Thursday, July 13, 2006

Polluters should pay

Yesterday, the Parliamentary Commissioner for the Environment released a report on Changing behaviour: Economic instruments in the management of waste, which examined the use of economic instruments in dealing with rubbish in New Zealand. For those who don't know, an "economic instrument" is policy-wonk-speak for "putting a price on something" - like, for example, the now abandoned carbon tax, which would have put a price on greenhouse gas emissions from everyone except farmers. The core concept here is a simple one: "polluter pays". Those engaged in activities which damage the environment, like emitting greenhouse gases or generating waste, should pay the full cost of their activities, rather than being allowed to dump them on wider society.

Unfortunately, the New Zealand government, and in particular the Ministry for the Environment, have been stunningly bad at applying this principle to waste. While the New Zealand Waste Strategy clearly envisions the use of economic instruments, MfE seems to have rejected them, and has instead relied on voluntary measures, which basically do not work. So our polluters get to continue polluting, and we get to effectively subsidise them by paying their extended costs. This doesn't encourage them to stop polluting (quite the opposite in fact), and so we are seeing more and more waste being generated.

(MfE's position is even more surprising when you consider that the New Zealand policy community has basically been obsessed with economic instruments since the 90's - a trend MfE has participated in to the full. For example, economic instruments have played a central role in the various climate change policies they have developed over the last decade. So why is waste immune to this trend?)

The PCE takes the government to task for this, and recommends that it start using economic instruments at a national level to discourage the generation of waste, as well as free up local governments to run their own schemes at a local level. And they're right; polluters should pay for ruining our environment. But given its inaction so far, I'm not sure whether the government is actually interested in acting, or whether they have already decided that it would be "bad for business" to make them pay for what they do.