Climate adaptation: principles to navigate uncertainty
New Zealand is grappling with the aftermath of two natural disasters, the Auckland Anniversary Flood and Cyclone Gabrielle. As the country assesses the damage and plans for the future, debate is intensifying on the most effective strategies for climate change adaptation, says Dr Anthony Hume, sustainability and resilience practice leader for AECOM New Zealand.
The complexity, scale, and substantial costs associated with climate adaptation efforts have sparked lively discussion, particularly on the role of businesses in adapting to climate change. 2024 will mark the first time private organisations will submit their first adaptation action reports for the financial year to Aotearoa New Zealand’s External Reporting Board (XRB) Standards. Local authorities are now putting their heads together with business leaders on how best to approach the uncertainty of climate change. With local governments and many organisations developing these plans, there are concerns that the resulting climate projections may lead to over-engineered, expensive solutions that may lead to increased costs for consumers through rates and tax hikes and more expensive products and services.
Navigating uncertainty
In Auckland, there has been much discussion about Auckland Council’s decision to incorporate a worst-case climate scenario as a “baseline” for their stormwater code. This approach is perfectly understandable, given the impact of recent flooding and climate change in New Zealand. The scenario will include widespread climate risks, including increased floods, storminess, bushfires, inundation of coastal areas, and higher winds that damage infrastructure, but will not include specific climate mitigation targets that limit greenhouse gas emissions from fossil fuel use.
Local authorities now join proactive business leaders in exploring how best to embrace, understand, and navigate the uncertainty of climate change. For the infrastructure and engineering sectors, it’s easy to understand the desire to have a single standard for engineering and design, like the Auckland Stormwater Code. Like most modern business sectors, we want to minimise uncertainty. However, uncertainty in climate projections will not be rapidly resolved, and in the meantime, adaptation choices must be managed with a thoughtful and practical approach.
AECOM has delivered climate-resilience projects across Australia and New Zealand. Here, we share key considerations to understand better the risks and opportunities presented by climate change scenario planning.
Global vs local
The worst-case scenarios provide multiple global averages for temperature change for consideration. Local knowledge and context must be applied to understand the most suitable adaptation response.
Timing alignment
In terms of climate projections, there is limited divergence between the scenarios before the mid-century. After 2050, the differences in the scenarios become more marked, so selection should be based on asset life and business decision making.
Criticality of services
A risk-based approach is a common way to help manage the uncertainty between scenarios. Applying higher standards to assets or locations of higher criticality to reflect the risk tolerance of those assets being disrupted helps prioritise investment decisions.
Adaptability and flexibility
Avoid locking in a decision that leads to an inflexible pathway. If you adopt a scenario today that later is determined to have underplayed impacts, it becomes more expensive to undo that decision. Considering adaptability and flexibility may highlight more cost-effective adaptation responses by reducing over-engineering. However, we must resist the temptation to rush to replace or update assets ‘like for like’ and consider what the ‘like for right’ option is that offers a similar service given a change in climate. In some cases, a ‘like for like’ approach may be the costlier over-engineered solution.
Stress testing
To provide a balanced response, sensitivity testing should be undertaken, especially for periods after 2050. Stress testing requires considering two or more scenarios because these are climate projections, not near-term forecasts. Regulatory standards like the NZ XRB standards and voluntary methods such as those recommended by the Task Force on Climate-related Financial Disclosures require users to consider their resilience against more than one climate scenario. Skilful use of climate projection scenarios does not necessarily lead to gold-plating infrastructure solutions. In practical terms, there may not be an actual difference in the adaptation response between the scenarios for climate variables affecting a particular asset or set of assets. So, you’re better off being more risk-averse if little material difference exists in the climate adaptation response required.