5. Evaluation of the Proposed NPS

5.1 Introduction

5.2 Evaluation of the objectives

Objective 1 – Enabling well-being of people and communities

To ensure that Freshwater Resources are managed in a way that enables the people and communities of New Zealand to provide for their social, economic and cultural well-being, and their health and safety.

a Evaluation

This objective stipulates that the management of freshwater resources must be undertaken in such a way that the social, economic and cultural wellbeing of people and communities are considered, as well as their health and safety.

The following table provides an evaluation of this objective.

Table 2: Evaluation of Objective 1

b Summary

Objective 1 is considered to be appropriate for achieving the purpose of the Act as it specifies that management of freshwater resources must occur in a way that allows people and communities to provide for the wellbeing of areas outlined in section 5 of the RMA.

Objective 2 – Ensuring integrated management of effects on fresh water

To ensure effective integrated management (including by the co-ordination and sequencing of Land-use Development with investment in infrastructure for supply, storage and distribution of fresh water) of the effects of Land-use Development and discharges of contaminants on the quality and available quantity of fresh water.

a Evaluation

This objective aims to ensure that the management of effects of land-use development and discharges of contaminants is integrated. This implies that multiple land uses and contaminant discharges are considered under an integrated management framework.

The following table provides an evaluation of this objective.

Table 3: Evaluation of Objective 2

b Summary

Objective 2 is considered to be appropriate for achieving the purpose of the Act as it specifies that the effects of land-use development and discharges of contaminants on freshwater resources should be managed in an integrated manner. This objective is consistent with the values of kaitiakitanga and also of enhancing the relationship Māori have with their taonga. This is also appropriate in terms of sustaining the life-supporting capacity of this natural resource.

Objective 3 – Improving the quality of fresh water

To ensure the progressive enhancement of the overall quality of Freshwater Resources, including actions to ensure appropriate Freshwater Resources can reach or exceed a swimmable standard.

a Evaluation

This objective refers to an 'enhancement of the overall quality' of fresh water. The term 'overall' implies that the focus is on improving the quality of New Zealand’s collective freshwater resource.

The reference to appropriate resources being able to 'reach or exceed' avoids the potential interpretation that a swimmable standard is a capped objective. It provides for water which may have uses and values requiring a higher quality than this standard.

No timeframe is specified in the use of the term 'progressive', which recognises the significant challenges involved and the fact that there will be multiple solutions and many stakeholders, all of which will involve time.

The following table provides an evaluation of this objective.

Table 4: Evaluation of Objective 3

b Summary

Objective 3 is appropriate for achieving the purpose of the Act because an overall enhancement of the quality of New Zealand’s freshwater resources is consistent with achieving sustainable management. The use of the term 'overall' may need to be reconsidered as it could potentially divert attention away from addressing waterways with existing low water quality. This risk is also increased when Objective 3 is taken in conjunction with Objective 5, which states that further degradation should be avoided. There is the possibility that those freshwater resources that are most degraded may be placed in the 'too hard basket', but overall the objective itself is clear, and will meet the purpose of the Act.

Objective 4 – Recognising and protecting life supporting capacity and ecological values

To ensure the life supporting capacity and ecological values of Freshwater Resources are recognised and protected from inappropriate –

1. taking, use, damming or diverting of fresh water; and
2. Land-use Development; and
3. discharges of contaminants.

a Evaluation

This objective aims to protect the life-supporting capacity and ecological values of freshwater resources. The term 'ecological values' is not defined in the proposed NPS or in the Act, but it is included in the definition of 'notable values' included in the proposed NPS. It is unclear how ecological values may differ from life-supporting capacity.

The following table provides an evaluation of this objective.

Table 5: Evaluation of Objective 4

b Summary

Objective 4 is appropriate for achieving the purpose of the Act.

Objective 5 – Addressing freshwater degradation

To control the effects of Land-use Development and discharges of contaminants to avoid further degradation of Freshwater Resources.

a Evaluation

This objective aims to protect freshwater quality from further degradation. Two specific activities are focused on: land-use development and the discharge of contaminants. Note that the objective does not aim to address existing causes of water-quality degradation specifically, but this will come into play as permits expire and are re-consented, and if regional councils choose to use section 128(b) when any new rules regarding water become operative. However, new controls on land-use development may have an impact on permitted land uses, or consented ones if they propose any changes.

