Sea levels and bank caution on coastal property

One of the more interesting of the dimensions of the climate change debate is the very large and clear divergence in reactions between business interests that are impacted negatively by carbon mitigation and those that are impacted negatively by doing nothing. Perhaps unsurprisingly, sectors in the former group tend to be skeptical, but those in the latter group are busy preparing.

If you live coastal, you might find yourself in the latter category sooner than you think. From Banking Day:

Insurers and banks are beginning to focus on the risks of rising sea levels for property values, New Zealand’s Parliamentary Commissioner for the Environment has warned ahead of the release of a detailed new report which will show which coastal property will be hit hardest.

Commissioner Jan Wright appeared before parliament’s Local Government and Environment select committee in Wellington on Thursday to discuss the Commission’s recent report ‘Changing climate and rising seas: Understanding the science’, which spelt out that a 30 cm rise in sea levels by 2050 was already ‘baked in’.

When she released that report late last year, Wright was already warning that banks had started taking an interest in the issue during the investigation.

“If you imagine now a thirty year mortgage on coastal property that is vulnerable, maybe you get to a point where the insurance is not renewable after a certain point,” she said at the time.

“When these events become a certain frequency, the insurance companies say: ‘No more’. And for the banks there may be the problem of negative equity.”

You can always stay where you are and read Terry McCrann.


  1. Oh, and…

    Twin severe storms a ‘first’ for Australia

    Australia’s northern coasts are being battered by two severe tropical cyclones on Friday, the first time meteorologists have seen twin storms of such intensity making near-simultaneous landfall.

    But its been a cool summer in Melbourne, so none of this matters.

      • A weather event that managed 4 magnitudes of power increase, in a 24 hour period, and has more than surprised those who’s day job it is to discern these events conservatively.

        Skippy…. feel free to search relent data bases for its parallel and whilst your at it bone up on what global temp increase actual denotes i.e. energy distribution and transmission.

      • and has more than surprised those who’s day job it is to discern these events conservatively.

        So like guessing economist? Hoocoodanode


        OMG Please inform Al Gore, Tim Flannery, Julia Gillard and Carbon Cate – they’ve all unwittingly bought waterfront property blind to looming catastrophe. Save them. From themselves.

      • So I was right last night, I you’re still crying and driving a 4WD

        Is there really any point in posting incoherent drivel 10,000 times a day? I suspect this was directed at me, but I have no idea what you’re on about.

      • Lorax, are you still reading that little twerp’s blatherings? Put the fix in: mig-filter

        Done! Awesome!

      • “Lorax, are you still reading that little twerp’s blatherings? Put the fix in: mig-filter”

        LOL. hahaha

        Advice of the day.

      • lol R2M and surely Mig can appreciate your software engineered solution.

        But yes, why not save yourself some rage and put 3d on there too?

      • Revert2Mean
        February 20, 2015 at 10:35 am

        Lorax, are you still reading that little twerp’s blatherings? Put the fix in: mig-filter

        God Bless you…

      • No filter for 3d1k. I rather like reading what s/he has to say. Don’t always agree, but don’t always disagree either.

        Besides, most of the time 3d1k’s post are timely, relevant, on topic and dare I say it, rather amusing.

        I find refined sense of humour in 3d1k – subtle and clever.

        This is unlike some other folks who write random and ranting posts with a frequency I find annoying.

        What is worse these posts are often used to insult other forum members (or rubbish their opinion) rather than adding any value to the debate. Boring and time wasting.

      • 3d, we’ve discussed this before, and pointed out to you that this is bullshit. Why are you raising it again?

        If nothing else, one must tip one’s hat to the ability of the minebot to stay on message, no matter how comprehensively refuted.

      • surely Mig can appreciate your software engineered solution.

        I WAS THE ONE WHO GAVE IT TO HIM! And after 2 years and when I cut his meat for him he’s now taking credit.

        You’re all geniuses….

      • I like to keep an eye on the corporate propaganda.

        HA!!! So I’m not Koch funded which means what I say is sincere and correct! Boom!

    • The IPCC reports that there will be low chance of increased cyclones as a result of climate warming… just saying…

      • Just to correct you:

        ► IPCC predicts fewer or the same number of hurricanes / cyclones
        ► IPCC predicts that those cyclones that do occur will be more severe.

        Average tropical cyclone maximum wind speed is likely to increase, although increases may not occur in all ocean basins. It is likely that the global frequency of tropical cyclones will either decrease or remain essentially unchanged.

