Chapter 4 Driving climate-resilient development in the right locations

The National Climate Change Risk Assessment 2020 identified that our regulatory frameworks and institutions do not always account for changing risks. The Climate Change Adaptation Technical Working Group identified that Aotearoa needs a planned approach and clear roles and responsibilities for adaptation. We need to make sure our decision-making frameworks for planning and infrastructure investment are updated now so that they drive climate-resilient development in the right locations.

The way we design and grow our places today will affect our ability to withstand the impacts of climate change over the coming decades – and influence patterns of exposure and vulnerability. New development provides opportunities to transform our built environment and ensure our communities and infrastructure are resilient, well located and use best-practice adaptive design. This will substantially reduce the costs of retrofitting in the future and increase our adaptive capacity to live, and thrive, despite the challenges of a changing climate. Development includes both new homes and infrastructure, as well as retrofitting existing buildings, redeveloping public spaces and maintaining and renewing existing infrastructure.

How and where we build needs to be considered on a case-by-case basis. We can be proactive and choose to direct development away from areas that are susceptible to extreme hazards such as sea-level rise, flooding, coastal inundation and wildfire. However, avoidance is not always possible and the benefits of development now may outweigh the benefits of avoiding future climate risk. Regardless of where we develop, there will be some level of climate risk. The right adaptation strategies can reduce risk to a tolerable level (see Chapter 5: Adaptation options including managed retreat).

Adapting early can deliver co-benefits that we can begin to take advantage of – improved health and wellbeing, more affordable and accessible infrastructure services, warmer and drier homes and the opportunity to address existing inequities. The Rauora framework reinforces this approach, calling for a sustainable and responsible ecosystem-based approach within the limits required to restore abundance and ensure intergenerational equity.

Our planning and investment systems are critical in supporting this transformation and building our adaptive capacity. They will guide how we use our land and resources, including the form, location and type of development.

For example:

• our planning system can guide risk-informed decisions, including enabling development in the best locations and considering adaptive responses
• regulations can create standards for climate-resilient buildings and infrastructure
• investment decisions should support the delivery of climate-resilient development.

How and where we develop has long-term impacts due to the lifespan of the built environment. The buildings and infrastructure assets we have now will be the same ones we have as the impacts of climate change are felt across the motu. We have the opportunity to understand likely impacts and begin to adapt now – for example, with infrastructure that strengthens climate resilience.

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

• in the built environment 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: Risk 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 its priority to deliver a climate-resilient built environment. These are:

• system-wide objectives – enabling the right decisions to be made
• objectives for two outcome areas (see Chapter 7: Homes, buildings and places and Chapter 8: Infrastructure).

Table 3 shows the Government’s objectives that guide this priority, across the different systems and outcome areas.

Table 3: Government objectives relevant to critical actions to deliver a climate-resilient built environment

The effects of climate change are being felt now. During the transition to the new system, councils need to avoid locking in inappropriate land use or closing off adaptation pathways before the new resource management system takes full effect.

Councils have existing functions and powers that can be used to avoid, mitigate or manage the impacts of natural hazards. These functions can support climate-resilient development in the right locations.

In particular, councils must recognise and provide for the management of significant risks from natural hazards as a matter of national importance in exercising their functions and powers under the Resource Management Act 1991 (RMA). Both regional and territorial authorities have functions under the RMA that relate to avoiding or mitigating natural hazards.

The National Policy Statement on Urban Development (NPS-UD) [PDF, 509 KB] also supports climate-resilient development. For example, under the NPS-UD, some councils are required to, and others may, prepare future development strategies (FDS).* FDS can help drive climate-resilient development in the right locations. FDS spatially identify where long-term urban growth should happen, considering other inputs like constraints on development. RMA planning documents must have regard to an FDS, and must give effect to the NPS-UD.

The Urban Development Act 2020 (UDA) [New Zealand Legislation website] sets up a framework for delivering comprehensive large-scale urban development. The powers provided by the UDA allow multiple aspects of the urban environment to be changed with greater certainty, integration and speed which would support enabling adaptation to the effects of climate change. Under this Act, Kāinga Ora can determine whether to initiate a specified development project process, or can be directed to do so by Ministers. However, any party can propose a development project to Kāinga Ora. Councils are able to work with Kāinga Ora to identify opportunities for climate-resilient development using the UDA as a tool.

