Economy and Environment Principles for Policy Development

Transcription

1 Economy and Environment Principles for Policy Development Introduction These principles have been developed by the Natural Resources Sector Network (NRSN) 1, and signed off by the chief executives of the participating agencies. The aim is to provide a framework to help ensure analysts working on natural resource policy development take into account different value sets and the linkages between the economy and the environment. The principles highlight key ideas, issues or questions to be considered in natural resource policy development. They are not intended to replace the policy development processes that the NRSN agencies use, but to feed into existing processes. This document lists the principles, then provides a brief description of what each principle means for natural resources policy and some examples to illustrate the issues. A separate desk aid provides further detail about the application of these principles in the policy process, including questions to trigger thinking and discussion within and between agencies. The Natural Resource Sector Support Unit 2 assistance. [nrssu@mfe.govt.nz] can also provide Note on examples The examples provided are intended to illustrate the types of situations where the principles will apply. They do not cover the complexities of the policy issues, nor are they intended to be a statement of best practice. 1 The NRSN consists of seven natural resources agencies (Ministry for the Environment, Ministries of Fisheries, Economic Development, and Agriculture and Forestry, Department of Conservation, Land Information New Zealand and Te Puni Kōkiri) supported by the three central agencies (Department of the Prime Minister and Cabinet, The Treasury and State Services Commission). 2 Housed at the Ministry for the Environment Economy and Environment Principles for Policy Development June 2010 Page 1 of 8

2 ECONOMY AND ENVIRONMENT PRINCIPLES FOR POLICY DEVELOPMENT Principle 1: INTERTWINED A healthy environment, based on healthy functioning ecosystems, is integral to meeting economic needs and aspirations. Principle 2: GOVERNMENT S ROLE Government has an essential role to play in creating the framework in which resource scarcity and competing interests are managed and environmental bottom lines are protected. Principle 3: CLEAR GOALS Multiple policy goals create complexity tensions between achievement of these goals are inevitable. Principle 4: SUPPORTING GOOD DECISION-MAKING Base analysis and decision-making on a strong evidence base alongside broad, transparent, and participative processes that recognise the legitimacy of competing interests. Principle 5: ADAPTIVE MANAGEMENT Natural resource management must be adaptive, reflecting the dynamic nature of both the resources and the knowledge we have about them. Principle 6: DESIGNING A SOLUTION Effective policy will involve a mixture of regulation, economic instruments, and other forms of intervention. Economy and Environment Principles for Policy Development June 2010 Page 2 of 8

3 The principles Principle 1 INTERTWINED A healthy environment, based on healthy functioning ecosystems, is integral to meeting economic needs and aspirations. New Zealand s economy is dependent on the services the environment provides (e.g. water), meaning that a healthy environment is fundamental to a healthy economy. The two are indivisible, so policy should be developed in a way that gives weight to both economic and environmental considerations. This is a crucial issue for New Zealand given the biological basis of our economy. Primary production and tourism equate to about 17 percent of gross domestic product (GDP). Natural resources also hold a central place in New Zealand s national identity and are of particular importance in Māori culture and the Māori world view. This means that both the long-term economic and environmental implications of a policy need to be considered. Environmental damage resulting from activities allowed for shortterm economic gain can result in economic loss over the longer term, if the natural resource is so depleted or degraded that services are no longer functional, desired values cannot be obtained from the resource, and/or significant additional costs are created. Principle 2 GOVERNMENT S ROLE Government has an essential role to play in creating the framework in which resource scarcity and competing interests are managed and environmental bottom lines protected. The government has a responsibility to act in the public interest, and you need to consider the most appropriate role for government in all policy development. In the natural resource sector, these include: protecting environmental bottom lines establishing governance frameworks (e.g. deciding who makes decisions, developing compliance regimes) developing frameworks for allocating resources establishing and enforcing rights frameworks collecting information to improve the management regime and decision-making through monitoring and evaluation, and support for public good research. Policy choices about whether and how government will intervene will depend on the government s role in a particular issue, the outcome it is seeking, and an assessment of the Economy and Environment Principles for Policy Development June 2010 Page 3 of 8

