce emissions imposes heavy costs while making little measurable difference to the global climate. Twenty-three years after a former Prime Minister, Helen Clark, proposed what became known as the 'fart tax', the debate over agricultural emissions remains stuck in much the same place.

This argument has dominated climate politics for years. It has produced policy lurches with each change of government, all circling the same questions of fairness: what is New Zealand’s fair share, what is a fair price to pay, and who should bear that cost? Those are important questions. But they have tended to obscure the equally important question of adaptation.

Whatever New Zealand does about emissions, it must also prepare for the consequences of a changing climate. Those are challenges over which this country has far greater control. That means deciding how and where communities should continue to grow, investing in stopbanks, seawalls and flood protection, and giving councils the confidence to prevent development in areas that are increasingly vulnerable to flooding. Most importantly, it means deciding who pays.

In many respects, the market is already ahead of government. Insurers, whose business is pricing risk, increasingly assess neighbouring properties differently based on elevation, drainage and exposure. Global reinsurers are becoming less willing to absorb the growing cost of routine flooding and severe weather events, helping explain the sharp rise in insurance premiums in recent years. The Government may cap rates, but it also expects councils to adapt. Those two objectives will become increasingly difficult to reconcile.

Ultimately, only central government can establish consistent national rules about where flood mitigation should occur, when communities should retreat, and what should happen to areas that become effectively uninsurable.

Resilience is now a core part of the work of the Department of the Prime Minister and Cabinet, and the department itself has been put on a sustainable financial footing for the first time in decades. The Government is working up the first national flood map to help with future planning. These are positive developments

But as with the leaky homes crisis, once enough people are affected, the problem inevitably lands on the Government's desk. However much ministers may wish otherwise, the government will end up being the last institution with both the authority and balance sheet to carry at least part of the financial burden in the event of a big storm or flood.

If New Zealand put as much political energy into adapting to climate change as both sides of aisle do into the performative politics of it, the nation would be in a stronger position to deal with its consequences.