Further, regional and territorial authorities must give effect to the New Zealand Coastal Policy Statement (NZCPS) 2010 [Department of Conservation website], which provides strong direction to avoid new development, redevelopment or changes in land use that would increase the risk of harm or adverse effects from coastal hazards.

However, clear direction about how to guide development in response to climate change outside of coastal areas has not yet been developed. Further, councils face significant pressure to enable further development to meet housing requirements. Through consultation on this plan, councils have asked central government to give them a stronger mandate for assessing and managing climate risk, and to support them to make decisions informed by that risk during the transition to a new resource management system.

To assist local government make good decisions about where and how to develop in the face of climate risk, the Government published interim guidance on the use of new sea-level rise projections in July 2022. The interim guidance updates the Coastal hazards and climate change: Guidance for local government [PDF, 12.1 MB] (coastal hazards guidance). A full update to the coastal hazards guidance will be published in 2023.

The interim guidance is non-statutory. However, from 30 November 2022, councils will be required to ‘have regard to’ this plan when making or changing regional policy statements or regional or district plans. For that reason, this plan directs councils as follows.

When making or changing policy statements or plans under the RMA, including to give effect to the provisions of the NZCPS, councils should use the recommended climate change scenarios outlined below, as a minimum:

• to screen for hazards and risks in coastal areas, use the Shared Socioeconomic Pathway scenario for fossil fuel intensive development (SSP5-8.5) where available, or the Representative Concentration Pathway RCP8.5, to 2130**
• for detailed hazard and risk assessments in coastal and non-coastal areas, use both the middle-of-the-road scenario (SSP2-4.5) and the fossil fuel intensive development scenario (SSP5-8.5) where available, RCP4.5 and RCP8.5, to 2130, for areas at high risk of being affected, adding the relevant rate of vertical land movement locally. Where SSP2-4.5 and SSP5-8.5 are not available, use RCP4.5 and RCP8.5 to 2130, adding the relevant rate of vertical land movement locally
• for all other climate hazards and risks, use the most recent downscaled climate projections for Aotearoa.

In addition, councils should stress test plans, policies and strategies using a range of scenarios as recommended in the interim guidance and the National Climate Change Risk Assessment Framework, as relevant to the circumstance.

These recommended climate scenarios reflect the latest global climate projections released in the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6 WG1) (2021) and NZSeaRise.

* Councils listed as Tier 1 or 2 local authorities in the Appendix to the NPS-UD must prepare a future development strategy (3.12(1) NPS-UD). Councils not listed in the Appendix may choose to prepare future development strategies (3.12(4) NPS-UD).

** Representative Concentration Pathways should be used only where climate data is otherwise not reported under Shared Socioeconomic Pathways – for example, downscaled regional climate projections reported in Climate Change Projections for New Zealand [PDF, 8.1 MB]

Our planning and investment systems shape how decisions are made on the form and location of our built environment, and how infrastructure is funded, financed and used. When investment and planning decisions are made in an integrated way and informed by national objectives, they can help us achieve well-functioning, resilient places. Reforming the planning system is an opportunity to provide a framework and process that respond to climate challenges and support risk-informed decision-making.

This plan outlines the steps the Government will take over the next six years to align its investment strategies with resilience and low-emissions objectives. The Government will reform legislation, institutions, guidance and practices to ensure central and local government, along with private individuals, developers and investors, make better decisions about where to locate new or intensified development.

Action 4.1: Reform the resource management system will be a main driver of the location and form of development. A key objective of the reform is to better prepare for adapting to climate change and risks from natural hazards. The resource management system as a whole will deliver this objective, with each part contributing to improve resilience in a different way.

The Natural and Built Environments Act will provide a foundation for decisions that will reduce climate risk. The National Planning Framework will provide further detail about how to achieve those outcomes – for example, planning for natural hazards and considering future climate risks when identifying areas for development.

The Spatial Planning Act will include requirements for developing Regional Spatial Strategies. These will identify hazard zones and guide development to the most appropriate locations. They could also identify opportunities to increase adaptive capacity – for example, catchment-scale measures to reduce the impact of flooding on the built environment. These reforms will also guide private investment in development to appropriate locations.