The objective does provide a strong focus on the impacts of land use on degraded fresh water, and from this perspective is likely to provide strong direction to district and regional councils that increased emphasis on controlling land use is required. Discharges are reasonably well controlled at present, and the impact of the NPS will be to recognise the importance of discharge control at a national level, with a specific focus on avoiding further degradation of water quality.

The following table provides an evaluation of this objective.

Table 6: Evaluation of Objective 5

b Summary

Objective 5 is largely appropriate for achieving the purpose of the Act. Although there is nothing in the proposed objective that makes it inconsistent with the purpose of the Act, there is some doubt as to whether it is the most appropriate. There are clearly many different tools available to achieve this objective. One concern with the objective in its current form is its exclusive focus on future land-use development without having any regard for current patterns of land use. It is clear from preceding discussions that previous land-use activities are substantially responsible for the current situation of degraded freshwater resources. Although Objective 3 does identify the need for progressive enhancement of water quality, it does not specifically refer to land use as a predominant cause of degradation.

On balance, however, it is concluded this objective is the most appropriate for achieving the purpose of the Act. This objective, like all of the other objectives, omits any explicit aim to address existing causes of freshwater degradation, but this aim can be seen as being implicit given the powers councils have under section 128(b). It can also, over time, address current practices as changes are sought to existing consents, intensification is proposed, and consents expire and come up for review, but this will clearly take a longer and undefined time period in which to achieve significant environmental improvements.

Objective 6 – Managing demand for fresh water

To ensure that demands (including social, economic and cultural demands) for fresh water are sustainably managed in a manner that has regard to the following:

1. available supply of fresh water:
2. the need to provide for resilience against the biophysical effects of climate change (such as through infrastructure for supply, storage and distribution of fresh water):
3. the adverse effects that arise from those demands.

a Evaluation

This objective states that water should be used in a sustainable manner, which has regard to the supply available and the adverse effects that arise from the take of water. This requires consideration of both the existing availability as well as the future supply available under a changing climate.

The following table provides an evaluation of this objective.

Table 7: Evaluation of Objective 6

b Summary

Objective 6 is appropriate for achieving the purpose of the Act because it addresses all seven elements of the purpose.

Objective 7 – Efficient use of fresh water

To ensure that allocated fresh water is used efficiently particularly in terms of the following:

1. avoiding wastage:
2. avoiding excessive contamination:
3. facilitating opportunities to increase benefits from the use of fresh water.

a Evaluation

This objective recognises that there is the potential for water to be allocated in a manner that is potentially not sustainable. That can be as a result of the inefficient use of water, creating waste, or foregoing the opportunity to put water to a more efficient use at some future point.

The aim of this objective is therefore to guide regional councils to ensure water is used more efficiently. This will require councils to allocate water efficiently, based on knowing water takes and not over-allocating in a specific catchment or aquifer. A greater focus on ensuring security of supply will also be required. This will require all councils to have clearer information on how much water is being used, although many regional councils do have good information already. Water takes can result in contamination of waterways, and the objective aims to ensure excessive contamination does not occur through inefficient allocation of water.

The following table provides an evaluation of this objective.

Table 8: Evaluation of Objective 7

b Summary

Objective 7 appears to be an appropriate means to achieve the purpose of the Act. The importance of managing water allocation is identified in the Act, and this objective will enable decisions to be made which allow sustainable management of the water resource, with particular regard to future generations.

Objective 8 – Iwi and hapū roles and Tangata Whenua Values and Interests

To ensure that iwi and hapū are involved, and Tangata Whenua Values and Interests are identified and reflected, in the management of Freshwater Resources including the matters specified in Objectives 1–7.

a Evaluation

This objective recognises the important relationship that tangata whenua have with fresh water, and that their involvement in resource management is entirely appropriate alongside those authorities with statutory responsibly for water and land management under sections 30 and 31 of the Act.

