Comment: With environmental issues being on the rise, particularly those involving fresh water, Dr Jacqueline Rowarth explains why economists are needed urgently.
The Government has released the new National Policy Statement for Freshwater Management and the new National Environmental Standards.
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The timeframe for consultation is short, but the goal is basically the same for everybody: fresh water that meets the needs of aquatic organisms and recreational users.
What has yet to be established is how much people are prepared to pay, personally, or through the Government and how much they are prepared to forego.
The New Zealand Institute of Economic Research (NZIER) asked about personal willingness in their research published at the end of last year. Only 40 per cent of the general public were prepared to pay $50 a year to protect aquatic flora and fauna.
Fifty dollars could be 10 cups of coffee or four glasses of wine. Or it could be clothes or food for a child. But for 60 per cent of the public, the $50 was important for a personal budget, not for an environmental benefit.
In contrast, the government has put funds towards improving the waterways.
The 2019 budget allocated $229 million "to invest in projects to protect and restore at-risk waterways and wetlands and provide support for farmers and growers to use their land more sustainably".
The implication is funding assistance to transition to a new mode of action, which has been the approach in the EU.
There, however, the support is ongoing. The subsidies are given to farmers to offset loss of income, which has occurred because of land being set aside and stocking rates or fertiliser inputs being reduced.
Without this funding, the UK's Department for Environment, Food and Rural Affairs (DEFRA) calculates that only 25 per cent of farmers would be solvent. Subsidies, tourism and off-farm incomes support the other 75 per cent.
For the UK, cars, gold, crude oil, medications and aircraft parts are the top exports, and the contributions to the export economy are diverse. Food preparations appear at 39th place, with bakery goods at 67, whole fish at 85, cheese at 92 and beef at 159. The UK has a multi-source income stream.
Primary production dominates
The story in New Zealand, however, is very different. The export economy is still dominated by primary production.
Farmers and growers have developed systems that involve production, decreasing risks to that production (fertiliser and irrigation, for instance) and protecting the environment.
Waterways have been fenced, wetlands created, sediment traps installed, and bush areas have been covenanted.
In 2018, Land, Air, Water Aotearoa reported that water quality appeared to be improving in a considerable number of rivers (more than were deteriorating). This was heartening for farmers and growers – their investments were having an effect.
But the big issue remains. People want the rivers that they think they remember from their childhoods. This is even though NIWA and NZIER have suggested that rose-coloured spectacles are in play: water quality is better now than it was in the 1980s.
Applying EU quality guidelines to New Zealand waters indicates that our rivers are good quality, but that is not how it is being presented by environmentalists.
An important omission
Minister David Parker established a Freshwater Leaders Group, and a Science and Technical Advisory Group towards the end of 2018.
There was some grumbling about membership when the groups were announced, but curiously little comment about the lack of an economist.
This omission is important, not simply because of the direct cost of action, but also because of the potential ongoing costs and opportunity cost to the country.
Sediment in Porirua Harbour has doubled in five years. Motorway construction, forestry and farming were implicated. In the five-year timeframe, it is the motorway that has been the big initiative, but nobody is suggesting that New Zealand stops development – the opportunity cost is too great.
Bacteria in waterways are a problem in terms of recreation and food. The EU, with high population, bird life and animals, has swimmable rivers and no outbreaks of human illness.
Questions should be asked
The EU measurement guidelines for swimmable water quality are set sufficiently high to protect the human population.
Comparison with what appears in the new guidelines for consultation in New Zealand is warranted.
If New Zealand standards for human health are set higher than the EU for bacteria, as they are now, questions should be asked why, and what the cost will be.
Nutrients are also of concern, but some accumulation of nutrients along the length of a river is natural, just like sediment.
Sir David Attenborough explains the development of a river from being vigorous and dangerous when young, to tranquil waters rich with nutrients from its banks as it matures.
The nutrients are important for plant growth and in turn the growth of other aquatic organisms.
Ireland has spent $6 billion on 'cleaning up its rivers', with little effect. But Ireland still has some of the top fishing rivers in the world – and a greater concentration of nutrients than the New Zealand rivers contain.
The big questions remain: how much are people prepared to pay, directly or indirectly; and what will the cost be in lost opportunity for development? Economists are needed urgently.
- Dr Jacqueline Rowarth CNZM CRSNZ HFNZIAHS has a PhD in Soil Science and has been analysing agri-environment interaction for several decades.