Background
Clean air is a fundamental right of all New Zealanders. Clean air is good for our economy and our society because air pollution has extensive negative health impacts. The Health and Air Pollution in New Zealand (HAPINZ) study highlighted the high cost - well over $1 billion a year- that we pay because of preventable air pollution (Fisher et al, 2007). The Green Party supports mandatory national air quality standards as a practical, fair and effective tool to keep our air clean and protect the health of New Zealanders.
In October 2004, the Government introduced the National Environmental Standards for Air Quality. The air quality standards are regulations made under section 43 of the Resource Management Act 1991 (RMA). They include:
- seven standards banning activities that discharge significant quantities of dioxins and other toxics into the air
- five standards for ambient (outdoor) air quality
- a design standard for new wood burners installed in urban areas
- a requirement for landfills over 1 million tonnes of refuse to collect greenhouse gas emissions.
The Green Party supported these standards, but our policy also calls for much stricter vehicle emissions standards, as vehicle emissions are not adequately addressed by the existing NES.
The Minister for the Environment Hon Dr Nick Smith announced a review of the air quality standards in 2009. The review focuses on the ambient air quality standards, particularly the regulation for particulate matter less than 10 microns in diameter (PM10). The Minister specifically wishes to review three aspects of the PM10 regulations:
- the number of permitted exceedances of the standard - currently one per year
- the restrictions imposed on industry consents - ie from 2013 no new consents granted to new or existing industry to release PM10 in airsheds that breech the standard
- the associated timeline of 2013 for airsheds to comply with the standards to prevent industry consent restrictions to take effect.
High concentrations of particulates have three sources: home heating (open fires, old stoves and coal), motor vehicles (primarily in the Auckland region) and industry. Over 900 people a year are estimated to die prematurely each year due to particulates (PM10 and PM2.5) alone (Fisher et al, 2007). This is more than twice the number of people who die in motor vehicle accidents each year.
Low income households in particular are susceptible to living in areas with higher concentrations of dangerous emissions, because property values tend to be lower near industry and roads with high traffic volumes. As home heating is a major source of PM10 in New Zealand, it is critical to provide homes with a clean way to stay warm and dry while phasing out polluting sources of heating. Cold damp houses also have high health costs.
Forty-nine percent of New Zealanders currently live in 26 airsheds that breech the national air quality standards. In 2013, it is anticipated that 15 airsheds will not comply with the standards, affecting 45 percent of New Zealanders. There are significant health impacts for everyone who lives in areas that breech the standard. The original standards were originally signalled in 2003, and some councils, such as Environment Canterbury and Nelson City Council (unitary authority), have made excellent progress at improving air quality. Other councils have deliberately decided not to act, and have been heavily involved in lobbying the new Government to reduce and delay the standards.
The proposed changes to the National Environmental Standards on Air Quality seek to lower and delay ambient air quality standards for PM10. There is currently no standard for PM2.5.
We cannot support changes that will lower and delay standards, although we accept that a better outcome may be achieved if there is a mechanism in place that allows industry to offset emissions and reduce pollution from home heating and transport, in the short to medium term.
Discussion questions:
Problem definition
1. Have the main problems been defined accurately?
Perceived stringency of the PM10 standard
We disagree that the standard is overly stringent. As a country that trades on its "clean green brand", and prides itself on a high standard of living, it is appropriate to require a slightly stricter standard of air quality than average. In Australia, which permits only 5 exceedances a year, the higher rate is largely due to the prevalence of environmental factors such as bush fires (which have been proposed to be excluded from the permitted exceedances in the amendments to the NES.) As stated in the Regulatory Impact Statement, increasing the permitted exceedances "does not optimise the policy objective of protecting public health since it is known that an increase of permitted exceedances will increase adverse health effects. This will result in transference of costs to the health sector."
Equity of current regulations:
We believe the equity issue is a bit beside the point. In polluted airsheds, new polluting industry will increase harmful particulates in the air, and therefore result in harmful health consequences and additional deaths to New Zealanders living in those airsheds. The argument for equity seems to imply that industry should be able to contribute as much to harming health and killing people as domestic home heating and vehicles. While industry is responsible for less than a quarter of the overall pollution (up to 16%, and 14% in Auckland, which is significant in its own right), the additional pollution they contribute will still cause additional health problems and deaths. Industry must, at the very least, be required to pay to reduce pollution else where in the airshed, or to clean up its own processes.