The following table provides an evaluation of this objective.

Table 9: Evaluation of Objective 8

b Summary

Objective 8 is consistent with the values of kaitiakitanga and with enhancing the relationship of Māori with their taonga. This objective is also considered to be the most appropriate means to achieve the purpose of the Act.

Objective 9 – Ensuring effective monitoring and reporting

To ensure that regional councils and territorial authorities undertake effective monitoring and reporting of the matters specified in Objectives 1–8.

a Evaluation

Monitoring and reporting at national, regional and local levels are critical tasks.

b Summary

Although this objective is not evaluated against the requirements of section 5 of the Act in detail, it is considered to be an appropriate means to achieve sustainable management. The objective is considered to be highly appropriate and most important, as it will provide the community and decision-makers with valuable information on progress towards the matters outlined in Objectives 1–8. Monitoring and reporting is a well established principle of resource management practice in New Zealand, and is wholly consistent with the participatory and democratic ethos of the Act.

5.3 Evaluation of the policies

5.3.1 Policies 1, 2 and 3

Policy 1

By the second anniversary of the date of commencement of this National Policy Statement, every regional council must notify, in accordance with Schedule 1 of the Act, a proposed regional policy statement or variation to a proposed regional policy statement or change to its operative regional policy statement in order that as soon as practicable thereafter every regional policy statement specifies objectives, policies and methods which –

1. Determine and timetable priorities for when regional plans will set Freshwater Quality Standards and Environmental Flows and Levels for all Freshwater Resources of the region; and
2. Identify Notable Values (including potential values) of –
   1. Any Outstanding Freshwater Resources; and
   2. Any Degraded Freshwater Resources; and
3. In accordance with Policy 1(a) and (b), guide and direct the setting in regional plans for all Freshwater Resources of the region of –
   1. Freshwater Quality Standards; and
   2. Environmental Flows and Levels;
   including for the protection of Notable Values of any Outstanding Freshwater Resources and the enhancement or restoration of Notable Values of any Degraded Freshwater Resources; and
4. Guide and direct local authorities as to the involvement of iwi and hapū in the management of, and decision-making regarding, all Freshwater Resources of the region, including but not limited to, requiring local authorities to disclose how they are intending to achieve this involvement; and
5. Identify Tangata Whenua Values and Interests in respect of all Freshwater Resources of the region; and
6. Guide and direct regional and district plans (including considerations for the determination of resource consent applications and notices of requirement) in relation to the recognition of Tangata Whenua Values and Interests in respect of all Freshwater Resources of the region; and
7. Guide and direct regional plans (including considerations for the determination of resource consent applications) to restrict existing takes, uses, damming and diversion of fresh water in order to sustain Notable Values and non-consumptive Tangata Whenua Values and Interests in times of low flow; and
8. Guide and direct regional and district plans (including considerations for the determination of resource consent applications and notices of requirement) to effectively manage Land-use Development and discharges of contaminants to control the adverse effects of the discharge of contaminants into fresh water or onto or into land in circumstances where contaminants may enter fresh water; and
9. Guide and direct regional and district plans (including considerations for the determination of resource consent applications and notices of requirement) to manage demands for fresh water, including demands arising from Land-use Development and discharges of contaminants, in a manner which –
   1. Provides certainty to communities and water users (including as appropriate through prioritisation of allocation for takes of fresh water for reasonably foreseeable Consumptive Use); and
   2. Provides priority for reasonably foreseeable domestic water supply, over other competing demands, provided that appropriate demand strategies are established for such supply; and
   3. Promotes efficient Freshwater use (including through the transferability of resource consents, where appropriate); and
   4. increases resilience to the effects of climate change; and
   5. ontrols adverse effects; and
10. Guide and direct regional and district plans (including considerations for the determination of resource consent applications and notices of requirement) to ensure integrated management of the effects of Land-use Development –
    1. by encouraging co-ordination and sequencing of infrastructure for supply, storage and distribution of fresh water; and
    2. by controlling adverse effects (including associated discharges of contaminants) on the quality and available quantity of Freshwater Resources.