      • Willy, that quote is from AR4. The IPCC’s Fifth Assessment Report (AR5) says:

        ► The AR5 recognizes clear trends in flood-causing factors like extreme rain and sea level rise, despite the fact that actual trends in flooding are confounded by infrastructure (such as flood-control projects) and land use change.
        ► The AR5 describes increases in droughts in specific regions, and suggests a connection to anthropogenic climate change.
        ► The AR5 confirms that North American large wildfires have significantly increased in frequency since the mid 1980s, and the wildfire season has lengthened. These trends are projected to continue.
        ► The AR5 recognizes that sea levels have risen, which contributes to the destructiveness of storms like Haiyan. It also recognizes increasing temperatures at both the sea surface and the deep ocean. These can contribute to cyclone intensity by making more energy available.

        And let me add that the ~4-7% increase in water vapour in the air because of AGW will definitely make rain storms, snow storms and cyclones much worse.

    • Skip, in the cyclone which killed 400 odd people a few years ago the storm surge was 13 plus meters.(43 feet)
      Hope you have plenty of freeboard.
      A 13m surge will drown Curtis Island. Just another way of going under water for them. WW

      • Another reason why my place is going on the market soon. I was evacuated before Yasi because I’m only 5m above high tide. On the south of Yasi they had 7m surges.

      • A 13m surge will drown Curtis Island. Just another way of going under water for them

        The way gas prices are going, one might imagine some goldplating of their policies could be going on.

    • LOL



    • “Lorax, are you still reading that little twerp’s blatherings? Put the fix in:”

      Thank you mate.
      Thank you thank you thank you.

  2. Insurers exposed to extreme weather events, such as MunichRe and SwissRe have accepted that climate change is highly certain and are working with their customers to mitigate consequences. Given they are in business to make money, and this activity costs them money, it is hard to attribute a cynical motive.

    • The Insurance Industry Sues Over Climate Inaction

      In May, Farmers Insurance Co. filed nine class-action lawsuits arguing that local governments in the Chicago area are aware that climate change is leading to heavier rainfall but are failing to prepare accordingly. In what could foreshadow a legal reckoning of who is liable for the costs of climate change, the class actions against nearly 200 Chicago-area communities look to place responsibility on municipalities, perhaps spurring them to take a more forward-looking approach in designing and engineering for a future made different by climate change.

      A recent report by the Government Accountability Office found that, if ignored, climate change and the resulting rise in severe weather will probably lead to significant increases in insured and uninsured financial losses.

      • What are you trying to say? MH17 has triggered many insurance payouts, including some contingent on it being an act of war.

        Indeed, one of Malaysian Airlines’ insurers is trying to say there was no war, so the war insurance policy shouldn’t be paid out.

      • They are crying to government, as well. They are planning to sue the Russian and Ukranian governments, using compensation paid by Libya over Pan Am flight 103 as a precedent.

      • And good luck that too! Panam had d^ck to do with Libya so all they’ll achieve is to unwind compensation already paid out!.

        Does no one read the papers? (not actually the papers of course)

      • Malaysian Airlines owners, insurers and their re-insurers don’t get compensation, so they don’t have anything to lose.

        In general they would have no reason to care about wars if 100% of casualties and asset losses were combatants. So ‘ending war’ probably doesn’t interest them that much. Keeping war within tightly confined areas, with everyone filing proper paperwork (the re-insurer trying to dodge the war insurance claim is using lack of a sufficiently formal declaration of war as an out) is more their thing.

        wrt AGW, the point was they are re-pricing the risk in locations they assess to be more exposed to climate change related perils. If no one else follows suit they’ll lose business in those locations – bad for them if climate change isn’t happening.

      • will probably lead to significant increases in insured and uninsured financial losses.

        Shouldn’t that be the insurers job?! To price the risk of losses?!

        WTF are you on about?

      • will probably lead to significant increases in insured and uninsured financial losses

        The obvious next step for an insurer who has had to pay is to find someone else to recover the money from. What every insurer does whenever they can – totally independent of pricing the risk.

      • They’re not exclusive. They do both. Once they’ve written a policy, they do everything they can to reduce the chance of a claim and otherwise transfer the risk. What else?

      • What else indeed!!!! Certainly not get out in front of problems, they like those as long as it’s costing you!

      • I’m totally unable to ascertain why you think he’s barking up the wrong tree. All we’ve established so far is that insurers are primarily motivated by profit, which never seemed to be contentious.

