David Crichton FCII, Chartered Insurance Practitioner

Adaptation Scotland Conference, ‘Our Dynamic Earth’, Edinburgh. June 2011.

Parallel session: ‘Doing business & using infrastructure in a changing climate.’

Title: Five ways the Scottish Government could improve adaptation.

Introduction

Five ways in which the Scottish Government could enable better adaptation:

Stop Scottish subsidies for property developments in English flood plains.
Require insurers to pay for making Scottish properties more resilient.
Consider the consequences of a storm surge in the Firth of Forth.
Review planning policy SPP 20, the only such policy to have been produced without any public consultation.
Accept the Scottish Parliament’s recommendations for reservoir safety.

1.Financial Institutions: Flood insurance 1.

2013 will see three major deadlines:

Implementation of the Solvency II Directive for insurance companies,
expiry of the insurance industry commitment to provide flood insurance, and
publication of flood risk maps under the Flood Directive.

Each of these, combined with insurers’ concerns about climate change,couldpotentially make flood insurance much more expensive in some parts of the UK, especially in the low lying south east of England. A recent report by Glasgow University shows that rising insurance costs could lead to blight and a collapse in property values in flood hazard areas.[1]

At present, insurance costs for those in safe areas are subsidising the insurance premium for those in flood hazard zones to the tune of an estimated £200m a year.[2] There are now at least 40 significant ways in which the flood risk is lower in Scotland than in England.[3]Scotland no longer builds in flood plains (except in Moray) so why should it subsidise developers who build in English flood plains? Only 3.9 per cent of Scottish property is at risk compared with 23 per cent in England (5.2m) so Scots are paying a disproportionate share of the subsidy. The insurance industry is looking at various options to continue to subsidise flood risk households and thus in effect to subsidise developers in England where between 2000 and 2005, some 11% of all new houses were built in flood hazard zones. 90 per cent of the 120,000 planned houses in the Thames Gateway development are expected to be in high flood hazard zones.[4] For many, the favoured option is to establish a special scheme for high risk areas still subsidised by those living in low risk areas to enable more flood plain building. If Scotland can prevent giving such subsidies to England this might help to discourage flood plain building and help the UK to adapt to climate change.

There is an opportunity for the Scottish Government to stand up for Scotland and:

insist that insurerstake the 40 differences into account so premiums can be reduced, not increased.
propose a separate high risk flood insurance poolfor Scotland so that the benefits of any subsidies raised from premiums in safe areas of Scotland are reserved for the relatively small number (99,000) of Scottish properties at risk.
provide financial assistance to low income families in flood hazard areas for physical protection such as flood doors, tanking, and one way drainage valves to make it easier to afford insurance.

2. Financial Institutions: Flood insurance 2.

Unlike the rest of the UK, Scottish building standards already require some flood resilience, though more could be done. Scotland also has an excellent Planning Advice Note on the subject.[5]If these standards were to apply retrospectively after flood or storm damage, (as happens with fire insurance) insurers would have to pay for resilient reinstatement. This would reduce future flooding claims costs and disruption. The writer has discussed this idea with the senior managers of all the major insurers and they are all happy with the suggestion, so long as there is the level playing field of legislation. In this way, the insurance industry would fund the costs of adapting existing Scottish building stock for climate change in high flood risk areas at no cost to the taxpayer. Any increased premium from providing insurance on a resilient reinstatement basis could be balanced out by reductions in premium if insurers were put under pressure to take into account the 40 differences between England and Scotland. In the long term a more resilient housing stock should mean lower premiums.

3.Transport, distribution, and energy: – the Forth estuary.

Climate change is raising sea levels and in 1999 the North Sea experienced a record five metre high storm surge. If such a surge were to happen in the Firth of Forth, the coal fired power station at Longannet and the oil and gas depot at Grangemouth would be at risk of severe damage which could also lead to a pollution incident much worse than the two in 2007.[6]

Longannet is one of the biggest coal fired power stations in Europe,
Grangemouth refines 40 per cent of the UK’s oil supplies. A 48 hour strike there in April 2008 led to fuel chaos across Scotland and N. England.
A grocery supply hub on low lying land in Falkirk, supplies supermarkets across Scotland, N. England and N. Ireland.
14,000 people are at risk of flooding in Bo’ness.