4 costs and benefits of doing so. In particular, you should always ask whether parties other than the government should be responsible and/or could better achieve the desired outcomes, as well as the potential costs should government intervention fail. In natural resource management, one of the key factors in decisions about government s involvement is the long-term nature of environmental issues. Generally, the government seeks to maximise the net benefits gained from New Zealand s natural resources over time. It is important to be aware that in this context benefit should be broadly defined: it includes benefits to the economy, the environment, and to social and cultural outcomes. Benefits derive from extractive uses (e.g. fishing, irrigation) and nonextractive uses (e g tourism, tramping), intrinsic values (e g existence value) and ecosystem services (e g processing waste, climate regulation). This definition of benefit means that there is a broad range of interests, values and aspirations that need to be taken into account. This is also a consideration under principle 3. EXAMPLE: the government is intervening in water management to ensure that there is an efficient system for the allocation of water that provides for ecological, cultural, social and economic values. A role of government that cannot be carried out by any other party is representing the Crown as the Treaty partner with Māori. In the natural resources area, this takes two main forms: Negotiation of settlements that provide an apology and redress from the Crown for past injustices. Increasingly, settlements are also being used to make iwi s role in the management of natural resources more explicit. Development of policy that reflects contemporary relationships, interests and obligations in the management and use of natural resources. EXAMPLE: Treaty settlements are increasingly addressing the rights and interests of iwi in the management of water bodies. The Te Arawa lakes settlement provided an increased role for Te Arawa in the management and restoration of the lakes. Principle 3 CLEAR GOALS Multiple policy goals create complexity tensions between achievement of these goals are inevitable. Any natural resource policy issue which has significant environmental and economic aspects will almost certainly have a number of different policy goals: there is often competition for limited resources, and significant differences in the values that people associate with a given resource. There are particular features of natural resource policy that add additional layers of complexity, including the need to consider the inter-generational impacts of a policy and the uncertainty associated with the information on which natural resource policy is based. Economy and Environment Principles for Policy Development June 2010 Page 4 of 8

5 To produce good policy that makes explicit how competing goals are balanced, it is necessary to be clear about the outcomes being sought, to identify the various competing interests and tensions, and to understand their interactions. The outcome you are seeking is the greatest net benefit for New Zealand over time; however, this is generally a judgement call. Final judgements about resolving the tensions between conflicting policy goals may need to be made by ministers, or by providing a framework so those holding competing values can resolve the conflicts themselves. EXAMPLE: the Resource Management Act is a framework that provides public processes for developing plans (rules for resource allocation and management of environmental effects) and for granting resource consents according to those rules. Policy relating to allocation of resources needs to take all of the competing interests and values into consideration, along with related issues such as the cumulative impacts of all activities on the resource. EXAMPLE: some areas of coastal waters have mineral resources (e.g. oil), high biological productivity, and are sheltered and easily accessible (e.g. by road). Aquaculture competes for space with fishing, boating, and other recreational activities, and with aesthetic appreciation, intrinsic values, and provision of ecosystem services. The locations may also have customary significance for Māori that would be degraded by some uses and activities. Principle 4 SUPPORTING GOOD DECISION-MAKING Base analysis and decision-making on a strong evidence base alongside broad, transparent, and participative processes that recognise the legitimacy of competing interests. All stages of policy development need to be underpinned by two important processes: evidence gathering and stakeholder and iwi participation. Analytical rigour is essential to good quality policy advice, and requires using the best information available to inform analysis. Policies that are not informed by good evidence are prone to failure and unintended consequences. Sometimes the evidence you need is simply not available, but you need to get the best information you can. Evidence can be obtained from many different sources, such as research data, official statistics, environmental monitoring, and peoples experiences and perceptions. In addition to using high quality evidence, participatory processes are a vital input to policy development. The process by which stakeholders and iwi are involved in the development of advice can itself have an impact on the legitimacy of the decisions made. Transparency is Economy and Environment Principles for Policy Development June 2010 Page 5 of 8

