Climate change fiscal  costs are largely currently assessed as solely the impacts of major weather events and consequent  restoration costs. While restoration costs after extreme weather events are likely to  rise exponentially over the next  century  and  beyond, there are significant other fiscal  impacts that also need to  be factored into planning. Note also  that  damage to infrastructure from climate change will  steadily increase in  both intensity and frequency over the next  100  years and beyond.

Ignoring future planning for these certainties will  result in  even more damage to  New Zealand’s economy and its citizen’s livelihood   safety and wellbeing  than is necessary. The impacts of climate change will be disproportinately felt by  those with limited incomes.

The longer we delay  anticipating and responding to the impending fiscal risks from  climate change, the greater the impacts will be on New Zealanders.

Food security for all, but particularly those with limited or no  income, is a key issue in  maintaining the wellbeing of New Zealands’  human population.

As climate change increasingly impacts New Zealand,  food supply chains are likely to  become more and more disrupted, resulting in  increasing costs  and decreasing volumes for food and other supplies.

Supply chain  disruption will occur for  a number of  reasons:

• More and more frequent intense  climate events will  result in more  frequent road/rail  washouts  and flooding of increasing magnitude both within  New Zealand and beyond.
• Sea and airline cargo  will  be increasingly disrupted by  extreme  weather events  (including a significant rise in  flight turbulence)  and  intense oceanic storms,  resulting in increase  damage to  transport vehicles and food stocks, higher  insurance costs and resultant food price increases, as well  as disincentives for farmers to produce more produce as export costs rise.
• Drought,  flood and increases in  temperature in New Zealand and overseas  will  result in  reductions in animal numbers  and plant based food.
• Rising sea temperatures, along with  ongoing unsustainable  fisheries exploitation are likely to  mean  the large NZ fishing industry  will  collapse within  a few decades
• The recent  expansion of the dairy ’industry’  into  areas of New Zealand which  are  totally reliant on  intensive irrigation, like the majority of the East  Coast of the South Island, means such  areas will  become completely unsustainable for water intensive crops and  animals. Already  high irrigation levels  in Canterbury,  as a result of drought, are resulting in  unsustainable levels of water being drained from  local  rivers and aquifiers as well  as nitrate and other pollution of potable water supplies
• Rising sea levels will  increasingly impact  on  both sea and airport  infrastructure. Most of New Zealand’s major airports are built in  flood prone areas or  close to the sea,  and  rising tides will  impact  on port sea  walls,  wharves, cranes and  container storage areas. The cost of rebuilds and/or relocation of air and sea port infrastructure are very  significant.
• Consequent reduced  food production for export  by  New Zealand food producers will result in  increasing balance of payment’s deficits which  will  likely  result in  fewer overseas food and other  imports, as well  as less government taxation, resulting in  less income to  finance climate change mitigation.
• As climate instability increases, specific areas of New Zealand like Northland and the East  Coast  of the North Island are increasingly vulnerable to major ongoing  flood and slip  damage and  consequent food production losses. South Island East  Coast  and Nelson droughts are  also becoming more frequent, with similar consequences.

Climate Change is also not only impacting of food supply but is  also beginning to  significantly impact  on  overall  insurer costs for housing,  businesses and new ‘developments’. As insurance premiums rise, all  fiscal  transactions will  slow, as  fiscal risks to  suppliers and purchasers  increase. A slowing economy ( estimated  conservatively as  a reduction of at  least  20% in 30 years) will result in  job losses and further risks to  human wellbeing, unless forward planning and implementation occurs now

Disruptions to and increased risk in  air flights will also  inevitably  result in  progressive reductions  in  tourism  income into  New Zealand (currently 11.4% of GDP)

The recent  analysis of Civil  Defence responses to the Hawkes Bay weather event has demonstrated that  Civil  Defence is not sufficiently resourced to   respond adequately to  even the current level  of extreme events.   Two  cyclones within  a few weeks,  as a Vanuatu  has recently  experienced, would stretch CD to breaking point. Significant increases in central   and local CD resourcing are going to be essential. Similarly, Police and NZ Army will  need upgrades to  cope with  the increasing frequency and magnitude  of climate extreme events.