Compliance with standard by 2013:
We agree, based on the evidence explained in the discussion document that many regions are not on target to comply with the standards by 2013. While we agree that there should be some flexibility for regional councils to deal with air quality problems in the way that best suits their needs, the point of a national standard is to keep the playing field level, and guarantee a minimum standard of clean air for all New Zealanders. Human lungs are the same throughout New Zealand and the air standards need to be set to protect those lungs whether they are in Hawkes bay or Canterbury. In our view, regional councils must be able to demonstrate a serious commitment of time and resources to meeting the standard, and should be held accountable for not meeting the standard. These standards have been signalled for nearly 7 years, and councils have an additional 3 years to begin making progress. Standards for Regional Councils should not be lowered and delayed simply because they aren't on target to be met.
2. Are there other problems you can think of that need to be addressed as a priority?
There are three problems that should be addressed as a priority.
A. Point-source pollution:
The current NES on air quality does nothing to set a bottom line regulation of particulate emissions from industry in airsheds that are not monitored or do not breech the standard. However, a polluting industry may still put out enough particulates to harm the health of people living or working near the source of the particulates. An industry that is highly polluting but located in an airshed that does not breech the standard has no mandatory resource consent restrictions, whilst an industry that puts out a small amount of particulates in an over-allocated airshed (under current standards) cannot be granted a resource consent. A maximum point-source standard should apply to any industry in the country, regardless of the state of the airshed, and this should inform Regional Plans. This will ensure a bottom line of protection for New Zealanders and the environment, and ensure an even playing field for all industry in the country. In areas where all competitors are subject to the same regulatory requirements, there have been fewer adverse impacts on labour demand (Berman & Bui, 2001).
B. PM2.5 needs to be monitored and to have a standard. This was highlighted in the TAG report and monitoring should commence as soon as possible, and a standard should be introduced. The amendment to the standard that is currently being proposed is an ideal opportunity to commence mandatory monitoring and introduce a standard.
Various agencies including the WHO, US Environmental Protection Agency (US EPA) and the European Parliament advocate the adoption of PM2.5 targets. The US adopted a PM2.5 standard in 1997 and then revised it down in 2006. The European Union (EU) adopted a PM2.5 standard in 2008. However, the air quality issue of PM2.5 has not been widely taken up in New Zealand. (TAG report, p.31)
C. Motor vehicles: Given the high contribution of vehicles (particularly heavy vehicles) to poor ambient air quality and dangerous particulates, we believe the national standards should have a clear and strict mechanism able to be applied to vehicles and transport policy generally. While this is the responsibility of the Minister of Transport, the air quality standard should be a baseline against which transport policy is tested. This was highlighted in the TAG report, and we would like to see the development of options to ensure that vehicle users are paying their fair share to reduce harmful particulate emissions.
3. Do you agree with the policy objectives?
We agree with the following main policy objectives:
- Ensure they provide the maximum net benefit to New Zealanders taking into account the economic, social and environmental benefits and costs of air pollution.
- Provide greater certainty for industry by providing a 'level-playing field' that clarifies environmental expectations before the resource consent process.
- Support the protection of public health and the environment by providing a bottom-line standard that must not be breached.
- Provide greater certainty in resource consent decision making and regional plan preparation at the local level.
4. Do air quality standards materially influence industry investment decisions and regional location decisions?
Research on ambient air quality standards applied in the United States suggests that regulation, rather than investment in research and development alone, have been the most effective stimulus of technical innovation. (Taylor et al, 2005).
"Without the market stimulated by government regulation, patenting activity levels are extremely low. This means that until the late 1960s, the private sector, which owns most patents in SO2 control technologies, was not fully engaged in commercially relevant invention worthy of filing patent applications. It also means that the overall research community had one less public source of knowledge to draw on about novel, useful, and non-obvious inventions in this technology area. In addition, without the market stimulated by government regulation, operating experience could not contribute useful insights into how to improve the technology.
