Environment researchers have made fresh calls for a tax on polluters on the back of an OECD report highlighting rising pressures on our green backyard.
Through its new book, Vanishing Nature, the Environmental Defence Society has put forward an environmental consumption tax and rebate as a key reform, which it argues has the potential to tackle environmental degradation while broadening and rebalancing New Zealand's tax base.
The lead author, EDS senior policy analyst Dr Marie Brown, said it would also help to reduce wealth inequality, could be designed to cut growth-limiting income and company taxes, and fund climate change mitigation.
The tax would effectively put a price on environmental impacts of intensive land uses, such as biodiversity loss, greenhouse gas production, accelerated runoff and pollution from nutrients, with land area and intensity of use identified from high-resolution satellite imagery and land title information.
An accompanying rebate structure could redistribute part of the revenue raised into funding for conservation and other green activities.
"But it also has important potential to redistribute our current tax burden away from income, especially low-income earners, address growing inequality, and stimulate innovation." Dr Brown added: "While damage is cheap and carries no consequence for the polluter, and others and future generations bear all costs - the inevitable, unfair result is diminishing prosperity."
She pointed to this month's OECD Economic Surveys New Zealand report, which suggested the Government implement progressive "land, environment and capital gains taxes to address environmental, economic and social issues".
Dr Eric Crampton, head of research at the New Zealand Institute, said that in principle, taxes on pollution were far better than taxes on income so long as they were set properly - but this was very hard to do.
A land use-based tax could be unfair if a farmer who used better practices to reduce nutrient runoff and faecal coliform - which were invisible to satellites - was made to pay the same rates as a neighbour who had not.
"Second, the environmental cost of activity on any one piece of land depends a lot on what else is going on in the area - setting a tax and subsidy scheme to account for that does not seem simple."
Environment Minister Dr Nick Smith has not reviewed or received any advice on the concept, but he also said the approach could be flawed.
How the Environmental Defence Society's proposal would work
• The tax would be based on land area and the intensity of its use as identified from high-resolution satellite imagery and land title information.
• It would put a price on all the major environmental impacts of intensive land uses, including biodiversity loss, greenhouse gas production, accelerated runoff and pollution from nutrients, sediment, fecal coliforms and toxins.
• Low intensity land uses that supply largely natural ecosystem services would earn a rebate at a per-hectare rate commensurate with opportunity and management costs borne by the landowner and the value of those services to society.
• Different parts of a single property would therefore be subject to different per-hectare tax rates based on the cover on, and use of, each part.
• A landowner could minimise tax liability by confining the most environmentally intensive uses to small areas and improving the state and legal protection of natural areas.
• Revenue raised could fund increased conservation and environmental management, climate change mitigation or other general government expenditure. Similarly rebates could be spent at the landowners discretion on conservation or other priorities.