Energy Consumption

New Zealand’s increasing consumption of energy, particularly in  increased use of EVs and other machinery that is being transitioned to  electrification and also IT /AI/Cloud based impacts. While NZ currently has just  sufficient sources of renewable energy, if current electricity  demands continue to increase, considerable investment in  renewable energy production in  solar  and wind will  be required.  

Carbon Credit Offset  Costs

If we continue under this current government policies to  take less action on  local  carbon reduction, we will  need to  purchase increased offshore  carbon  credits in  the billions of dollars to  meet  our international  obligations. Additionally, failure to meet  our international  obligations will  impact  on  our capacity  to export our produce to many countries.

Biodiversity Loss

The loss of New Zealand’s indigenous biodiversity is  well  documented and acknowledged as a major ongoing concern. However biodiversity loss of both  indigenous and non-indigenous flora and fauna  is occurring at an  alarming rate in New Zealand.

 We do  not  fully understand the intricate interconnections that occur between all  species in Earth’s  soil  and air  and the risks to  inadvertently tripping ‘tipping-points’ resulting in extreme  and sudden biodiversity loss are  consequently high. There are also  significant  difficulties in  attempting to  measure the fiscal  implications of biodiversity loss. However the current trajectory  of biodiversity loss in New Zealand and across the world, has the potential to  not only severely contract  GDP globally,  but potentially to  extinguish  all  life on  earth.

The fertility of our soil, increasingly contaminated with  artificial  fertilizers, pesticides and weedicides is rapidly  deteriorating, particularly as mycorrhizal fungi; essential  to soil fertility, cannot survive in toxic environments. New Zealand’s continued capacity to  produce high volumes of agricultural  exports will  therefore be compromised in  the medium  to long term. The loss of pollinators  through toxicity, loss of habitat  and  introduced viruses is also a  major risk

Population Impacts

In recent years  NZ  governments have  increasingly used  migrant labour as a  cost-effective  mechanism  to increase GDP, however without the consequent   necessary increased development of critical  infrastructure in housing,  health or education. Rapidly increased populations have also  put increasing pressure on  biodiversity as ‘developed’ urban areas have expanded exponentially, and factors like recreational  fishing and foraging by  ever  larger numbers of people , impact  on  species numbers.

Potential  Solutions

Forward planning is urgently required  to both proactively  reduce the inevitable adverse impacts of climate change and to  ensure sufficient funding and other resources are available to  local  and regional  government and local  communities. The human  and fiscal  costs  of not proactively planning  for the inevitable will  be exponentially larger unless work is begun  now.

 Every Local community  must  be encouraged  and resourced to become as self-sufficient as possible as supply chains are increasingly disrupted.

Local  versus National

It is clear that  local  governments will  not be able to  finance the continuous work  to  both  reduce  local  climate change impacts and to  respond to local   adverse events through rates increases. A  formalised collaborative practical  partnership  between local and national  funding bodies needs to be established specifically to  address climate change risks.

National Resourcing

National  systems are  becoming  increasingly financially pressured to  respond to  adverse event mitigation. It is therefore be essential  to  urgently establish  a national  funding body , likely based on  the ACC contribution model that  can   resource the immense amount of work  required.

Iwi

Local  Maori iwi have traditionally played an immensely valuable role in  supporting local  populations put at  risk  by  weather and other adverse  events . Because of their  strong local  knowledge of the environments and resources  and connections and their hugely  practical  responses to  events , iwi  need to be  fully resourced to  support ongoing emergencies. Further, local  iwi’s traditional  and Te Tiriti role of guardianship  (Kaitiaki) of their lands needs greater recognition and support.

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References

https://www.oxfordeconomics.com/resource/the-global-economic-costs-of-climate-inaction

ashttps://www.sciencedirect.com/science/article/abs/pii/S1002016023001388 

https://www.abc.net.au/news/2024-05-22/the-link-between-climate-change-and-turbulence/103877522