The implication of this is that an "RD&D and wait" environmental policy—one that invests in RD&D and otherwise does not require environmental performance until environmental technologies have matured—is likely to find environmental improvements either a long time in coming or dependent on the innovative activities of other nations. The second of these outcomes, while more timely and low cost to U.S. polluters, is unlikely to be the best economic solution for the country, as it means that other nations will capture the spillovers of whatever innovations are induced in this arena." (Taylor et al, 2005)
Air quality standards are thus very positively influential on industry investment and technological innovation. Without regulation, there is no incentive to employ the technological solutions that will result in clean and safe air.
Moreover, despite industry fighting the standards and claiming that there would be job losses, research on the strictest ambient air quality regulations applied in Southern California found they did not lead to a large decline In employment, and if anything there was a slight improvement in labour demand because of new work created to comply with the standards (Berman & Bui, 2001).
5. Have the options achieved the policy objectives?
The preferred options 4a and 4b do not achieve the policy objectives because they trade off human health, well being and lives for industry benefits. The Benefit Cost Ratio (BCR) for the preferred options is hardly better than that of implementing the standards as is in 2013, except that in the former case the benefits are simply financial benefits to those industries that are polluting, and the costs are in human health and lives. This is unacceptable.
Moreover, economics research supports the thesis that early introduction of regulations will be a far more effective means of stimulating clean technological innovation, thus deferring the standards and removing industry regulations will likely inhibit the development of a clean green economy in New Zealand.
The main problem identified in the discussion document, namely high cost to industry and jobs of mandatory resource consent denial in polluted airsheds, is sufficiently dealt with by the proposal in Option 3, which enable mandatory offset schemes in lieu of resource consent denials from 2013.
6. Have the options addressed the identified problems?
A general weakness in the discussion document is that there is no comparative analysis of the advantages and disadvantages of each option. It is entirely unclear why Option 3 is not the preferred option. It seems to meet all of the policy objectives and will have a much lower social health cost than the preferred options. It will not prevent industry from operating, it will provide certainty and clear expectations, and will provide a stimulus for innovation as well as a source of revenue for Regional Councils to improve air quality.
7. What preferred option do you think should be considered?
Option 3 should be the preferred option.
Implementing the standards from 2013 will have the best outcome in terms of motivating regional councils and industry to reduce their pollution sooner, rather than just delaying it for another 5 years. There is no reason to think that mandatory offsets will result in a greater loss of jobs in 2013 than in 2018, because 1) research has shown that industry tends to wait until the last minute to comply, 2) regulations (applied equally across the country) will not disadvantage industry relative to their competitors, and 3) regulations are the single most effective tool to stimulate technological innovation.
Implementing the standard in 2013 with mandatory offsets will also enable regional councils to reduce pollution in over allocated airsheds more quickly, and this will save thousands of lives.
The offset scheme allows industry and regional councils flexibility to achieve a reduction in harmful pollution, while ensuring that polluting industries pay a fair and equitable share of the costs.
However, in order for us to support Option 3, additional conditions would have to be applied to the mandatory offset scheme.
To introduce a financial incentive to reduce emissions, it would be useful if Regional Councils could increase the costs to polluters over time. For example, the amount collected per tonne of particulate emissions could be increased each year. Money from the scheme should be applied to removing particulates from home heating and/or vehicles, but given that the cost of removing the same amount of particulates from different sources varies, it would be justifiable for the price to be set at a minimum at the cheapest option and become more expensive over time.
The mandatory offset scheme should eventually be phased out, with industry regulations requiring that resource consents be denied if they increase pollution in over-allocated airsheds.
We support the current conditions of offsets:
The air quality standards require that offsets must:
- be from another source into the same airshed
- take effect within one year after the grant of the resource consent
- be effective for the duration of the consent.
The amount of the offset is no less than the amount of particulates emitted into the air.
However, a further change to the air quality standards that we would support would explicitly require that:
- the nature of the contaminants being 'put-in' needs to be similar to those 'taken-out'
- That the proponent of the proposed activity is financially liable for the offset.