      • But said profit will be contingent on selling the right story, facts and thier shitty risk analysis be damaged! Right?

      • Huh?

        They have to get their risk pricing as ‘right’ as possible on the day they write the policy – no worse than their competitors, anyway -, based on the information they can obtain, otherwise they’ll either lose all their customers, or pay out their entire reserves before the policies expire.

        Sometimes they can find someone who was negligent or information was withheld, and use that to claw back losses. But that’s useless if they’re not in business – relying on loss mitigation (and ‘story telling’) to cover for poor pricing practice is a big part of what sank HIH.

      • Cough AIGFP? Like I said it’s a scam what does climate change have to do with anything other than a useful headline for insurance goons? Insurance is one of the evil industries out there and they’ve convinced every pension fund to load up because of the cash requirements. No moral hazards of course. Again, climate change has nothing to do with it, nor does look after peoples interest. Just their bonus…

      • From the bozos link:

        “Iowans have experienced just the sort of intense wind and rain storms, severe flooding, and extreme drought that are predicted to increase with future climate change

        So you get extreme drought during intense rain storms? WOW!

    • WHAT THE FRACK?!!!!



  3. If you want hypocrisy, look at the warmenising politicians and spokeliars like gillard and flannery, and their purchases of coastal properties.

  4. The climate skeptics should open up an insurance company for coastal properties. If their believe is correct that sea level isn’t rising, they will make billions!!

    • Someone will, just as people promoted non-differential pricing for smokers when the Surgeon’s General reports started coming out, and duly cornered the market, although their non-smoking customers abandoned them, with slightly unfortunate consequences.

    • Properties near sea level are at risk from storm surge and could also lose value when people start taking sea level rise and global warming seriously. You could see the price collapse on your “investment” long before the sea starts lapping at the front door. 😯

      • So… you’re answer is economics? Again?

        There you are BullionBaron, sage advice. When you see price collapsing based on herd mentality, buy buy buy, and wait a generation….

      • Storm surge risk is now being considered by buyers all up the QLD coast and today’s cyclone will only serve to increase the discounting. If my memory of cyclone history is right, QLD has seen three Cat 5 cyclones since 1918, and they were all in the past decade.

        I’m about to settle the sale of my IP in Cardwell. Since Yasi we’ve seen about 20% fall in prices in the town, despite it being the beneficiary of a $40m foreshore restoration project. Along with that, insurance costs went through the roof, making rentals a ridiculous proposition.

    • ErmingtonPlumbing

      Once the house in Ermington is paid off, I’m moving to the part of Sydney where I have always wanted to live, the Northern beaches, near all my favorite surf spots.

      Just to play it safe Mr Baron, I think I shop around the Beacon Hill area, should be guaranteed safe up there ………………..surely ?,_New_South_Wales#mediaviewer/File:Beacon_Hill_Summit.JPG

    • [email protected]

      Lake Eyre Bulli

    • “Gawd sum of the gramma and spelling hear is atroshius hey!”

      That’s what bothers you about this conversation?! The spelling and grammar?!

    • [email protected]

      grammars at bingo man

  5. If I was New Zealand, I would be more worried about Tsunami’s, earth quakes and volcanoes than the possibility of sea level rising. These are real and present dangers, that could easily destroy Auckland and Wellington especially and bankrupt the country – rather than something that is way, way off… with minimal impact in reality.

  6. As with many other areas on northern coast, much of Noosa is on a flood plain. Occasional wet feet not the problem. Insurance premia and degradation in certain property values the real risk.

  7. Dmitry Orlov says:

    The climate of Earth, our home planet, is, to put it as politely as possible, completely fucked. Now, there are quite a few people who think that radically altering the planet’s atmospheric and ocean chemistry and physics by burning just over half the fossilized hydrocarbons that could possibly be dug up using industrial methods means nothing, and that what we are observing is just natural climate variability. These people are morons.

    And I agree.

      • Mig, please stop. If you want to make a point do so without resorting to vague, rhetorical questions. If you want others to explain the science behind global warming research then ask proper questions instead.

      • What ever Jason I never get straight answers from you lot!

        The value of a theory is its predictive capacity, your predictions fail time and again. Why should anyone take you seriously?

      • Mig. Climatology, not unlike biology, relies on probabilistic models (heck even physics is ultimately probabilistic), and these models have many variables, measured and estimated, with varying resolution levels. More data means better variables and a better fit. In the end warming is still increasing, (this is accurately and unambiguously measured), the earth is retaining more heat every year (again unambiguously measured) and it has not paused. However since most of the heating is in the mid and deep ocean, sceptics and civs may believe there is none. So what is your specific question?

