Environment FAQ's

Environment FAQ's

1. What would be the impact on our economy and exports?

Answer

OECD research has found that environmental regulation, when done well, doesn’t have to come at the expense of growth. There are a number of reasons why this is the case. For starters, our natural environment is an asset to the country – not only for tourism, but also for our brand and in attracting talent. For that reason it makes economic sense to protect and enhance that asset. Secondly, environmental limits should deter efforts in increasing volume and shift them toward adding value.

It’s a matter of making those constraints be revealed to business decision-makers so they react. Thirdly, smart environmental regulation normally impacts on poorly performing businesses, improving productivity overall. There is nothing wrong with poor performing businesses closing, in fact it is a part of a healthy economy. Finally, regulation can become a source of competitive advantage in the long term as new, environment protecting or enhancing businesses and industries are created.

The OECD also recommends wider use of environmental taxes as a way to reduce income taxes and invest more in restoring the environment. Environmental taxes are relatively low in New Zealand.

TOP would ensure any revenue from corrective taxes was used to reduce income tax, restore the environment and to help industry transition from being free-loaders on pollution, to being pollution-free. 

2. What is the cost of this policy?

Answer

The Government wasn’t able to provide a costing of its Fresh Water policy as these issues are so contextual to different regions. TOP’s goal is swimmable rivers, but if any local community decides the costs are too high they can deliver specific instructions to their councils to forgo that objective.

Let’s remember that in any discussion about growth and costs the environment needs to be included. TOP’s goal is true progress; growth that makes us all better off and doesn’t come at the expense of the environment. Overseas experience shows that with smart regulation we can keep growth the same and maintain our environment. So if all true costs are included, this policy is less costly than the status quo. 

3. What about towns and cities, don’t they pollute too?

Answer

For sure, but it’s a question of extent. Around 1% of our waterways run through urban areas, compared to almost half in pasture. Agriculture is our biggest problem area, but certainly not the only area where progress must be made. Our policy is neutral in terms of which sectors have to adjust the most. All polluters have to pay for that “privilege” and over time that cost will become prohibitive to ensure behavioural change happens.

4. Will I be charged for drinking water?

Answer

No, access to quality water for citizens will remain a human right. Of course councils will charge as they do now for the reticulation.

5. If we can’t increase the volume of our land exports, how will we continue to grow and earn export revenue?

Answer

The alternative is pursuit of a price premium for the land-based products we produce. New Zealand’s mantra has always been ‘naturally’ produced products. In a world of processed food, natural products attract a price premium. New Zealand’s agricultural industries need to invest more downstream or off-farm to boost the consumer value of our natural products. Increasing volume is still possible of course, so long as it’s not at the cost of freeloading on our natural environment by pollution.

6. Will electricity generators have to pay for the water they use also?

Answer

Yes, these businesses change flow rates in rivers and in so doing they can impart ecological damage. To be consistent with the principle of polluter pays, there will need to be an annual charge to these businesses. Given the low cost of hydro power, this will not impact on power prices. 

7. Isn’t the quest for infinite growth ultimately self-defeating?

Answer

Not at all. Economic growth refers generally to lifts in income. Income generation is not necessarily synonymous with resource depletion. The challenge we face is one of rebalancing away from income generation from ecological resource depleting activities to those that are either neutral or environmentally enhancing. For instance tourism that funds investment in our natural capital could actually be resource-enhancing; renewable energy usage is resource-neutral. TOP’s approach is about smart growth, not no growth. 

8. Why can’t we just fence and plant our waterways? Isn’t that enough?

Answer

No, riparian protection does not do much to prevent nitrogen leaching into rivers for example. It simply mitigates against erosion and prevents livestock defecating in the waterways.

9. Will less intensive farming be enough? Don’t some catchments have too many cows?

Answer

Yes they do. So it is a catchment-by-catchment issue – or even sub-catchment specific. Less intensive live-stocking by itself is not necessarily the only way to mitigate environmental damage. For example feedpads are a measure that can be used to more efficiently collect effluent and hence reduce the amount of destocking required.

