Economic growth must not come at the expense of the environment
New Zealand’s natural environment is our #1 asset; it attracts tourists and skilled migrants, and earns an export premium. It is also a massive part of the Kiwi way of life.
However, our precious environment is only in such good shape thanks to our low population. Establishment party governments have been running down our natural assets, thanks to a strategy of economic growth at any cost, and pursuit of volume over value. Growth that comes at the expense of our rivers, lakes, oceans, soils or unique native wildlife is dirty, dubious and downright dumb. We can and must get smarter. If we want to keep and capitalise on our clean green image, we need to start investing in our environment.
TOP’s position is that we should leave the environment for our descendants in no worse shape than we inherited it – and preferably in better shape. We will protect and enhance our natural environment, not just because we love it, but because it makes good business sense.
We want true prosperity – growth that improves our well-being including our environment, our social harmony and our health. To achieve the harmony between the economy and environment, our approach is for polluters to pay to clean up their mess. We do not subscribe to the view that it’s appropriate to degrade our environment or for taxpayers to pick up the tab.
Land based industries are the backbone of New Zealand’s exports, and they also have the largest impact on our environment. In the past clearing hill country of forest led to massive erosion issues, and more recently intensive agriculture has added more nutrients to our waterways.
In many cases we have hit the limit for how much we can produce on our land. We have been using more fertiliser, more water and importing more palm kernel to feed ever more cows, which has led to further decline in the quality of our rivers and lakes in areas of intensive agriculture. Continuing to push for increased volume is not good for our land, our water, our wildlife, the cows or even our farmers. It is time to focus on profit growth from improving the value of our exports rather than increasing the volume of them.
Yet, for way too long the Government has been intent on doubling agricultural exports and increasing irrigation while leaving the taxpayer to foot the bill for cleaning up our rivers and lakes. The only reason increasing volume is viable is because the industry is not paying for the environmental damage it’s inflicting. TOP will ensure that polluters do pay for the damage they cause.
Our land-based industries face many risks; changes in consumer preferences, an increased demand for food with environmental integrity, and new technology. New Zealand agriculture can innovate to meet these challenges, as we have in the past and some small companies still do, but we have to think ahead and start preparing. Some farmers have already shown they can improve their environmental outcomes without hurting their bottom line. Charging polluters for their pollution will help prepare our businesses for the future and direct research funding away from the quest for volume to adding value.
New Zealand could be the world leader in producing high quality, sustainable food
We need businesses to provide income and jobs; enterprise and risk must be rewarded via profits as long as they are making us better off overall. Good regulation should support this by rewarding the environmentally best businesses and penalising the worst. Many farmers and other businesses care about their environmental impact and are already doing the right thing. But the time has come to lift the performance of many more of these businesses. The appropriate way is to ensure they pay for making good any environmental damage they cause.
TOP’s Plan for making growth Clean and Clever
The overarching issue is governance. Local authorities are making variable progress on environmental issues and there is a need for more independent coordination and oversight without resorting to legal action.
- Swimmable rivers and lakes, sustainable farming. TOP’s default goal is for swimmable rivers, unless local communities decide otherwise. We want intensification of land use to cease unless the impacts can be offset. TOP will invest in monitoring, research, improving water quality and resolving Treaty claims. This will be paid for by a levy on commercial water users and polluters, paid into regional Nature Investment Funds (NIFs).
- Protect and restore our oceans. TOP will use spatial planning to ensure all ocean users have fair access to the resources in our Exclusive Economic Zone. This would also ensure that at least 10% of all ecosystems are set aside as no-take reserves, with compensation for existing users where appropriate. This process would be funded by a resource rental on all commercial ocean resource users.
- Enhancing our natural assets. TOP will impose a $20 levy on all tourists entering the country. This revenue will be used to improve local infrastructure and placed in an independently managed fund that can be invested with partners to get the best biodiversity return (which may include the Regional Council NIFs).
- Resource Management – Less paperwork, more protection. TOP will ensure that development which delivers no net loss of natural capital can proceed in a timely fashion. Any use of biodiversity offsets will be quality assured. RMA fines will be directed to restoring the damage caused by the breach.
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.
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.
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.
No, access to quality water for citizens will remain a human right. Of course councils will charge as they do now for the reticulation.
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.
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.
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.
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.
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.
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.
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.
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.
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.
We agree. In fact, we think it's so important we have dedicated a whole policy to it which will be released separately.
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".
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.
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