Access to the best available climate information is key to effective consideration of climate risk and balancing competing demands in the planning system. Actions in chapter 3: Enabling better risk-informed decisions will ensure that central and local government, along with developers, asset owners and private individuals, have the information, tools and guidance they need to make decisions about the most appropriate location, form and design of new developments and enable confident long-term investments.

Addressing inequity

Action 4.5: Reform institutional arrangements for water services will establish new water entities that will work with councils and communities to deliver better health and wellbeing outcomes for communities. The reform will require entities to establish a consumer forum(s) to assist with effective and meaningful consumer and community engagement. The forum(s) will enable the Government to understand consumer needs, including the needs of communities disproportionately impacted by a reduction of water quality and quantity. These include small and rural communities; hapū, iwi and Māori; households that depend on rainwater tanks; and children, older New Zealanders and disabled people who are more vulnerable to the health impacts of poor water quality.

Occupants of public and Māori housing can be more susceptible to other impacts of climate change. The Government will also support the resilience of Māori and public housing. For example, action 4.3: Establish an initiative for resilient public housing and action 4.4: Embed adaptation in funding models for housing and urban development, including Māori housing, will help reduce the vulnerability of public housing tenants and Māori to climate hazards by adapting existing buildings and ensuring new dwellings are well designed and well located.

Critical actions

Action 4.1: Reform the resource management system

Timeframe: Year 1 (2022/23)
Lead agency: MfE
Relevant portfolio: Environment
Primarily supports: Objective SW1
Status: Current

In early 2021, the Government announced its intention to repeal the Resource Management Act 1991 and replace it with a Natural and Built Environments Act, a Spatial Planning Act and a Climate Adaptation Act.

The Government’s objectives for the reform include better preparation for adaptation and risks from natural hazards, and better mitigation of emissions contributing to climate change.

Resource management reform will be essential to supporting the resilience of homes, buildings and places. It will encourage planning for future growth and development in the right locations, and not in areas prone to climate hazards. The changes will require local government; central government; hapū, iwi and Māori; and communities to plan together how areas will adapt. The reform will provide tools to stop increasing exposure in areas of high or increasing risk, and facilitate the retreat of communities, homes and infrastructure where risks are intolerable.

Among the changes to enable long-term adaptation are:

• a National Planning Framework providing strategic direction and guidance on how to achieve the climate outcomes in the Natural and Built Environments Act
• clear signalling or initiation of adaptation responses, including retreat, through Regional Spatial Strategies that identify hazard zones and areas where adaptation may be necessary
• powers and processes to address ownership of property that is retreated from in the Climate Adaptation Act (or Natural and Built Environments Act)
• more comprehensive support for implementation.

In 2023, the Natural and Built Environments Act and the Spatial Planning Act are expected to be passed.

Action 4.2: Set national direction on natural hazard risk management and climate adaptation through the National Planning Framework

Timeframe: Years 1–6 (2022–28)
Lead agency: MfE
Relevant portfolio: Environment
Primarily supports: Objective SW1
Status: Current

The National Planning Framework will set clear direction for local authorities on how to achieve the climate resilience outcomes in the Natural and Built Environments Act. It will set out methods and requirements for planning for natural hazards and considering future climate risks. The first iteration of the National Planning Framework will contain hazard risk assessment methodologies and direction. This will aid the development of Regional Spatial Strategies (the first products developed as part of a sequential roll out of the new resource management system). This direction will be integrated with direction on other outcomes across the natural and built domains.

The draft National Planning Framework will be released for consultation shortly after the Natural and Built Environments Act is passed.

Action 4.3: Establish an initiative for resilient public housing

Timeframe: Years 1–2 (2022–24)
Lead agency: Kāinga Ora
Relevant portfolio: Housing
Primarily supports: Objective HBP1
Status: Current

A framework for public housing assets will be developed to determine the actions to adapt new and existing assets. This will help reduce exposure of public housing tenants to climate hazards.

The action will also increase the resilience of public housing. It will identify where retrofitting is needed, and ensure dwellings are well located. It will promote effective planning and the design of resilient infrastructure as part of public housing work.

Kāinga Ora is assessing risk exposure and increasing understanding of the assumptions and limitations of the data used in this assessment.