10. Don’t wild birds cause just as many water quality problems as people and livestock?

Answer

In some areas wild birds can cause problems with bacteria in water. However as with human waste it is a question of extent – the sheer number of cattle, deer, pigs and (to a lesser extent) sheep on the land mean that generally bacteria issues in our fresh water are caused by farming. 

11. Doesn’t forestry cause water quality problems too?

Answer

When managed well forestry generally produces fewer water quality problems than pasture based agriculture. Forests leach very little nutrients and when they are growing they have no sediment or bacteria problems. The main problem with forestry comes at harvesting time when there is a risk of erosion, however harvesting practices are generally being improved. 

12. What is wrong with grandparenting? Shouldn’t nutrient allocations to farmers acknowledge past investments?

Answer

No, that would be to arbitrarily protect the most polluting of farming practices. The key is defining a transition from the status quo to the ideal where allocations are made on the basis of best practice. So that’s a tradeable market for rights. So grandparenting of rights in perpetuity would not be a goer, but a defined and reasonable pathway will be necessary.

The other problem with grandparenting is that it gives a terrible incentive – valuable rights to pollute are handed to those who do it most. This means that those land users who improve farming practices or have chosen to use less intensive farming methods are penalised. 

13. Aren’t farmers already taking action?

Answer

The dairy industry also likes to tout the figure that $1b has been spent on environmental improvements over the last five years. TOP doesn't dispute at all that many farmers are doing their best for the environment. To imply that there is nothing more to do would be an overstatement. We urgently need to get all farmers up with the best operators in terms of minimal environmental impact. 

The $1b figure itself is questionable as the majority of spending was on effluent management and keeping stock out of rivers - which is stuff farmers simply have to do to be compliant. 

14. Why is Climate change not included in your environmental policy? Surely this is the biggest issue

Answer

We agree. In fact, we think it's so important we have dedicated a whole policy to it which will be released in February.

15. Your freshwater policy doesn't mention LAWF. Are you supportive of the collaborative approach?

Answer

We are supportive of the collaborative approach championed by the Land and Water Forum, which has had some success. On some issues the reason it hasn't had more success is because the Government has cherry picked their recommendations - all should be implemented otherwise the consensus approach loses its mana. On other issues the LAWF has showed the limits of a collaborative approach in the absence of some strong guiding principles. Some things are just too difficult to agree on without a default approach such as our suggested starting point of "polluter pays". 

16. Can you provide an example of how a “corrective tax” might work for nitrogen leaching say?

Answer
Lets assume that the benchmark for acceptable nitrogen leaching in a sub-catchment is 30 kg per ha. And further’ let’s say the incentive/disincentive price for leaching is $20 per kg. Then how a corrective tax would work is that it would punish farms that leach above 30 kg/ha and reward farms that leach below that rate. Say Farm A leaches at 45 kg/ha while Farm B leaches at 15 kg/ha. Then in any year Farm A would be paying a penalty of $300 per ha, while Farm B would be receiving a cheque for $300 per ha. Say both farms are 150 ha, then that’s in effect a transfer from one farm to the other of $45,000 per annum. 
Over time the benchmark would continue to be lowered as our environmental protection standards get stronger. And in any sub-catchment we’d ensure that the pollution charges collected are all returned to the better-than-benchmark farmers in that same sub-catchment.  The idea of course is to reward good practice and to punish bad.

17. How do tradeable rights work?

Answer

This has the same purpose as corrective tax - to encourage better practice over time. Under this type of regime (analogous to the Emission Trading Scheme) quotas are issued for the right to pollute. Over time the total quota issued for any pollution type would diminish. The rights to pollute would be issued by auction and thereafter tradeable on a secondary market. Proceeds from the auction would accrue to a fund that finances clearing up consequences of environmental damage. The idea is that the most profitable activities will be able to afford to pay the most for pollution rights. Again it’s about making economic activity compatible with environmental sustainability. As the lid on the number of pollution rights issued sinks, only the most profitable firms survive.