Chapter 5 Adaptation options including managed retreat

Although the appropriate location, form and design of new development in the right places will help future-proof our communities, many communities are already under threat from natural hazard events – which will increase over time. Successful adaptation to the impacts of natural hazards and climate change will be vital to the future health and wellbeing of our communities.

In our existing places, people can work together to reduce risk through social networks, nature-based and hard-engineering solutions, through upgrades to existing buildings and infrastructure to withstand more extreme climatic conditions, and by being better prepared. Councils and communities should consider the full range of adaptation options for areas under threat.

These include:

• avoiding risk – for example, by locating development away from areas prone to hazard
• protecting assets from risk – for example, by building protective structures such as sea walls
• accommodating risk – for example, by incorporating adaptation options into the design of developments
• retreating from risk – for example, by relocating existing development away from high-risk areas.

Figure 7 illustrates these options. Avoiding risk is primarily covered by Chapter 4: Driving climate-resilient development in the right locations.

A hybrid approach that uses different adaptation options may be appropriate, and the suite of adaptation options used may change over time. The most appropriate adaptation options will be different for every community or project. A place-based and risk-based approach should ensure the options adopted will meet the specific needs and circumstances of the community. Working with communities to assess these options means that decisions made as to which options will be adopted for a particular community are robust and are well supported and understood by that community.

Figure 7: Adaptation options – avoid, protect, accommodate, retreat

Councils and communities can consider a range of planning options that can either avoid or delay the need for relocation. Restricting further development or particular uses of land through planning rules – for example, zoning – can prevent further exposure to risk. This approach can also signal that an area may not be viable for development in the longer term. Standards can be set – through rules and consent conditions  ̶  to improve the resilience of development in areas exposed to risk. Examples of these types of standards could include minimum floor heights and flood-proofing requirements.

In some highly exposed areas, the risk from natural hazard and climate impacts may become intolerable. Inundation of buildings and infrastructure will start to occur, leading to direct damage and loss of some facilities like roads or other lifeline services, and public open space. In some cases, the risks may reach a threshold where relocation will need to be considered.

This chapter addresses the following significant risks identified by the National Climate Change Risk Assessment 2020:

• in the human domain (H):
  • H1: Risks to social cohesion and community wellbeing from displacement of individuals, families and communities due to climate change impacts.
• in the built domain (B):
  • B1: Risk to potable water supplies (availability and quality) due to changes in rainfall, temperature, drought, extreme weather events and ongoing sea-level rise
  • B2: Risks to buildings due to extreme weather events, drought, increased fire weather and ongoing sea-level rise
• in the governance domain (G):
  • G1: Risk of maladaptation across all domains due to the application of practices, processes and tools that do not account for uncertainty and change over long timeframes
  • G2: Risks that climate change impacts across all domains will be exacerbated because current institutional arrangements are not fit for climate change adaptation. Institutional arrangements include legislative and decision-making frameworks, coordination within and across levels of government and funding mechanisms.

The Government has identified a range of objectives for laying the foundations for adaptation, including managed retreat. These are:

• system-wide objectives – laying the foundations for the right decisions
• objectives for four outcome areas (see chapter 6: Natural environment, chapter 7: Homes, buildings and places, chapter 8: Infrastructure and chapter 10: Economy and financial system).

Table 4 sets out the objectives that guide this priority area, across the different systems and outcome areas.

Table 4: Government objectives relevant to critical actions for laying the foundations for adaptation options including managed retreat

The Government is rolling out a number of major reforms and processes to help New Zealanders respond to existing climate risks, and consider the full range of adaptation options. The resource management reforms are at the centre of that programme of work. These will:

• require local and central government; hapū, iwi and Māori; and communities to plan together how their areas will adapt
• provide planning tools to halt increasing exposure in high-risk areas and facilitate the retreat of communities, homes and infrastructure where risks are intolerable
• support adaptation decision-making by setting out methods and requirements for councils when planning for natural hazards and considering future climate risks through the National Planning Framework
• increase integration between land-use planning and investment decisions. This means that decisions around zoning or other planning mechanisms can occur at the same time as investment and infrastructure planning.