Policy 2

Every regional council must –

1. By the date or dates specified in the regional policy statement, notify a proposed regional plan, change or variation, to set Freshwater Quality Standards and Environmental Flows and Levels for the Outstanding, Degraded and other Freshwater Resources of the region to give effect to the regional policy statement in relation to the matters in Policies 1(a) to (c); and
2. By no later than 40 working days following the date a regional policy statement or change notified pursuant to Policy 1 is made operative, every regional council must notify a proposed regional plan, change or variation to give effect to the regional policy statement in relation to all other matters in Policy 1; and
3. By no later than 40 working days following the date a regional policy statement or change notified pursuant to Policy 1 is made operative, every regional council must notify a proposed regional plan, change or variation to include rules to achieve the following:
   1. Require that all water permits for the Consumptive Use of fresh water granted after the date of commencement of this National Policy Statement include conditions for the efficient Consumptive Use of fresh water including, as a minimum, providing for the use of industry good practice and technology to achieve efficient use:
   2. Require that all water permits for the Consumptive Use of fresh water granted after the date of commencement of this National Policy Statement include conditions for, where appropriate, the return of fresh water to Freshwater Resources, in order to achieve the requirements of paragraph (a) of this Policy:
   3. Require that all discharge permits affecting Freshwater Resources granted after the date of commencement of this National Policy Statement include conditions for –
      1. Protection against degradation of the quality of fresh water of Freshwater Resources (including through the management of activities giving rise to stormwater discharges); and
      2. Sustainable management of demands on fresh water in a manner which has regard to available supply of fresh water and adverse effects, both individual and cumulative; and
      3. Integrated management of the effects of Land-use Development and discharges of contaminants on the quality and available quantity of Freshwater Resources;

      to be achieved, as a minimum, by the use of industry good practice:

   4. Require effective monitoring and reporting on matters relating to paragraphs (c)(i), (ii) and (iii) of this Policy.

Policy 3

By no later than 40 working days following the date a regional policy statement or change notified pursuant to Policy 1 is made operative, every territorial authority must notify a proposed district plan, change or variation in order that as soon as practicable thereafter every district plan –

1. Gives effect to the regional policy statement; and
2. ncludes rules to require that all relevant land-use and subdivision consents granted after the commencement of this National Policy Statement include conditions for –
   1. Protection against degradation of the quality of fresh water of Freshwater Resources (including through the management of activities giving rise to stormwater discharges); and
   2. Sustainable management of demands on fresh water in a manner which has regard to available supply of fresh water and adverse effects, both individual and cumulative; and
   3. Integrated management of the effects of Land-use Development and discharges of contaminants on the quality and available quantity of Freshwater Resources; and

   to be achieved, as a minimum, by the use of industry good practice; and

3. Includes rules to require that all relevant land-use and subdivision consents granted after the commencement of this National Policy Statement include conditions to require monitoring and reporting on matters relating to paragraph (b).

Policy 1 is the most substantial of all the nine policies. Policies 2 and 3 require regional councils and territorial authorities to give effect to Policy 1 through changes to regional and district plans (respectively). This cascading series of changes and requirements is relatively complex, and there is considerable overlap between a number of the policies. For this reason it is simpler to evaluate Policies 1, 2 and 3 together.

Many of the policies are particularly complex and introduce many new terms. However, there are two key elements to be assessed in Policies 1–3: the costs and benefits of making the proposed changes, and the costs and benefits of the proposed amendments once they are implemented.

a Evaluation

Policy 1 directs regional councils to change their existing regional policy statements to give effect to the proposed NPS within two years of the commencement of the NPS. Policy 2(a) requires regional councils to change their regional plans within a time defined in the regional policy statement to give effect to the matters in Policy 1(a) to 1(c). Policy 2(b) directs regional councils to change any existing regional plans to give effect to the revised regional policy statement within 40 working days of that regional policy statement amendment being made operative. Policy 3 directs territorial authorities to change any existing district plans to give effect to the revised regional policy statement within 40 working days of that regional policy statement’s changes being made operative.

