New Zealand faces mounting climate crisis as evidence of environmental and economic impacts emerges

A joint report by the Treasury and Ministry for the Environment details the growing threat of climate change and its economic repercussions for the nation

Community Press
April 07, 2023
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The Intergovernmental Panel on Climate Change (IPCC) projects that by 2040, mean temperatures in New Zealand will be 0.7°C to 1.0°C higher than they were between 1986 and 2005, with the intensity of extreme rainfall events expected to increase by 5% to 7%. By 2050, sea levels are predicted to rise by 23cm to 28cm.

New Zealand is grappling with the harsh reality of climate change as a new report highlights the escalating environmental and economic consequences the country faces. The Treasury and the Ministry for the Environment have jointly produced a Climate Economic and Fiscal Assessment, published on Thursday, that reveals New Zealand's average annual temperature has risen by 1.1°C over the past century, with 2022 recorded as the warmest year to date. Furthermore, the sea level around the country has increased by 20 centimetres (cm), and the rate of sea-level rise is accelerating.

The IPCC projects that by 2040, New Zealand's mean temperatures will be 0.7°C to 1.0°C higher than they were between 1986 and 2005. Extreme rainfall events could intensify by 5% to 7%, and sea levels could rise by 23cm to 28cm by 2050.

The key takeaways from the Climate Economic and Fiscal Assessment report are:

New Zealand faces significant environmental challenges: The country has experienced a 1.1°C increase in average annual temperature over the past century, with 2022 being the warmest year on record. Sea levels have risen by 20 centimetres, and the rate of sea-level rise is accelerating.
Climate projections indicate worsening conditions: The IPCC projects that by 2040, New Zealand's mean temperatures will be 0.7°C to 1.0°C higher than they were between 1986 and 2005. Ex

treme rainfall events could intensify by 5% to 7%, and sea levels could rise by 23cm to 28cm by 2050.
Economic and fiscal costs will be substantial and uneven: Climate change will have significant and uneven impacts on different sectors and groups of society. Governments, businesses, and households must make informed choices to manage these costs effectively.
Urgent action needed for a low-emissions, climate-resilient future: The report aims to help decision-makers identify and manage the risks and opportunities of physical climate change and New Zealand's transition to a low-emissions, climate-resilient future.
Flexibility and prudent financial management are essential: The scale and complexity of climate change-related costs require flexibility and prudent management of public finances, as many factors are beyond the nation's control.
New Zealand is relatively well-prepared, but concerns remain: Ranked ninth globally in resilience, New Zealand has strong institutions and high social cohesion. However, concerns persist about the impacts of climate change on wellbeing, as physical climate change and the transition to lower emissions will put pressure on individuals, communities, institutions, and governance.
Further research and monitoring are needed: As understanding of the potential wellbeing impacts of climate change continues to emerge, the report is expected to be updated with the latest research and evidence on climate impacts for New Zealand.

The report outlines the economic and fiscal implications of climate change, noting that the costs will be significant and unevenly distributed across different sectors and social groups. The choices made by governments, businesses, and households, both domestically and internationally, will determine how the impacts of climate change unfold. The purpose of the report is to help decision-makers in the public and private sectors identify and manage the risks and opportunities posed by physical climate change and New Zealand's transition to a low-emissions, climate-resilient future.

The Intergovernmental Panel on Climate Change (IPCC) projects that by 2040, mean temperatures in New Zealand will be 0.7°C to 1.0°C higher than they were between 1986 and 2005

New Zealand is currently dealing with the devastating aftermath of flooding in the upper North Island and the effects of Cyclone Gabrielle. Although these specific impacts are not included in the Assessment, they serve as a stark reminder of the breadth and scale of climate change's impact on the nation.

The report emphasises the importance of flexibility and prudent management of public finances in the face of climate change, which will be influenced by factors outside of the nation's control. For example, future exposure to physical climate impacts is heavily dependent on actions taken by other countries.

Despite these challenges, New Zealand is ranked ninth globally in its readiness to improve resilience, according to the Notre Dame Global Adaptation Initiative. The country's economy and public finance system have demonstrated remarkable resilience to previous shocks and crises, aided by strong institutions and high levels of social cohesion.

However, concerns remain about the impacts of climate change on wellbeing in New Zealand. The report highlights that physical climate change and the transition to lower emissions will put pressure on individuals, communities, institutions, and governance. As understanding of the potential wellbeing impacts of climate change is still emerging, these effects are likely to be significant, wide-ranging, and unevenly felt.

The Treasury and the Ministry for the Environment encourage readers to reflect on the evidence and analysis presented in the report and to consider New Zealand's readiness to face future climate change impacts in their decision-making processes, with the aim of shaping a collective future of wellbeing.