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Idealog—in the ideas business

Environment vs economics: A fine balance

It's tricky finding a balance between environmental causes and the bottom line.

pattrick smellie idealog politics column

Whether it’s the loss of Environment Minister Nick Smith or a new determination by the Key government to steamroll barriers to faster economic growth, there’s been a marked cooling in the government’s relations with the environmental lobby in its second term of government.

True, there’s always tension there. But in its first three years, the National-led administration produced a judicious mix of wins for the environment at the same time as building its growth agenda.

For all the furore over mining on conservation land, deep-sea oil exploration and enthusiasm for looser urban boundaries, National listened closely to the likes of the Environmental Defence Society, Guy Salmon’s Ecologic, and other ‘moderate’ green lobbies such as Forest & Bird and WWF-NZ.

These groups generally don’t count their victories in measures of television news stunt coverage, but rather in the trench warfare of resource consent challenges, legislation and regulation – the endless war over little words with big implications.

The little word that’s causing the biggest rift is ‘balance’.

While the ideal of balancing economic and environmental benefits might seem obvious to the lay observer, the fact is that the concept of finding such balance went out the window in 1991, with the passage of the Resource Management Act.

Instead, it has sought certain environmental bottom line protection, both on land in New Zealand’s deep ocean.

In the case of proposed reforms to the RMA, the recently published recommendations of the government-appointed Technical Advisory Group concluded that the the courts have been interpreting the RMA as a question of economic and environmental balance anyway.

Rather than reaffirm the original intent, the TAG suggests it would be better to change the law to reflect how it’s said to have operated in practice. In the process, more than 20 years of common law precedent will go out the window, leaving resource planners with the prospect of years in the courts to define what the new law means.

Naturally, this doesn’t greatly please environmental guardians who’ve worked hard for years to find, ironically, the balancing point between vital protections and allowing the economy to develop.

The irony is perhaps greatest in the case of the Exclusive Economic Zone (Environmental Effects) Bill, in which a similar presumption in favour of balance has led to a highly public parting of the ways between the government and the EDS, WWF-NZ, Forest & Bird, and Ecologic.

As EDS chair Gary Taylor has put it: “The scales are being tipped on land and in the oceans more towards developmental interests and away from environmental bottom lines. That trade off will always lead to more and more environmental loss. We need to establish what we want to protect first. Having done that, we can let the market generally rip.”

That was what Taylor had in mind when he led the charge for a regime to regulate resource exploitation in the EEZ, which to date has lacked rules to secure either protection or development.

Yet the EEZ is where much of New Zealand’s potential future wealth lies. Out on the Chatham Rise, plans are advancing to mine phosphate nodules from the ocean floor by the end of 2014. Off the west coast of the North Island, numerous players are well-advanced on initiatives to mine ironsands for export to the steel mills of Asia.

That’s not to mention the potential for deep-sea oil and gas exploration. These are all key parts of the government’s plans to dramatically lift New Zealand’s growth rates, so it’s hardly surprising it’s sought a regime that’s likely, on balance, to favour economic interests rather than the environment.

At the time of writing, the government was undecided on its approach on either the RMA or the EEZ. But given the government’s enthusiasm for faster growth, the trend is clear.

There’s just one problem: What if the new regimes don’t create the certainty businesses need to invest?

The EEZ and RMA frameworks are as important to investors as they are to environmental protection.

The real threat to the government’s growth plans may yet be the prospect of protracted litigation to re-establish exactly where the boundaries lie.

Pattrick Smellie is a Wellington journalist and founder of the BusinessDesk news service.

Originally published in Idealog #41, page 69

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I think the problem here is the framing of the issue as 'economy vs environment'. I don't believe they're mutually exclusive, necessarily.

There are other ways to frame it, including 'economy<—>environment', where we focus on technologies and ways of doing things which are environmentally sound and which serve up economic benefit, sometimes as a RESULT of being economically sound. GreenTech would seem an obvious example.

The point that the 'powers to be' seem to miss here is that you can have an 'evironment' without an economy but you can't have an economy without an environment. New Zealand's 'clean, green' image is worth billions to our exporters yet we are destroying it at every opportunity and the opportunity to enjoy the economic benefits with it.

Agree with both these points. The '100% Pure' legacy is vital for the growth of the F&B export sector and Tourism in particular, no matter how tenuous it is. The current government seem to have pitted economic progress against the environment, which is fundamentally flawed in its approach.

Agree with above. This whole discussion is too often based on faulty and out of date framing of 'balance' - it too often translates as 'how much destruction, waste and pollution can we get away with'. Imagine having a house and saying I am seeking a balance between willfully destroying bits of it, while redecorating the rest. Your neighbours would rightly think you were mad. The only viable long term future lies in finding where human well-being (which is most definitely NOT the same as the economy as it is currently defined) can exist in harmony with nature.

This particular phrase is brilliant:
'As EDS chair Gary Taylor has put it: “The scales are being tipped on land and in the oceans more towards developmental interests and away from environmental bottom lines. That trade off will always lead to more and more environmental loss. We need to establish what we want to protect first. Having done that, we can let the market generally rip.”'

The Institute for New Economic Thinking at Oxford (INET) led by Eric Beinhocker has published some great papers on how strict environmental protection regimes are beneficial for markets because they tend to constrict resources and encourage innovation.

Our focus on false dichotomies is a sad state of affairs. I'm happy to not have economic 'development' if it means that we trash the environment in the same way that I'm happy that people are (generally) paid a fair wage, and that children go to school, rather than being paid a pittance or put to work at the age of four.

We've got it backwards. Society frames what is and isn't acceptable regarding how they want to live and we work the economics out from there. Not the other way around. Unfortunately, the calls of what are or are not acceptable don't seem to be loud enough.

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