6 one important issue, but the quality and breadth of consultation or discussion, as well as the point at which involvement is offered, are also significant. Stakeholders and iwi are affected by policy and have an important role in implementing it, so their involvement in policy development is key. Stakeholders and iwi also hold information that the government does not, including: the different interests and values that people and organisations have for natural resources, particularly non-market values business and other costs observational data on the resource, system and/or activity in question local circumstances that may affect implementation or effectiveness of the policy. Transparency is important in ensuring the legitimacy (and therefore durability) of decisions and in improving the evidence used in decision-making by allowing it to be tested and challenged. This means that the information used in developing advice and making decisions needs to be widely available and the limitations of the information (e.g. any uncertainty) need to be clearly stated. EXAMPLE: the Land and Water Forum (the forum) is a group of iwi and stakeholders, encompassing primary industry groups, environmental and recreational non-government organisations and other organisations with an interest in fresh water and land management. The forum has been asked by ministers to run a stakeholder-led collaborative process to: recommend reforms for New Zealand s fresh water management identify shared outcomes and goals for fresh water and related land management identify options to achieve the outcomes and goals. The natural resource agencies have provided evidence to inform forum discussions, in the form of strategic analysis on the state of and trends in fresh water. Principle 5 ADAPTIVE MANAGEMENT Natural resource management must be adaptive, reflecting the dynamic nature of both the resources and the knowledge we have about them. Policy development in the natural resource sector needs to take into account that natural, economic and social systems are all dynamic, the interactions between them tend to be unpredictable, and what we know changes over time. Using good information as the basis of policy advice mitigates some of the risk, but there will always be some level of uncertainty, both in the information used to make decisions and about the impact of policy. Policy advice needs to include options that provide flexibility to respond to new information and circumstances. The costs associated with flexibility also need to be considered, including the impact of an uncertain regulatory environment on businesses. Economy and Environment Principles for Policy Development June 2010 Page 6 of 8

7 Policy processes should provide for collecting and assessing new information (e.g. through monitoring and evaluation) and provide for changes to be made to policy settings in response. This may be as simple as building in a regular review of the policy. It is important to ensure that there is an efficient way of re-allocating resources over time. Adaptive management is often used in situations where the level of uncertainty is high. Another tool for managing the risks associated with uncertainty is the precautionary approach, which is based on the idea that lack of certainty regarding the threat of environmental harm should not be used as an excuse for not taking action to avert that threat, as delaying action until there is a high level of certainty will often mean that it is then too costly or too late to avert the threat. The IUCN recommends this approach where there is uncertainty, a threat of environmental damage, and the threatened harm is of a serious or irreversible nature. EXAMPLE: where the impacts of an activity are uncertain, local authorities sometimes issue staged resource consents. Under these consents approval is given for an activity to occur in part of the area applied for, with additional areas becoming available at a later date if monitoring of the initial activity shows that the impacts are below a certain level. Principle 6 DESIGNING A SOLUTION Effective policy will involve a mixture of regulation, economic instruments, and other forms of intervention. Government has a wide range of tools available to achieve outcomes. You should consider all types of government interventions, including combinations of interventions. Always consider the status quo as an option. Sometimes a government intervention may involve such significant costs or risks that it is preferable to simply live with the status quo. Some of the tools to consider when looking at policies relating to the economy and the environment include: providing statements 3 of strategy (e.g. the Biosecurity Strategy) and policy (e.g. National Policy Statements under the Resource Management Act 1991) making legislation and regulations, and setting standards economic instruments (e.g. tradable rights) and incentives (e.g. levies or taxes) collaborative and stakeholder-led approaches (e.g. voluntary measures) information, education and facilitation establishing governance frameworks to empower local government, iwi, industry, and others. The selection of an effective mix of tools will depend on: 3 These may be legally binding. Economy and Environment Principles for Policy Development June 2010 Page 7 of 8

8 how the problem is defined and the objectives of the process understanding the possible roles of government and others understanding who and what you are trying to influence, and matching tools and incentives to the changes you are seeking the risks, costs and benefits of the different tools in the particular case, including the potential for unintended consequences and the possible impacts of those. Who bears the risks and costs, and who reaps the benefits, should also be considered. EXAMPLE: the government has used an economic instrument (tradable rights) to manage commercial fisheries to allow achievement of economic value while ensuring sustainability. The rights guarantee holders access to a certain proportion of the volume of fish available for commercial fishing each year. The government seeks to ensure sustainability by setting the amount of fish available for commercial catch each year, and manages impacts on other species or users (externalities) by using other interventions (e.g. regulations restricting use of certain commercial fishing gear). There is also provision for cost recovery, where commercial fishers pay levies to cover the costs of services such as research and enforcement. This provides incentives for commercial fishers to participate in decision-making on services and take responsibility for service provision where they can do it more efficiently and effectively. It also provides incentives for government to become more efficient and effective in the services it delivers, as the decisions it makes are subject to intense scrutiny. Economy and Environment Principles for Policy Development June 2010 Page 8 of 8