Climate Change, Tourism & the National Adaption Plan

The draft National Adaptation Plan (NAP) for climate change is now out for consultation. The deadline for providing feedback is 3 June and so by the time you read this, the deadline will probably have passed. But as I have been working through the NAP and writing my submission, I have been considering the implications of the plan for the tourism sector of New Zealand. Here are some of my thoughts:

Physical risk: Many of New Zealand’s tourism activities are adventure-based and, as such, tend to be located in more remote parts of New Zealand (e.g., out in the mountains), which are often places more exposed to physical climate risk – think flash floods, landslips, increased frequency and severity of storms, exposure to extreme heat or cold. As a tourism service provider, you may want to consider looking at the physical assets that your business owns and operates, consider where they are located, and what sorts of physical climate risks they may be exposed to. This should include the infrastructure that you rely on for your business to operate – what happens if an extreme flash flood washes out the road 2 km down the road from you and tourists can no longer access your site? While this sort of assessment is a lot more difficult than it sounds, there are a growing number of businesses out there (including some cowboys, so be careful) who are establishing themselves to assess physical climate risk.

It may also be that the natural environment or cultural heritage that is the drawcard for your operation is at risk from climate change – if you’re a ski field operator, how are you planning to adapt to expected massive reductions in wintertime snow coverage? The Ministry for the Environment has identified land-based primary industries, fisheries and aquaculture, and tourism are the most exposed industries as they depend on climate-sensitive natural resources.

Your first thought may be that, should something untoward occur, your insurance policy will cover the costs – that’s what insurance is for anyway isn’t it? But if the frequency or severity of events that cause damage to your infrastructure continue to increase, either insurance premiums will rise and at some point simply become unaffordable, or insurance companies may deem your operation to be too at risk to be insurable – so-called ‘insurance retreat’.

It might be worth thinking, therefore, how best to adapt to present and future changes in climate that pose a physical risk to your business. That’s not an easy exercise and exactly how to do that needs to be tackled on a case-by-case basis.

Reputational risk: ‘Climate guilt’ remains a huge threat when it comes to international tourism. People, especially in Europe, are finding it increasingly difficult to justify the carbon cost of flying to New Zealand for a holiday. However, once here, they will be looking to minimise their carbon footprint. If you’re not seen to be doing whatever you can, as a tourism service provider, to minimise the carbon footprint of your operation, this is likely to pose a significant reputational risk to your business with tourists choosing alternative providers.

Transition risk: If your operations have components that are fossil-fuel intensive, there will be a strong expectation that you will transition these to a carbon-zero alternative in the years to come. But what if there are no carbon-zero alternatives? Consider, as an example, jetboat operators. Jetboating is most definitely a carbon-intensive activity as, as far as I am aware, the fuel used by jetboats is 100% fossil fuel derived. While there are promising products entering the market, such as the small battery-powered jetboats that are being manufactured and sold by a highly innovative New Zealand company called ZeroJet, battery-powered jetboats of the size used by most jetboat operators in New Zealand are currently unavailable. That poses a transition risk for jetboat operators and begs the question of what plans can be implemented to adapt to that risk. Can biofuel alternatives to current jetboat fuel be sourced? Will the development of sustainable aviation fuels provide a solution to jetboat operators?

Legal liability risk: Until recently, damages or injury resulting from extreme weather events, for legal liability purposes, were often considered to be “Acts of God”, unless there were clear opportunities to identify and avoid those damages and injuries that were not acted on. However, as climate science advances, and as climate risks in the form of extreme weather events become better identified, the legal liability pendulum is swinging away from blaming God, and towards laying that liability at the feet of people who, with access to this new information, should have done more to mitigate that risk.

There is a whole area of climate science now dedicated to the determination of the fraction of attributable risk (FAR) for specific extreme weather events. In the past, shortly after some extreme weather event, you would often see a reporter on TV asking a climate scientist “Was this event caused by climate change?”. The scientist, doing their best to avoid making eye contact, would mumble something like “Well no single event can be unambiguously attributed to climate change but under climate change these sorts of events are likely to become more frequent and severe…”. But climate science has made tremendous progress in the last few years such that we now have the tools required to estimate the FAR for specific events. We can now make statements such as “This event was 60% more severe because of climate change” meaning that, if we’re going to be dividing the blame/responsibility for the impacts of that event between God and humanity, it would be around 62.5% to God and 37.5% to humanity (since we’re responsible for those changes in climate). So, 37.5% of the damages now need to be covered by ‘humanity’. But by who exactly?

I think that the legal liability fallout from the Whakaari/White Island tragedy has demonstrated that when it comes to events that may have previously been considered “Acts of God”, it now becomes increasingly likely that God will no longer be the only one on the hook for the resultant damages, injuries, or fatalities. So, if there is a demonstrated risk related to your operations as a tourism service provider, and if that risk is likely to be amplified by climate change, and you have done nothing to adapt to that risk, this may well pose a legal liability risk to your business.

A few other points from the NAP

There is a work programme identified in the NAP titled “Deliver the Tourism Industry Transformation Plan (ITP)” that runs from 2022 to 2025, under the auspices of MBIE. The stated goal of the work programme is “regenerative tourism” and seeks to provide the opportunity for a sector-wide assessment of risks and potential actions.

Also, good to see a work programme titled “Meeting the costs of a climate-resilient tourism sector” so if you’re wondering how you are going to adapt your operation to the challenges of climate change, help may be at hand through this work programme.

The second focus area for the NAP is “Provide data, information, tools and guidance to enable everyone to assess and reduce their own climate risks”. I thought that this was particularly interesting. Clearly, the government is looking to individuals to assess and reduce their own climate risks – these risks will not be ‘nationalised’.

I imagine that the Resource Management Act 1991 (RMA) has posed some challenges for establishing tourism businesses in New Zealand. This act is now being repealed and being replaced by:

1.   The Natural and Built Environments Act
2.   The Strategic Planning Act
3.   The Climate Adaptation Act

The implications of this new legislation for tourism activities in New Zealand is something to keep an eye on – the fact that there is a whole 6-year work programme, titled “Manage potential impacts of adaptation related to regulatory change”, under the auspices of MBIE, suggests that this new legislation may have wide-ranging impacts.

The NAP is not all about adapting to risks. There are also some opportunities here. There is a work programme identified as “Integrate nature-based solutions into the urban environment” that I think many tourism service providers could take advantage of.

I recommend reading the NAP online to learn more about possible things to come. As always, please feel free to email me (greg@bodekerscientific.com) to share your thoughts and let me know if you would like me to write about any part of the NAP in particular.