The Ministry for the Environment commissioned an Independent Reference Group (IRG) [1] to support further policy development for a climate adaptation framework. The IRG was established to test policy ideas and explore challenges within the current system experienced by sectors directly impacted by climate change, including local government, Treaty partners, banking, and insurance. 

The IRG’s report [2] builds on previous policy work completed and advocates for a clear and consistent approach to adaptation that provides fair warning to New Zealanders about the way natural hazards impact them. 

We summarise the key policy recommendations below. 

New Zealanders need ‘fair warning’ about the way natural hazards impact them 

Aligned with the recommendations of the Finance and Expenditure Select Committee (FEC) inquiry, the IRG has emphasised the importance of providing New Zealanders with easy access to risk information, so they can make well informed decisions that align with their own risk appetite. The IRG notes that there are opportunities for the public and private sector to reduce future costs when risks are understood early, allowing people to plan for and mitigate risks. 

A ‘beneficiary pays’ approach has been preferred to other cost sharing arrangements 

The IRG explored different approaches to cost sharing arrangements for adaptation and recommended a ‘beneficiary pays’ approach to fund the increased investment in risk reduction from climate change. This would require those that benefit the most from an investment to mitigate climate change effects, to contribute the most to that mitigation. It was proposed that central government should contribute where investment will protect Crown assets, or where broader national benefits can be realised.

People and markets should adjust over time to a changing climate 

People will also be incentivised to take responsibility for their own risk exposure, by being well informed by the technical data. Property values, insurance premiums, and mortgages should reflect the changing level of risk over time, and people should be allowed to make their own decisions on whether they should retreat or stay within a high-risk area, provided there is no risk to life. Central government’s role should be limited to supporting those facing hardship to recover, and people should not expect property buyouts in the long-term. 

A 20-year transitional period has been recommended 

As New Zealand moves to a model of shared costs, and reduced fiscal liability, the IRG has proposed a 20-year transition period to appropriately balance the need to spread costs whilst creating incentives for individual action. The first three - five years of the transitional period will focus on establishing new systems and processes, followed by the preparation of adaptation plans starting with the highest-risk areas. This would see the new adaptation approach fully in place by 2045. 

IRG’s recommendations may influence policy on climate adaptation 

Although the IRG recommendations are not government policy, they may be influential in shaping the policy direction for our new climate adaptation system. 

Furthermore, although no formal announcement has been made, Minister Simon Watts has stated that adaptation policies remain under development and the Government are aiming to introduce a Climate Adaptation Bill by the end of the year. 

If you’d like to learn more about climate adaptation and how to prepare for what’s next, please reach out to one of our climate change and planning experts.

Footnotes

[1] Matt Whineray (Chair) – former chief executive of Guardians of New Zealand Superannuation; Maraama Royal - chair of Ngāti Whātua Ōrākei Trust; Belinda Storey – economist and expert on pricing physical climate risk; Malcolm Alexander – partner at Yule Alexander Limited and former chief executive of Local Government New Zealand; Jimmy Higgins – chief executive of Suncorp New Zealand; Aileen Lawrie – chief executive of Thames Coromandel District Council; Rebekah Cain – chief sustainability officer at Bank of New Zealand.

[2] Independent Reference Group on Climate Adaptation. A proposed approach for New Zealand’s adaptation framework (July 2025). 

This article was co-authered by Imogene Jones from our environment team.