A storm surge could mean shortages of electricity, gas, oil and food supplies. None of these sites are defended against flood and defending Grangemouth alone would require nearly 30 km of flood defences. Is there an alternative to enclosing the river with high walls on both sides?

All of the sites could be protected by a 9 km causeway across the Forth from Blackness to Charleston upstream of Rosyth (using the 4,350 tonnes of ash per day produced by Longannet) with a number of flood gates.[7] In this location, the biggest gates would only need to be 46 metres wide - enough to take Suez canal sized tankers bound for Grangemouth, but smaller gates could be provided to allow aquatic migration and river flow. The gates would normally be left open but in the event of a storm surge warning the gates could be closed as in the Thames Barrier to prevent flood damage. Bridges over the flood gates could be incorporated into the design, thus providing a low cost crossing for road and heavy rail. They would not need to be higher than the Kincardine Bridge as large vessels only go as far as Rosyth. The gates could also be used to contain pollution if there is another oil or sewage spill. They could even be closed on occasion and used with turbines to provide tidal hydro power if necessary. Such a causeway could in itself become a tourist attraction with a marina, restaurants and picnic areas in the centre of the river, helping to cover the costs of construction.

4.Education and training: – Architects.

If we are to have buildings and infrastructure adapted to climate change, the first step is to ensure that all new buildings take into account ecological issues, EU Directives, the need for energy saving, the need for resilience against flood or storms, the need for special measures in flood hazard areas, and the problems of indoor air quality and thermal comfort in a warmer climate. This would require the training and retraining of architects in these matters but the Scottish Government’s current planning policy on architecture signed by Malcolm Chisholm in 2005 incredibly makes no mention of any of them.[8] This policy, the only Scottish planning policy which was prepared and issued without any public consultation at all, not only ignores the key issues, it has only one token mention of climate change. This is unfortunate because under Scottish Law, architects are much more vulnerable than in England to legal action for compensation by building users or their insurers for negligently misrepresenting that the building is fit for purpose.[9]

Given Scotland’s legal system, Professional Indemnity insurance for architects may become prohibitively expensive in Scotland. Unless they can learn to adapt to climate change this could prevent many new construction projects from starting in Scotland.Architects hold the key to making buildings and infrastructure more resilient in the longer term, but most architecture schools in the UK still do not teach about adaptation. There is only one standard text book worldwide on the subject,[10] and while this is a best seller in the USA and elsewhere (there is an edition in Portuguese for Brazil[11]), it is virtually unknown in the UK and ignored by UKCIP and SCCIP.[12]

5.Energy: – Dams and reservoirs.

Hydropower contributes around 10 per cent to Scotland's total current energy generation from 74 large dams. There are 680 reservoirs in Scotland over 25,000 cubic metres in volume. Most are over 110 years old. Previous dam failures in Scotland have caused great loss of life.[13] According to a report from the UK Government, climate change will significantly increase the risk of dam failure.[14]

The biggest risk in Scotland is landslide, rock fall or peat slide into the reservoir causing sudden overtopping of the dam wall as in the Vaiont disaster in Italy which killed thousands of people. Scottish geology and widespread peat coverage[15] means we are particularly vulnerable to this risk yet it is rarely (if ever) considered in safety inspections. Scotland’s newest reservoir was closed within months of opening due to a rock fall. Scotland is about to start publishing previously secret maps showing the areas at risk from dam failure. Many thousands of people live and work in these danger zones. The danger zones of just two reservoirs include the homes of over 60,000 people, for example. In view of this, the Scottish Parliament made the following recommendations in 2011 for the new Reservoirs (Scotland) Bill. [16]

Landslide risk should in future be taken into account in safety inspections;
Planners must stop allowing new building in danger zones;
Public liability insurance must be made compulsory for reservoir owners in Scotland to prevent insurance blight from the publication of inundation maps.