      • Specific Temperature and sea level targets with 80% confidence intervals for the next year. Can you do that?

      • Tell you what Jason why don’t you explain to me the exact mechanics behind how ice ages start and finish, you know before cars.

  8. A bunch of quasi intellects commenting on a fringe economic site amounts to nothing.

    For better or worse im sure we can all agree going forward that nuclear fission is the only way we humans can continue our quality of life into the next few hundred/thousand years.

    And yet what does Australia spend on nuclear science? And more precisely nuclear fission research? How much have we spent of seat warming climate scientist?

    Cut the crap, universities need to be funded and directed towards nuclear science and with a ultimate hope of cracking nuclear fission. And again I say free education specifically in this field for the intellectually gifted.

    We need progress and not prognosis!

    • No no no!!!

      We need to believe in a theory that can’t predict results! Because science!

      I mean, the flat earth theory is kind of ok for the limit of the horizon but even then not so much because as soon as it gets dark curvature is immanently deducible, but otherwise its prediction value is 0.0.

      So these flat-earthers are totally who we should listen to right?

    • And I’m not going to argue the “science” of climate change. This argument is the biggest distraction to the betterment of human kind. By this i mean it has increased funding to the science of modelling and retracted our minds from beneficial nuclear science.

      As I try to explain before climate scientist and their groupies are their own worst enemy. Calling for more resources to give a prognosis. Nuclear energy is the only way forward.

      • Tiny houses, less people, poorer. The future.

        this message is bought and paid for by Revert2Mean industries [as in not industry just making money]

      • “Nuclear energy is the only way forward.”

        I’m not necessarily opposed to nuclear energy, despite its obvious drawbacks, but the ridiculous NIMBY culture here would make it nearly impossible. I mean if people are afraid of wind turbines can you imagine the hysteria that would surround a nuclear power plant!

        Have we even found a permanent home for our existing nuclear waste yet?

      • He still sees a role for nuclear in less sunny climates, like the UK, but advocates smaller modular reactors – also favoured by ex Environment Minister Owen Paterson. Unfortunately so far these reactors exist only on the drawing board.
        The plain fact is that nuclear costs continue to rise, while those of renewables are plunging. With solar on the brink of grid parity in many countries, it won’t be long until the choice is clear as day.

        Clear as which day? Here Melbourne its been a long while between drinks…

      • As I try to explain before climate scientist and their groupies are their own worst enemy. Calling for more resources to give a prognosis.

        Huh ?

        They don’t want “more resources to give a prognosis”, they want more resources to *do something*.

        The prognosis was in decades ago and hasn’t changed in any meaningful way. Everything since then has just been political games from people who are worse off if forced to take responsibility for the consequences of their actions.

      • R2M

        According the BP, renewables combined surpassed nuclear in 2013 – in electricity generation:

        Renewable energy sources – in power generation as well as transport – continued to increase in 2013, reaching a record 2.7% of global energy consumption, up from 0.8% a decade ago. Renewable energy used in power generation grew by 16.3% and accounted for a record 5.3% of global power generation. China recorded the largest incremental growth in renewables, followed by the US, while growth in Europe’s leading players – Germany, Spain and Italy – was below average. Globally, wind energy (+20.7%) once again accounted for more than half of renewable power generation growth and solar power generation grew even more rapidly (+33%), but from a smaller base.

        A good overview for those seeking deeper understanding of global energy demands and dependencies – far more intricate and hugely trade important, than many may realise.

        Energy is everything 😉

      • Reading between the lines, BP has a message

        Coal consumption is growing at a healthy 3%, fastest of the fossils

        Elsewhere, and after global coal prices have fallen for two years in a row, coal is extending its competitive edge in power generation and the competitive balance has begun to shift. Coal was the fastest-growing fossil fuel, with China and India combined accounting for 88%
        of global growth, while natural gas consumption growth decelerated and grew at a below-average rate.

        And renewables have seen strong growth from low base, but possibly reaching subsidy constraints

        Renewables now account for more than 5% of global power output and nearly 3% of primary energy consumption. The challenge of sustaining expensive subsidy regimes, however, has become visible where penetration rates are highest, namely the below-average growth of Europe’s leading renewable producers, who are grappling with weak economic growth and strained budgets.

        I suspect this trend may continue…