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Contest of Environmental Policy Ideas Welcome

Please find attached an article that appeared in the Otago Daily Times today, 20 October 2006.

Contest of Environmental Policy Ideas Welcome

A fortnight ago, the National Party released a discussion paper on the environment. It is a welcome initiative. There is great scope for better environmental policies in New Zealand.

Green Party spokesman Nandor Tanczos issued a somewhat patronising statement in response, saying National has “a lot of catching up to do”. Yet the Greens have no monopoly on good environmental policy.

For a start, they are behind environmentalists in many other countries who recognise that economic growth and environmental improvement usually go hand in hand. Higher incomes and better technology mean greater resources to devote to environmental protection.

Greens elsewhere are abandoning heavily interventionist approaches to environmental problems in favour of more reliance on market mechanisms. Many have dropped earlier anti-car attitudes that still dominate Green Party thinking in New Zealand.

Greens here have been on the wrong side of many environmental debates, or missing in action.

For example, they were not behind the establishment of the market-based ITQ system for fisheries management, although they now promote it internationally.

They have not been notable defenders of property rights, which are the key to much environmental management. They supported the government in closing down Timberlands on the West Coast, a lose-lose outcome on both economic and environmental grounds.

They have resisted the ‘proceed with caution’approach to GM, a technology that offers many environmental benefits.

National’s general approach is more enlightened, although it has weaknesses. Mr Tanczos may have a point when he says it is light on farming issues such as water contamination and methane emissions. Studies have found that reducing emissions from agriculture is one of the lower-cost strategies New Zealand could adopt if action were warranted.

On climate change, National may be at risk of repeating its 1990s mistake of being over-enthusiastic about signing up to Kyoto. Major players such as the United States, China and India are unlikely to take drastic action against emissions any time soon.

National favours an approach to curbing omissions based on a tradable permits regime, starting with electricity generation. But it is wrong to think such a regime has obvious advantages over an approach based on carbon taxes (which National opposed), coupled with subsidies for sinks.

There is no sign that National has carried out any analysis of the costs and benefits of such an approach. A rough calculation suggests that to have the same overall impact on emissions as a broad-based carbon tax in the range previously contemplated by the government, a tradable permits regime for electricity generation would require at least a doubling or even trebling of electricity prices. The benefits of such a regime, in terms of reduced global emissions, would be close to zero.

In this situation it seems unlikely that the proposal would be politically sustainable; it would certainly be very damaging economically.

On the Resource Management Act, National went into the last election promoting a number of specific changes to be followed by a fundamental review, but the review element seems to have disappeared. This is unfortunate. Among other things, tinkering with the RMA won’t solve the problem of the hopelessly fuzzy concepts which are at its heart, such as sustainable management, intrinsic values, Treaty principles, kaitiakitanga and even the definition of the environment, as National’s paper recognises in part.

In discussing public access to private land, National sensibly argues that “compensation to landowners should be available where property rights are significantly affected.” But this principle should apply across the board, including to the RMA, for both economic and environmental reasons.

The paper advocates a bolder approach to water allocation based on tradable rights than is currently being pursued. This has merit. There is also much to be said for commercial operation and pricing of water supply, something the Greens resist. Metering and other measures have reduced water consumption in New York today to below 1979 levels, despite population growth of over a million in the city.

There are other good ideas in the paper. The criticism of ‘smart growth’ policies that restrict land supply and reduce housing affordability is amply justified. So too is the idea of charging non-residents for fishing licences, but why not for access to certain national parks also?

National proposes replacing the Ministry for the Environment by a Ministry for Sustainable Development. But ‘sustainability’ is a weasel word that no one can define. Why not focus simply on good environmental policy with a ministry of that name?

Nevertheless, the general non-socialist approach to environmental management, based on property rights, incentives, prices and market mechanisms, that runs through National’s document has much to commend it.

Socialist environmentalism, based on central planning, regulation and collective ownership, leading to the tragedy of the commons, has been as disastrous as socialist economics. The Greens would do well to catch up with National’s thinking and move in new directions.

Roger Kerr is the executive director of the New Zealand Business Roundtable


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