The following table explains our position on all of the sub-options outlined in the discussion document, and additional options we think should be considered:
Option | Position | Comment |
(1) Increase the number of permitted exceedances from one to three | oppose | Increased exceedences will mean higher health costs and more deaths. |
(2) Exclude exceptional events from being counted as exceedances | support | Support for activities that are not under human control (eg bush fires, volcanic eruptions). |
(3) Remove all industry consent restrictions | oppose | Industry adds to harmful pollution, they should have to pay their fair share. |
(4) Extend the timeline to 2020 (max) | oppose | The sooner the standards come into effect, the sooner we will have cleaner air and adopt cleaner technologies. |
(5) Place a greater focus on education | support | Education is always a good thing, but without regulation will not achieve as much. |
(6) Require mandatory reporting (PM10) monitoring data | support | We support mandatory reporting of monitoring data. |
(7) Require councils to submit their airshed implementation plans | support | Increased national coordination will incentivise Regional Councils to make progress sooner. |
(8) Establish increased ministerial oversight | n/a | Unclear in the discussion document what the exact distinction is with Option (13) in the discussion document. |
(9) Investigate funding links (link funding in areas without a plan in place) | support investigation | We support investigating the impact of funding links, but cannot support implementing funding links if it will penalise households applying for EECA grants. |
(10) Retain one permitted exceedance | support | Increased exceedences will mean higher health costs and more deaths. |
(11) Retain industry restrictions | support | Industry adds to harmful pollution, they should have to pay their fair share. |
(12) Retain the 2013 timeline | support | The sooner the standards come into effect, the sooner we will have cleaner air and adopt cleaner technologies. |
(13) Use existing ministerial powers under the RMA (s27)* | support | Support increased ministerial oversight to ensure Regional Councils are making appropriate progress. |
(14) Establish an air quality compliance strategy* | support | A national strategy should help Regional Councils who are not on track to comply. |
(15) Investigate funding links (link funding to breeching airsheds) | support investigation | We support investigating the impact of funding links, but cannot support implementing funding links if it will penalise households applying for EECA grants |
(16) Introduce national guidance on domestic emission restrictions | support | National guidance should help Regional Councils reduce emissions from the domestic sector. |
(17) Introduce mandatory offsets for all discharge consents in breaching airsheds after 2013 | support | We support this with some qualifications about how the offset scheme will work |
(18) Introduce mandatory offsets for new industry consents in breaching airsheds after 2018 | oppose | There is no reason to think imposing an offset scheme will cost more jobs in 2013 than in 2018. The sooner we implement standards, the sooner industry will comply. |
Additional Options (mentioned in TAG report) that we would like to see introduced | ||
(19) Require monitoring of PM2.5 and commence introduction of standard | ||
(20) Mandatory Emissions screening for vehicles (especially heavy duty) | ||
(21) Retrofits for heavy duty vehicles | ||
(22) Accelerated scrappage programmes (Cash for clunkers) | ||
8. Are you aware of any other costs or benefits of the options?
No analysis has been undertaken as to the opportunity cost of clean tech jobs NOT created because of the deferral of the industry regulations to 2018. Given the economics research that suggests that environmental regulation can create job opportunities and stimulate innovation, the cost benefit analysis undertaken is likely to overstate the costs of implementing the standards in 2013.
11. Is it practical to require mandatory offsets in over-allocated airsheds?
Yes, it is practical and equitable.
17. Are there any costs and benefits we have overlooked?
No analysis has been undertaken as to the opportunity cost of clean tech jobs NOT created because of the deferral of the industry regulations to 2018. Given the economics research that suggests that environmental regulation can create job opportunities and stimulate innovation, the cost benefit analysis undertaken is likely to overstate the costs of implementing the standards in 2013.
18. Do you have information that you would like to see included in the cost-benefit analysis that will be carried out after the submissions are received and analysed?
There should be some transparent assumptions included about substitution of jobs and industry benefits with cleaner and better technology as a result of the regulations.
Research Papers cited:
Berman & Bui. 2001. Environmental regulation and labor demand: evidence from the South Coast Air Basin. Journal of Public Economics 79 (2001) 265 - 295.
Fisher et al. 2007. Health and Air Pollution in New Zealand. Funded by the Health Research Council of New Zealand, Ministry for the Environment, & Ministry of Transport. Available at: http://www.hapinz.org.nz/HAPINZ%20Report%20Final%20Clean%20June%202007%2...
Air Quality TAG. 2010. Air Quality - Getting the Balance Right. Report of the Technical Advisory Group on National Air-Quality Standards. Ministry for the Environment. Available at: http://www.mfe.govt.nz/publications/air/national-air-quality-standards-g...
Taylor et al. 2005. Regulation as the Mother of Innovation: The case of SO2 Control. Law & Policy. 27:2 (April 2005) 348 - 378.