None of these recommendations have been accepted by the Scottish Government and no such provisions appear in the new Act.[17] When the danger zone maps are published (probably later this year) this may have repercussions for those living in such areas, where affordable flood insurance may become unavailable overnight, leading to local blight and loss of property values. Public liability insurance is readily available for Scottish reservoir owners and as well as preventing blight, would have ensured that global insurance and reinsurance risk management expertise, access to state of the art PS InSAR satellite remote sensing technology, and independent expert safety surveys including landslip and peat slide risks would have significantly reduced the risks currently faced at no cost to the taxpayer.

[1]Pryce, Gwilym , Chen, Yu and Galster, George(2011) 'The Impact of Floods on House Prices: An Imperfect Information Approach with Myopia and Amnesia', Housing Studies, 26: 2, 259 — 279.

[2] Estimated by Crichton, based on confidential industry sources, June 2011.

[3] Crichton, D, 2011. “Flood Risk Management North and South.” Web only publication on

[4] House of Commons Communities and Local Government Committee November 2006. “Planning Gain Supplement”. The Stationery Office, London HC 1024.

[5] ‘Planning and Building Standards Advice on Flooding’, Planning Advice Note (PAN) 69. Scottish Government, Edinburgh.

[6] Over the weekend of 21/23 April 2007, 100m litres of untreated sewage escaped into the Forth estuary from the Seafield Wastewater treatment plant in Edinburgh when one of the pumps failed. The spill was only two miles from Portobello beach and the plant deals with the waste from 800,000 people. On Monday, July 2nd 2007, an oil slick was spotted spread across several square kilometres of the Forth near the road and rail bridges and was clearly visible from the air. An estimated 200 cubic metres of oil was washed up on the foreshore between Longannet and South Queensferry. The leak was due to a petrochemical plant at Grangemouth. Their system for coping with storm water failed during heavy rainfall.

[7] Crichton, D. June 2007. “Forth Causeway?” pp 51-52 Scottish Planning and Environmental Law Vol. 121. ISSN 1350 2808 IDOX plc, Glasgow.

[8] 2005. “Scottish Planning Policy SPP 20 Role of Architecture and Design Scotland” Scottish Executive, Edinburgh ISSN 1741 1203 February 2005

[9] Under the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 s101(1).

[10] Roaf, S. Crichton, D., and Nicol, F. , 2009. “Adapting Buildings and Cities for Climate Change.” (Second edition) 384pp. Architectural Press, Oxford. ISBN 978 1 85617 720 7

[11]Roaf, S. Crichton, D and Nicol, F. (2009) “A Adaptacao e Cidades as Mudancas Climaticas. Um guia de sobrevivencia para o seculo XXI.” 384pp. (Brazilian Portuguese). Bookman, Sao Paulo. ISBN 978 85 7780 443 6.

[12] This is ironic, given that the book was published in Oxford (where UKCIP is based) and the lead author, Professor Roaf, works in Heriot Watt University, just across the road from SCCIP offices.

[13] Whinhill, Greenock, Inverclyde. Failed in 1815 with 38 deaths. Rebuilt 1821, failed again 1835. Glanderston, Renfrewshire, failed in 1842 with 8 deaths.

Skelmorlie, N. Ayrshire, failed in 1925 with five deaths.

[14]“Climate Change Impacts on the Safety of British Reservoirs.” Babtie Group and the Centre for Ecology and Hydrology, for the Department for Environment, Food and Rural Affairs, 2002

[15] 10 per cent of the world’s peat coverage is in the British Isles, and much of it is in Scotland.

[16]“Stage 1 of the Reservoirs (Scotland) Bill.” First Report, 2011 (Session 3). Rural Affairs and Environment Committee of the Scottish Parliament, Jan. 2011.

[17] Crichton, D, 2011. “The Reservoirs (Scotland) Bill.” Scottish Planning and Environmental Law Journal, SPEL vol 144 pp 31-33, Glasgow.