There are two key aspects of making the required changes to regional and district planning provisions: the costs incurred in going through the statutory requirements under the Act, and the collection of technical and community information required to inform the changes.

Policy 1 (and the entire NPS) contains four important terms relating to different types of freshwater resources:

• degraded freshwater resources

• outstanding freshwater resources

• freshwater resources

• tangata whenua values and interests.

Underlying the definition of these terms is the concept of 'notable values', which includes scientific, ecological, biodiversity, cultural and recreational values. To implement Policy 1, regional councils would need to identify the freshwater resources that were considered to be degraded and outstanding. They would also need to work with local iwi and hapū to identify tangata whenua values and interests, and to review and update existing iwi and hapū planning documents.

Costs of collecting information

Some of the technical information would already be available, but it is expected that most councils would need to collect further information – which would incur a cost, estimated to be in the order of two full-time equivalent staff per regional council. It would be expected that some guidance and resourcing from the Ministry for the Environment would be provided, at an estimated cost of $250,000. A wider range of groups would also be involved in the identification and assessment of freshwater resources, including the Department of Conservation, landowners, iwi and recreation groups. Through their involvement these groups would likely incur financial and time costs.

The main requirement on collecting information for the amendments would fall on regional councils, but it is likely that district councils would also have to undertake some information collection. In particular, the emphasis on the integration of land use and freshwater management means that district councils would likely work alongside regional councils. For the purposes of this evaluation, this cost has been estimated at one additional full-time-equivalent per district council for one year.

Costs of making statutory plan changes

The cost of undertaking the statutory plan change process is likely to be variable, and will depend on factors such as the degree of change required by a council to give effect to the NPS and the size and nature of the geographical area under the jurisdiction of the council. The estimates given assume that regional councils will have to undertake a more substantial plan change than territorial authorities. Regional policy statement changes and hearings associated with them will be undertaken first. Costings then assume that where regional councils are required to make changes to regional plans (under Policies 1 and 2), this will be conducted under a single process, with a combined notification and hearing procedure, etc.

It is assumed that processes to give effect to policies at a regional and territorial level will not be combined, although there may be opportunities for this to occur in some cases. It is also assumed that all councils will initiate a completely new plan change to give effect to the proposed NPS. That is, existing plan changes or second-generation policies and plans currently being developed have been discounted. This means the figures provided in this evaluation represents the worst-case scenario, and in reality opportunities will likely exist for the cost to councils to be reduced.

It is estimated that the costs would be $4 million to regional councils and $10.1 million to territorial authorities. With staff costs included, this gives a total financial cost of Policies 1−3 of $30.6 million to regional councils and $37.3 million to territorial authorities. All further costs and benefits associated with Policies 1−3 will derive from the implementation of the proposed policies.

Costs of identifying tangata whenua values and interests

A significant amount of investigative work will be required to identify tangata whenua values and interests. It could be expected that resourcing of further documents and reviews of current iwi and hapū planning documents will be required. Regional councils currently do not have the internal capacity to carry out this work, nor are they mandated to by iwi. It is expected that some of the costs will fall on iwi and hapū, who generally have small, sometimes voluntary, environmental teams. The NPS will also increase pressure on tangata whenua to provide timely advice and appropriate information to be utilised within the regional policy statements. Provision of support may be needed for iwi and hapū to meet these requirements. Support may be by way of memoranda of understanding, education programmes, and direct resourcing for the development of relevant regional policy statement objectives, policies and methods that are applicable to tangata whenua.

Although there are clear sections in Policy 1 that work to enable Māori involvement, implementation lies with regional councils. Further work is needed to address how best these sections will be implemented so that they are actually providing decision-making powers to tangata whenua. Capability will need to be built in regional councils for information about tangata whenua values and interests to be used appropriately and meaningfully to meet the objectives.

This process will result in benefits, particularly through building long-term relationships, which will help reduce the substantial compliance costs of managing relationships between applicants, councils and tangata whenua. Māori involvement in the development of changes to the regional policy statements and regional and district plans, regarding freshwater quality standards and environmental flows under the NPS, will enable iwi and hapū involvement in management and decision-making regarding freshwater resources, thus ensuring their concepts and values (such as giving effect to or restoring the mauri of waterways) are part of the water management framework. Through Policy 1, greater understanding and recognition of tangata whenua values and interests in fresh water will be communicated, allowing the wider community to better comprehend the perspectives of tangata whenua and add value to stakeholder relationships and tangata whenua in the wider community.