Action 5.1: Pass legislation to support managed retreat will help to implement decisions to retreat once these have been made. This legislation will be developed in partnership with hapū, iwi and Māori and in collaboration with a range of stakeholders that will use it.

Local government is on the front line in preparing for and dealing with climate impacts and risks. To help local government respond to climate risk, action 5.2: The Future for Local Government review will consider changes to local government funding and financing to ensure viability and sustainability, fairness and equity, and maximum wellbeing. The review will also consider when local authority funding should be shared across local government, or with other partners, and when central government co-funding might be justified.

The Government has heard from New Zealanders, and particularly local government, that they are interested in how the new tools and powers being developed might change where costs fall and how costs can be met. To provide greater clarity, the Government will publish the programme of ongoing work across government, which will inform how Aotearoa meets the costs of climate change and invests in resilience (see action 5.5: Publish the programme of work on how Aotearoa meets the costs of climate change and invests in resilience).

Other actions in this plan will also send signals about risk and opportunities, to help manage risks and redirect investment towards resilient projects and products. These include action 3.1: Provide access to the latest climate projections data and action 3.5: Support high-quality implementation of climate-related disclosures and explore expansion. These signals will impact on how adaptation costs will be met and can help to unlock investment.

Action 5.1: Pass legislation to support managed retreat will help to implement decisions to retreat once these have been made. This legislation will be developed in collaboration with a range of stakeholders who will use it, and in partnership with hapū, iwi and Māori, who have particular considerations in relation to whenua Māori and Tiriti considerations.

Addressing inequity

Legislation for managed retreat will need to consider how to minimise risks to social cohesion, which can be worsened when communities need to relocate. It must consider unique challenges for low-income groups and mobility-compromised and disabled people when faced with having to shift. One way of doing this is to provide certainty about the process and the opportunities for people and communities to engage.

The Government will work with stakeholders and partners to draw lessons from existing situations of high risk. This will make sure the managed retreat legislation delivers what is needed for councils and communities to deal with issues on the ground. While developing the legislation, the Government will consider how current tools can support managed retreat before new legislation (for managed retreat and resource management reform) comes into force.

Critical actions

Action 5.1: Pass legislation to support managed retreat

Timeframe: Years 1–2 (2022–24)
Lead agency: MfE
Relevant portfolio: Climate Change
Primarily supports: Objective SW1
Status: Current

The Government will develop legislation to address the complex technical, legal and financial issues associated with managed retreat as described by the Resource Management Review Panel. This legislation is being progressed through the development of the Climate Adaptation Act.

It will draw lessons from existing situations of high risk to make sure it delivers what is needed for councils and communities dealing with issues on the ground. There will be consideration of how current tools and mechanisms can support managed retreat in advance of new legislation – both for managed retreat and for resource management reform more generally – coming into force.

By the end of 2023, the Government is expecting to introduce the Climate Adaptation Bill, setting out the managed retreat framework.

Action 5.2: The Future for Local Government review

Timeframe: Year 1 (2022/23)
Lead agency: DIA
Relevant portfolio: Local Government
Primarily supports: Objective SW1
Status: Current

In 2021, the Minister of Local Government started an independent review of the future for local government.

Adaptation will bring new challenges and opportunities to local governance. The system must be equipped for agile, sustainable and proactive decision-making and implementation. The review is likely to include recommendations on what local government does, how it does it and how it pays for it. This will include what should change in funding and financing to ensure viability and sustainability, fairness and equity, and maximum wellbeing. The review will look at when local authority funding obligations should be shared across local government or with other partners, and when central government co-funding might be justified – as is recommended by the Productivity Commission and He Pou a Rangi – Climate Change Commission for large challenges or shocks, and local services with national benefits.

In mid-2023, the Local Government Review Panel will provide the Minister of Local Government with its final report and recommendations for improving the local governance system. Following this, the Government will decide how to respond to the panel’s recommendations.

