Departments/Legal

By Lydia Sharpe, Solicitor, Hesketh Henry, Auckland

Climate change
and construction
With climate change certain to have wide-ranging impacts on the
construction industry, it is worth reflecting on what these impacts are
likely to be and to consider ways to avoid the worst of them.
CLIMATE CHANGE may be the big gest
existential threat the human race has faced.
While climate change will affect a wide
range of entities, it will have a particular
impact on the construction industry.

Hotter, drier and more severe storms

It is well known that climate change will
have significant long-lasting effects on global
weather patterns, and some may be irrevers-
ible. Scientists predict the global average
temperature will increase by 2.9°C to 3.4°C by
2100, compared to the pre-industrial period.
Summers are predicted to heat up by 3–4°C.
Regions that currently tend to be dry or arid
will likely experience a higher risk of drought,
while more-humid regions will have a higher
risk of heavy rain and floods.
Climate change also exacerbates the inten- lead to an increase in floods. Globally, the frequent and last longer, buildings that are
sity of severe weather, largely because of the consequences of sea-level rise are significant, not built to a standard that can adequately
increase in global temperatures. Warmer and it is our neighbours in the Pacific who regulate indoor temperature may adversely
temperatures mean more moisture in the air, will feel the greatest effects. This may lead affect occupants’ health.
causing increased rainfall during hurricanes. to displaced people seeking refuge as their Too hot for vulnerable residents and workers
Although the severity of individual storms low-lying islands are inundated. Heatwaves, like the one that caused Auckland’s
cannot be directly linked to climate change, it drought, can lead to soil shrinkage and subsid-
is clear that, overall, global warming is affecting Range of impacts on buildings ence, more rapid concrete deterioration and
our weather. In addition, climate change is Climate change will also likely affect physical internal overheating of buildings such as
causing a rise in global sea levels, which will infrastructure. As heatwaves become more traditionally constructed high-rise apartments.

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 Buildings not constructed to cope with
increasingly extreme weather conditions
– whether increased heat or increased
rainfall – may offer inadequate protection
to vulnerable inhabitants. Those who are
particularly vulnerable to heat-related illness
and death include the elderly and those with
underlying health conditions.
Where construction crews are expected
to work in increasingly hot conditions, work
may need to progress slower than was once
normal to avoid workers experiencing heat
stroke and dehydration. This may cause
delays to construction timetables and
attendant increase in costs.
Buildings may need to change
More severe and frequent cyclones or hurri-
canes will also affect construction work.
Buildings hit by these more frequent storms
are likely to suffer more damage, more often
than from previous storms. This could lead to
increased costs to repair and enhanced perfor-
mance requirements to resist multiple severe
storms. Further, the increased frequency of
floods will have a deleterious effect on build-
ings constructed on low-lying ground.
To mitigate these effects, future buildings
may need to be constructed to withstand
different weather conditions than they are
currently constructed for, such as higher wind
strength, higher average temperatures and
increased rainfall or floods. This will affect the
types of materials and building methods used.
Implications for contracts and insurance
Climate change will also affect risk and
liability under construction contracts and
related insurance products. Bad weather can
cause delays to construction projects if the
weather means it is unsafe to continue work
and the project cannot be reprogrammed
to mitigate.
Claims for extension of time
Delays, especially if they affect critical path
items, can lead to increased expenses,
particularly for contractors. To mitigate their
loss and avoid the imposition of liquidated
damages, contractors often submit claims for
extension of time.
Weather is specified as grounds for an
extension of time under several New Zealand
contracts, such as NZS 3910:2013, NZS
3915:2005 and NZS 3916:2013. However, it is
not clear whether delays caused by weather
exacerbated by climate change can be the
subject of a claim for an extension of time.
Hard to quantify weather delays
It is also unclear how weather-related delays
should be quantified. The standard approach,
from Diploma Constructions Pty Ltd v Rhodgkin
Pty Ltd (1990) quantified weather-related
delays by referring to the number of wet days
calculated according to Bureau of Meteorology
records, contrasted with the average and
above-average number of wet days per month
in respect of the number of days claimed.
This considered not the actual effects of the
weather on the works but the objective versus
average number of wet days per month. It
may not be the best test to apply – considering
average wet days per month means parties risk
losing focus on the facts of their particular case.
Further, as climate change progresses, this
approach may be unsuitable, as it will not
capture the increased number of wet weather
days due to climate change. Eventually,
comparing actual wet weather days to average
wet weather days may no longer provide a
meaningful metric.
Insurance may be hard to get
Climate change will likely increase premiums
on property and contract works insurance.
As severe weather or floods become more
common, insurers may withdraw coverage
from these risks or from construction in
affected regions. This may make it harder for
home developers and contractors to obtain
and afford these insurances.
Counter measures
Looking forward, climate change will likely
require significant developments in the
construction space. It is currently difficult to
tell precisely what these developments will
be, but the following are some possibilities.
Environmentally friendly products
Consumers will demand more eco-friendly
products. One example of this is concrete,
which releases significant amounts of carbon
dioxide into the atmosphere during produc-
tion. Overseas, companies are seeing a gap in
the market for less-carbon-intensive options,
including pozzolans and other natural
concrete alternatives. Pozzolans are silicate-
based materials that react with the calcium
hydroxide generated by hydrating cement
to form additional cementitious materials.
These products are often inexpensive and
environmentally friendly, and the produc-
tion process for pozzolans avoids the release
of greenhouse gases commonly emitted
during cement production. Responding to
customer demand, a likely growth area for the
construction industry lies in developing more
eco-friendly building products and methods.
Government actions
As new, environmentally friendly building prod-
ucts and methods are developed, the regulatory
and legal regime will also need to adjust. It is
likely MBIE will, over time, make significant
changes to the Building Code to address these
new building products and methods.
Although this might be done through
the Building Code update programme, it is
likely that more extensive legislative reform
will be needed. MBIE’s latest consultation
programme, Building for climate change, is
worth watching.
On a larger scale, governments must continue
to pursue science-based adaptation and miti-
gation efforts to tackle climate change more
broadly. This should include consultation with
the construction industry as a key stakeholder.
Act now to limit damage
Realistically, it is too early to forecast with any
certainty the long-term future for the construc-
tion industry in dealing with the impacts of
climate change.
While it will need to be highly responsive to
events as they arise, we still have a chance to
avert the worst effects. The opportunity for real
innovation should be seized.
Note This article is adapted from Lydia
Sharpe’s essay originally published by the New
Zealand Society of Construction Law in respect of
the Society’s Essay Prize Competition.
Build 181 — December 2020/January 2021 — 89