Costs of implementation

Once degraded and outstanding freshwater resources have been identified, councils are required to use freshwater quality standards and environmental flows and water levels to protect outstanding freshwater resources and enhance or restore degraded freshwater resources. How this will be implemented by councils is likely to vary and may, in some cases, not result in any substantial change from the status quo. The identification of freshwater resources as being either degraded or outstanding by councils will effectively determine the degree of change from the status quo that will be required. In regions where flow and water levels are not substantially different from current standards, the change from the status quo is likely to be minimal.

An important assumption underlying the assessment of costs and benefits is that the implementation of the proposed NPS will not result in the setting of standards that are lower than at present: it is assumed that standards will either not change or will be higher than at present. This is a reasonable assumption to make given that the NPS will strengthen the mandate to address water quality and water quantity issues in resource management processes, and will not result in any change in the legislative mandate. In effect, it introduces an additional set of provisions, without altering the existing legislative mandate for managing freshwater resources currently provided by Part II of the Act.

Policies 1−3 aim to improve the quality of degraded freshwater resources and protect outstanding freshwater resources. These two categories are based on scientific, ecological, biodiversity, cultural and recreational values (known as 'notable values'). The improvement and protection of these respective categories of freshwater resources is to be achieved through the use of freshwater quality standards and environmental flows and water levels would result in costs to some parties and benefits to others. It is important to be clear about the nature of these two terms. 'Freshwater quality standards' refers to any rule (in a regional or district plan) that gives effect to the NPS. 'Environmental flows and water levels' also refers to rules, but only in relation to the allocation of water for consumptive use.

Once revised provisions are in effect (these must be notified within two years of the commencement of the NPS), work would be undertaken to improve degraded freshwater resources and protect outstanding freshwater resources. What this would entail would be variable, but it would be expected that activities and land uses that were making significant contributions to degraded water quality would be identified as plan requirements change, consents are renewed, or land owners change the nature of their activity and trigger requirements for consents under the new regime imposed by the NPS. The costs of implementation are therefore likely to be spread across various groups, including councils, landowners, consent holders and others.

Costs to individuals and groups degrading water quality

Current causes of degraded water quality are predominantly agricultural run-off, unrestricted stock access to waterways, leaching of nutrients and agrichemicals into waterways and groundwater, industrial point-source discharges, and urban stormwater run-off. These areas will be the focus of efforts to improve water quality. Economic costs will therefore primarily be incurred by individuals and groups whose activities are degrading water quality. Costs are likely to be incurred through improved discharge treatment standards, improved nutrient management, increased riparian planting and the exclusion of stock from waterways.

These costs will not be borne equally across the agricultural and industrial sectors, but will be incurred largely by those causing the damage. In the agricultural sector, for instance, some progress has already been made under the Dairying and Clean Streams Accord. Regional council advocacy programmes, such as that of the Otago Regional Council, have achieved some good results. This means that those agricultural and industrial water users already engaging in good practice may not be affected by increased water quality standards. The main group affected by the introduction of new provisions into regional and district plans would be those who continue to engage in 'unsustainable' practices. The cost of implementing improvements to practice and infrastructure are likely to be incurred directly by landowners and businesses, in the cases of agriculture and industry, respectively.

In the case of agriculture, this may result in some level of decreased productivity of agricultural land. A report by Harris Consulting (2008) commissioned by Ministry of Agriculture and Forestry estimates that most primary sectors should be able to reduce contaminated discharges by 10 per cent, and that this may meet generalised water standards. The report estimates that measures to ensure a 10 per cent reduction would cost the land users between $0 and $5,500 for each dairy farm, $1,000 to $3,000 for each sheep farm, and $10,000 for each high-country farm. Reductions in contaminated discharges of 30−40 per cent, which are estimated to be needed to protect outstanding or sensitive water bodies, would have significant costs for landowners, with estimated annual costs of $15,000 for relevant smaller dairy farms, $35,000 for larger dairy farms, and $5,000 to $25,000 for sheep, beef and deer farms.