Action 5.3: Complete case study to explore co-investment for flood resilience

Timeframe: Year 1 (2022)
Lead agency: DIA
Relevant portfolio: Local Government
Primarily supports: Objective SW2
Status: Current

The Department of Internal Affairs (DIA) is working with the National Emergency Management Agency (NEMA), the West Coast Regional Council, the Buller District Council and local iwi to explore options to increase flood resilience in Westport. This case study will focus on the challenges facing small local authorities and vulnerable communities in funding flood risk management. It will also highlight the challenges of repeat flooding and climate impacts on an existing community that is located on a flood plain with limited flood defences in place. The case study below describes the current situation in Westport.

In June 2022, ministers will receive a strategic business case from the Buller District Council and West Coast Regional Council on a package of flood resilience options to reduce flood risk in Westport.

Action 5.4: Develop options for home flood insurance

Timeframe: Years 1–2 (2022–23)
Lead agency: Treasury
Relevant portfolios: Finance; Toka Tū Ake EQC
Primarily supports: Objective EF2
Status: Current

Insurance supports New Zealanders’ resilience to extreme weather events by facilitating recovery. It does so by paying out for losses and reducing the risk that the Government has to design ad hoc, post-event interventions to help communities recover. Home insurance could also bring other benefits, including signalling risk through underwriting and pricing, and giving homeowners peace of mind.

Work is underway to increase understanding of the scale and timing of changes to the insurance market arising from greater use of risk-based pricing by insurers and flooding exacerbated by climate change. This work includes exploring options to support access and affordability of flood insurance. The Government intends to develop options that ensure home flood insurance continues to play an appropriate role in supporting community resilience.

How effectively flood risks are managed in Aotearoa, including adapting to the changing climate, will influence the scale and timing of any insurance issues. This work has important links with other risk management and adaptation initiatives to keep communities safe. These initiatives reduce communities’ exposure to flooding by giving them a better understanding of the risk they face, avoiding development in flood-prone locations, and increasing investment in flood protection.

By the end of 2022, the Government will have received advice on flood insurance options and agreed to next steps. Further implementation measures will depend on the Government’s decisions on options.

Action 5.5: Publish the programme of work on how Aotearoa meets the costs of climate change and invests in resilience

Timeframe: Year 1 (2022)
Lead agencies: MfE; Treasury
Relevant portfolios: Climate Change; Finance
Primarily supports: Objective SW4
Status: Current

New Zealanders share in the costs of managing natural hazard risk, through their own investment decisions, insurance, rates and taxes. Additional investment from public and private sources must also be facilitated where necessary to respond to the growing risks from climate change.

There are many processes underway that could change how New Zealanders currently share the costs of climate change. These include action 4.5: Reform institutional arrangements for water services, action 5.2: The Future of Local Government review and action 5.4: Develop options for home flood insurance.

The Government is also considering adaptation criteria for the Climate Emergency Response Fund (CERF) and is launching its Sovereign Green Bond programme (see action 5.15: Public investment in climate change initiatives). In addition, it continues to explore other options to encourage climate-positive, resilient investment. This will build on existing action 3.2: Design and develop risk and resilience and climate adaptation information portals, and action 3.5: support high-quality implementation of climate-related disclosures and explore expansion. It will communicate how this range of work is progressing across government in one place. A dedicated webpage will be kept up to date as work evolves and new actions are developed.

By the end of 2022, a dedicated webpage will be established to provide an update in one place on the range of work progressing across government.

Action 5.6: Scope a resilience standard or code for infrastructure

Timeframe: Years 1–3 (2022–24)
Lead agency: Te Waihanga
Relevant portfolio: Infrastructure
Primarily supports: Objective INF3
Status: Current

Te Waihanga will scope the impact (including of costs, benefits and regulations) of a standard or code for resilient infrastructure.

This action will focus on:

• how a standard or code would encourage risk reduction and resilience planning in existing and new assets
• how to integrate resilience planning into the asset-management cycle, to maximise uptake and impact
• the role of resilience standards in enabling communities to better match their own planning and strategies to the resilience of the networks they rely on, reviewing the costs and benefits of this being a mandatory or voluntary standard.

If a standard or code proceeds, it would draw on international leading practice, the guidance for assessing impacts on physical assets and the services they provide (Action 3.8), and the general data, tools and guidance that will be part of the system-wide actions.

