It's officially a climate emergency, but what will it cost us?
Insurance for some coastal homes in major cities will increase five-fold. Photo: RNZ / Cole Eastham-Farrelly
Parliament yesterday voted to declare a climate emergency, including a commitment for the public service to be carbon-neutral by 2025.
Westpac chief economist Dominick Stephens said achieving carbon neutrality by 2050 will slow down economic growth.
"Our average income from society will continue to grow, but more slowly."
He said that by 2050, average GDP per person may be $2700 a year lower than it would have been had we not had to decarbonise. In other words - the economy is almost $3000 worse-off each week.
He said it was because of the impact that climate action would have on economic growth - which he calculated was 0.1 percent per year.
A report commissioned by Westpac in 2018 concluded fast action could save New Zealand $30 billion by 2050.
Stephens said no one could say for sure how much cash was needed because there were so many changing variables.
"This will be costly. A whole lot of people talk about there will be innovation to deal with climate change and it could transform the economy, and that is all true but you have to remember, that is a silver lining.
"Economies are complex things and they are good at getting around big issues - as we've seen with Covid - but it's still going to be costly and I think that cost is going to be quite significant."
Researcher Belinda Storey has released a report that finds insurance for some coastal homes in major cities will increase five-fold by 2050 due to climate risks.
A conservative estimate sees the cost of insurance for 10,000 compromised homes increase by $200 per week.
Climate researcher Dr Jim Salinger from Victoria University said the longer we wait to tackle sea level rise, the more expensive and difficult things would get.
"If we just let it happen, what happens is ... the cost of trying to bail out those properties, those just become higher and higher."
Salinger has spent 30 years battling for meaningful action on climate change. He said while the government's promises yesterday were great, he remained a little cynical.
"Various governments have been dithering around and climate change continues happening, and we need to walk the talk, rather than talk the talk all the time."
Whanganui mayor Hamish McDouall from Local Government New Zealand said councils that failed to act now may "potentially" be lumping future ratepayers with a bigger bill.
"My theory generally is that it's better to spend money now. If action isn't taken to protect key roading routes, it's only going to cost more in the future."
McDouall said billions of dollars worth of local government infrastructure was already at risk from sea level rise of one-and-a-half metres.
Fixing that worked out to about $2000 per adult.
But be they politicians, economists or scientists - all agree it's best to start contributing towards these bills now, than pay more in the future.