By 2024, a decision-making framework will be in use to determine adaptation actions for both new and existing assets.

Action 4.4: Embed adaptation in funding models for housing and urban development, including Māori housing

Timeframe: Years 1–4 (2022–26)
Lead agency: HUD
Relevant portfolio: Housing
Primarily supports: Objectives HBP1 and HBP2
Status: Current

Existing funding programmes for urban development and housing, including Māori housing, will be updated to consider the costs of existing and future climate hazards. New funding programmes may be created if there are gaps.

This will help ensure funding for urban growth considers climate hazards (eg, new infrastructure is well located and designed to perform under changing climatic conditions). This action will also result in reviewing funding for new development so that government-funded housing, including Māori housing, can cope with extreme events and the changing climate.

By 2024, the Ministry of Housing and Urban Development (HUD) will have begun reviewing funding programmes it administers and amending them to appropriately consider climate-related risk.

Action 4.5: Reform institutional arrangements for water services

Timeframe: Years 1–2 (2022–24)
Lead agency: DIA
Relevant portfolio: Local Government
Primarily supports: Objective SW1
Status: Current

The Government will create new water entities that will work with councils and communities to improve health and wellbeing outcomes for our communities and protect our environment for generations to come. The National Climate Change Risk Assessment 2020 identified risk to potable water as the most urgent risk from climate change. The Government is considering how the proposed new entities will manage climate risk. The reforms will bring a more consistent approach and more certainty about who makes decisions.

The Water Services Entities Bill [New Zealand Legislation website] includes provisions relevant to how the new water services entities will manage climate risk.

If the Bill is enacted in its current form, one of the statutory objectives of the new entities will be to “deliver water services in a sustainable and resilient manner that seeks to mitigate the effects of climate change and natural hazards”.

The Bill will also enable the responsible minister to issue a government policy statement on water services. This document may set out expectations about the contribution of water services entities to the outcomes sought by the Government in a number of areas, including climate change mitigation and adaptation, and water security. The entities will be required to give effect to any government policy statements when performing their functions.

By 2024, legislation to establish water services entities will be enacted (to enable them to become operational from 1 July 2024).

Action 4.6: Integrate adaptation into Treasury decisions on infrastructure

Timeframe: Years 1–5 (2022–27)
Lead agency: Treasury
Relevant portfolio: Infrastructure
Primarily supports: Objective INF2
Status: Current

The Treasury publishes a range of guidance for central government departments and other entities on investment management and state sector performance. It will integrate consideration of climate risks and future adaptation into this guidance. This will help ensure that planning for new assets, renewals and major upgrades will:

• include climate risks in the strategic case, and early assessment of the options
• include options to build adaptive capacity (eg, nature-based solutions)
• incorporate the full cost of adaptation over the life of an asset into decision-making
• set up durable investment management systems to respond to, fund and finance climate action.

The changes to process, and the development of tools, will leverage the system-wide and infrastructure-specific data, tools and guidance being developed as part of the national adaptation plan.

By 2024, advice on the best way forward, and any associated budget bid or Cabinet decisions, will be complete and future implementation measures defined.

Action 4.7: Integrate adaptation into Waka Kotahi decision-making

Timeframe: Years 1–6 (2022–28)
Lead agencies: Waka Kotahi; MOT
Relevant portfolio: Transport
Primarily supports: Objective INF3
Status: Current

Waka Kotahi will incorporate adaptation in the Investment Decision Making Framework, its structured approach to decisions on investment in land transport. This will include business case development and risk assessment. Also embedded will be an intervention hierarchy, which considers integrated planning, demand management, and the best use of existing networks before developing new infrastructure.

By 2024, Waka Kotahi will integrate adaptation into planning, investment and decision-making for the National Land Transport Programme.

Supporting actions

Action 4.8: Amend the Environmental Reporting Act 2015 to allow better measurement of environmental change

Timeframe: Years 1–2 (2022–24)
Lead agency: MfE
Relevant portfolio: Environment
Primarily supports: Objective NE1
Status: Current

This work seeks to improve how the Ministry for the Environment (MfE) monitors, manages, accesses and reports on the environment. The amendments will extend the Environmental Reporting Act’s functionality and breadth so that environmental reports have more impact.