By 2024, stakeholder feedback on a resilience standard or code will have been received.

Action 5.7: Reduce and manage the impacts of climate hazards on homes and buildings

Timeframe: Years 1–4 (2022–26)
Lead agencies: HUD; MBIE
Relevant portfolios: Housing; Building and Construction
Primarily supports: Objective HBP1
Status: Current 

This action includes five components that build off one another and are necessary to inform regulatory change and other actions in this chapter. These five components are:

• collate existing information to help people adapt their homes and buildings
• carry out researchto understand the impacts of climate hazards on various housing typologies, and the costs and benefits of adaptation at the property level
• develop property-level guidance based on updated climate data to inform homeowners and renters about climate impacts and their options to respond to risks
• develop an assessment framework to help building owners, developers and new home builders identify relevant climate hazards and understand their building’s adaptation requirements
• investigate incentives that could help building owners to increase their building’s resilience.

Work will start immediately on providing existing information to help people understand adaptation for homes and building. By August 2024, enough data will be available to inform the development of an assessment framework in years 3–4 (2024–26) and regulatory updates.

By 2024, initial research stages will have been scoped and funded and will be underway. Sufficient data will be available to inform the development of an assessment framework in years 3–4 (2024–26).

Action 5.8: Support kaitiaki communities to adapt and conserve taonga/cultural assets

Timeframe: Years 1–6 (2022–28)
Lead agency: MCH
Relevant portfolio: Culture and Heritage
Primarily supports: Objectives HBP3 and HBP4
Status: Current

Work across government to ensure hapū, iwi and Māori and communities have access to information so they can plan for a changing climate and adapt their cultural assets. Support includes advice, wānanga (conferences, forums, seminars), expert assistance, information sharing and funding advice for kaitiaki to self‑determine adaptation pathways.

This action will be a coordinated cross-government approach, partnering with hapū, iwi and Māori to understand the threats to cultural heritage and to support initiatives to reduce the impact.

This action will also help achieve objective HBP1 (Homes and buildings are climate resilient, and meet social and cultural needs) by adapting and conserving physical structures of cultural value. It also contributes to objective HBP4 (Threats to cultural heritage arising from climate change are understood and impacts minimised) through its focus on taonga of significant value to hapū, iwi and Māori.

By 2024, the Ministry for Culture and Heritage (MCH) will have started working with relevant partners on how improvements can be made to support and access to information on cultural assets to assist kaitiaki to self-determine adaptation pathways.

Action 5.9: Prioritise nature-based solutions

Timeframe: Years 1–6 (2022–28)
Lead agencies: DOC; MfE
Relevant portfolios: Environment; Conservation
Primarily supports: Objective NE3
Status: Current

To address the climate and biodiversity crises together, the Government will prioritise nature-based solutions in planning and regulations, where possible, for both carbon removals and climate change adaptation. It will also investigate how to best ensure that climate change policy and planning use a biodiversity lens to prioritise nature-based solutions.

By 2024, a framework will be developed, and prioritising of nature-based solutions in regulations and planning will be underway and future implementation measures confirmed.

Supporting actions

Action 5.10: Develop and implement the Transpower Adaptation Plan

Timeframe: Years 1–5 (2022–27)
Lead agency: Transpower
Relevant portfolio: Energy and Resources
Primarily supports: Objective INF3
Status: Current

The Transpower Adaptation Plan will outline how Transpower will adapt to climate change through the design, delivery and operation of the national grid. It will address exposed assets and new investment in infrastructure, and consider adaptation in maintenance and development programmes.

Transpower will consider multiple risks to the national grid from climate hazards, including coastal inundation, increased frequency of high-impact flood and wind events, and accelerated erosion.

Action 5.11: Encourage and support the evaluation of climate risks to landfills and contaminated sites

Timeframe: Years 1–2 (2022–24)
Lead agency: MfE
Relevant portfolio: Environment
Primarily supports: Objective INF1
Status: Current

Coastal inundation and flooding could be a significant risk to existing and closed landfills and contaminated sites across the country. At least 110 closed landfills are vulnerable to sea-level rise.

