New Zealand's sagging infrastructure is harming the economy with problems exacerbated by the impact of climate change, say commercial lawyers Chapman Tripp.
The firm is also pushing for a new authority to open up more land for housing and global funds to back big infrastructure projects.
Quality of life from gridlock, lost production, unaffordable housing, and environmental degradation was being hit and current financing models were not equal to the task, Chapman Tripp says in the wide-ranging report.
"Climate change is creating a huge need for new infrastructure – both because of the displacement effects of rising seas and more extreme weather events and because of the impending impact of carbon pricing on economic activity. Businesses should be escalating their climate change response capability now."
The report, What next for infrastructure?, outlines the case for more private financing to break the infrastructure funding deadlock.
It says there is a "wave of global capital looking for a home" at the same time there was an infrastructure deficit estimated at US$21 trillion ($32 trillion) around the world.
Institutional investors worldwide were now managing more than US$100 trillion and pension funds in particular are seeking safe asset classes that deliver stable long-term returns. Infrastructure investments fitted neatly into this profile, the report says.
New Zealand could draw on a large body of international research and best-practice examples in developing transaction structures that enable enhanced coordination and rational risk allocation.
What was required was a coordinated approach to create a solid pipeline of work, and financing tools to attract private sector investment.
"The need for solutions is becoming more urgent as the meteorological effects of climate change begin to bite and the emissions-reduction strategy, based around an effective carbon price, shifts up a gear," Chapman Tripp said.
Alana Lampitt, a senior associate specialising in environment, planning and resource management law, said big storms that caused damage were the headline grabbing symptoms of climate change but there were longer term infrastructure demands that needed investment.
New energy sources for primary industry processing and reliable electric vehicle charging networks needed new infrastructure, she said.
The report says there is a housing shortfall of 70,000 nationwide and 45,000 in Auckland.
"On the regulatory front, we have the proposed Urban Development Authority [UDA], which we expect will have the ability to agglomerate land for residential subdivisions, including a power of compulsory acquisition," the report said.
This takes up on a recommendation of the Productivity Commission, which the National Government had adopted.
"It is unclear whether Labour's proposal will be based on the Productivity Commission's work. The minister [Environment Minister David Parker] has indicated a general intention to reinstate appeal rights to provide for public participation in the Resource Management Act matters but that might slow down the ability to respond to the housing crisis," the report says.
Infrastructure projects took time and the construction sector had severe capacity constraints after a period of "extraordinary carnage" that took out most of the biggest players from the vertical construction market.
"This will provide a growth opportunity for second-tier firms. The development of a solid project pipeline, offering enough work to support a long-term presence in New Zealand, should attract overseas contractors and underpin local investment."