Flood damage in Wales costs an average of £70m a year and spending on defences has doubled in the last eight years.
Ms Davidson said there would be a 20% rise in flooding risk
But now the Welsh Assembly Government is working on a new strategy which involves working with nature rather than against it.
This may involve some areas being flooded in order to protect other communities.
Environment Minister Jane Davidson has ordered a fresh look at policy in the wake of flooding this summer.
She has ordered a three-year programme to refresh flooding policy, with the aim of developing a new strategy which involves "working with nature, rather than against it".
"The trigger for it was having the latest evidence which suggests that within the next 100 years sea levels will rise by 1 metre and there will be a 20% increase in flooding risk," she tells BBC Wales' Eye on Wales programme.
She said that one solution would be to look to countries like Malaysia as an example and use playing fields as storage ponds in the event of flooding.
"When we see over the last few years that we're already seeing small increases in flooding risk - every single one of those is a devastation for the community and individual involved," she added.
But she warned: "If we're going to have the kind of sea-level rise that is predicted, we will not be able to build walls high enough to tackle those issues effectively.
"So what we have to do is use the land to our advantage. And it might mean sometimes that we have to allow some areas to flood in order to ensure that bigger communities further down a river don't flood."
Roger Falconer, professor of water management at Cardiff University, said Wales has much to learn in the area of flood risk management.
He said Wales could look to the example of tropical countries like Malaysia where massive, localised storms are common and they have been managing floods for decades, if not centuries.
Prof Falconer said: "They have large areas of playing fields, for example, which are converted into storage ponds so that when the flood comes the water goes into the storage pond."
He said the sample principle could be adapted in Wales.
"If you look at the playing fields along the Taff in Cardiff, we could actually create embankments around those at a relatively low cost to turn those into flood management facilities and absorb quite a lot of the flow coming down the river."
However, Dafydd Jarrett, a policy advisor for the National Farmers Union (NFU) Cymru, said the prospect of a move towards flood risk management could be of concern.
Eye on Wales is broadcast at 1830 BST on Monday on BBC Radio Wales