The Ministry for the Environment (MfE) has helped councils develop a tool to evaluate climate risks for landfills and contaminated sites. This may make it easier for local government to evaluate these risks and support planning to address them.

Action 5.12: Explore funding options to support the investigation and remediation of contaminated sites and landfills vulnerable to the effects of climate change

Timeframe: Years 4–6 (2025–28)
Lead agency: MfE
Relevant portfolio: Environment
Primarily supports: Objective INF1
Status: Current

The liability of legacy landfill remediation generally sits with territorial authorities, which have variable ability to pay, particularly in smaller local government areas. Considering this, the Government has agreed to consider how best to support the funding of remediation.

Access to funding will help to turn risk assessment into risk reduction, and ensure remediation occurs before inundation risks become a reality. The scope of the current Contaminated Sites Remediation Fund does not cover climate impacts.

Action 5.13: Connect communities to wider response and recovery support

Timeframe: Years 1–6 (2022–28)
Lead agency: NEMA
Relevant portfolio: Emergency Management
Primarily supports: Objective C3
Status: Current

This action will continue work with central and local government, communities (including rural communities), iwi, organisations and others to support effective, integrated disaster response and recovery. Communities affected by disasters will be assisted by networks that are locally led, regionally coordinated and nationally supported.

Action 5.14: Support the development of definitional tools to encourage greater investment in ‘green’ projects

Timeframe: Years 1–3 (2022–25)
Lead agency: MfE
Relevant portfolio: Climate Change
Primarily supports: Objective SW2
Status: Current

This will support the development of a ‘green’ taxonomy to identify a common definition of climate and nature-positive investments. This could help guide businesses that are investing in both adaptation and mitigation to protect against greenwashing. If aligned with best practice, it could support greater international investment in Aotearoa New Zealand’s climate-resilient projects, including nature-based solutions.

Action 5.15: Public investment in climate change initiatives

Timeframe: Years 1–6 (2022–28)
Lead agency: Treasury
Relevant portfolio: Finance
Primarily supports: Objective SW3
Status: Current

The Government is supporting climate change objectives through its approach to the public finance system. This includes the establishment of the Climate Emergency Response Fund (CERF) and the Sovereign Green Bond (Green Bond) programme.

In 2021, the Government established the CERF with an initial $4.5 billion down payment, funded with cash proceeds from the New Zealand Emissions Trading Scheme (NZ ETS).

Government agencies can submit bids to the CERF, primarily through the annual Budget process, to access funding to support climate change initiatives.

In Budget 2022, the CERF was focused on the emissions reduction plan. However, for future Budgets the Government will consider extending the scope of the CERF to fund measures to support climate change adaptation.

In November 2021, the Government announced plans to issue Sovereign Green Bonds (Green Bonds) from 2022 onwards. Green Bonds provide financing for low-emission or environmental projects. Money raised from the Green Bonds will be used to support projects that help reach our climate objectives. Subject to market conditions and progress of establishment activity, final details of the Green Bond programme will be announced mid-2022 and then Green Bonds will be issued in late 2022.

Action 5.16: Identify options to increase the integration of nature-based solutions into urban form

Timeframe: Years 1–2 (2022–24)
Lead agency: HUD
Relevant portfolio: Housing
Primarily supports: Objective HBP2
Status: Proposed

This work will build on indigenous knowledge and new research to produce new data and insights on nature-based solutions such as vegetation (eg, street trees and green roofs) and water elements (eg, open canals and waterways). This includes understanding barriers and identifying ways to accelerate nature-based solutions through changes to urban form and development. Findings will be progressed through action 4.1 Reform the resource management system and action 7.5: Update housing and urban settings. Given the already inequitable distribution of nature-based solutions such as trees and green spaces in our cities, this action will also carefully consider impacts on equity.

This action will help reduce the impact of climate events, such as flooding and heatwaves, in our urban areas to improve outcomes for people, communities and biodiversity. It will also help to ground urban adaptation in mātauranga Māori, and recognise that its outcomes already draw on fundamental Māori values.