The Harris Consulting report estimates that an 80 per cent reduction in microbial discharges is needed to meet contact recreation standards in most water bodies, and this will not be achieved without significant costs and land-use changes. The NPS therefore has significant implications for landholders in the primary sector, but the nature and extent of the impact are heavily dependent on how it is implemented by councils.

For industrial activities, increased investment in infrastructure may be required to improve the quality of discharges from sites. This cost is likely to be a one-off in most cases, although it may have an ongoing component. It should also be noted that the majority of industrial discharges are point source and have usually been well controlled under the discharge provisions of the Act.

Costs associated with the improvement of urban stormwater would be incurred by territorial authorities, and these costs are ultimately covered by ratepayers. Methods to improve discharges would include improved discharge treatment, riparian planting and wetland restoration, and public education programmes, as well as improved approaches to town planning and developments such as low-impact design.

Economic benefits

The greatest economic benefit will probably stem from the maintenance and enhancement of New Zealand’s clean green international image, which has been conservatively estimated to be worth $1,000 million per annum.⁷ Two of the country’s most important sectors – agriculture and tourism – derive immeasurable benefit from this international image. In a global marketplace where consumers are becoming increasingly conscious of the environmental impact of the production and transport of goods, the influence of this image should not be underestimated. Although freshwater quality is only one aspect of the environment, it is an important part of the clean green image.

Other economic benefits would be derived from decreased water treatment costs in areas where drinking-water is sourced from degraded catchments. This will primarily benefit those organisations responsible for drinking-water supply (typically regional or district councils). The cost of water-borne disease in New Zealand has been estimated at $25 million per annum (Cowie and Nokes, 2006). Improved water quality will also benefit industrial and agricultural water users, particularly where water is used in food manufacturing processes or for stock drinking-water.

Social and health benefits

The improvement of water quality will have social and health benefits to the users of rivers and lakes, and may have some tangible benefits in terms of reduced costs to the health system from water-borne disease. Tait and Cullen (2006) note that levels of campylobacter are significantly higher in rural water bodies than in non-rural water bodies. Rates of campylobacter infection notification have increased from 14 cases per 100,000 in 1981 to 396 cases per 100,000 in 2003 (ESR, 2005).

Further social benefits may be derived from an increase in public awareness about the importance of water to our quality of life. This is likely to be achieved through the recognition of fresh water as an issue of national significance. The NPS process, including the public submission process, is likely to achieve this as a wider range of individuals and groups become involved in freshwater management.

Ecosystem benefits

The primary benefit to the environment will be through an improvement to freshwater ecosystems. The bio-physical characteristics of water have a significant influence on the ability of a system to sustain aquatic species. This includes not only species living in fresh water, but also species living in and around the margins of fresh waters. Although the focus of the NPS is on the quality of the water itself, some of the likely measures would have benefits beyond the waterway.

For instance, the riparian planting of waterways in urban and rural areas can help to create valuable ecological corridors that can have a significant benefit far beyond the waterway itself. There are also well-documented well-being benefits to people from having green cities and towns, for example.

Cultural benefits

Improved water quality, and the benefits for related ecosystems, will provide a number of significant cultural benefits. These relate to Māori cultural values and the values New Zealand society as a whole places on water. For Māori, water holds particular importance because of its life-giving essence. Water is a prominent feature of Māori mythology and the Māori world view. It holds special significance as a food source (mahinga kai), transport route and resource for future generations.

Cultural benefits would not only be limited to Māori. As a country with many freshwater settings, water is an important part of New Zealand’s identity and history. As such, improvement to the quality of fresh water will provide a cultural benefit to many New Zealand communities. Many people remember swimming in various locations around New Zealand in their youth, and improving degraded waterways will provide cultural benefits to many people in this situation.

It is important to note that the identification of tangata whenua values and interests may also have some cultural costs for tangata whenua, as information of this nature can be culturally sensitive and hold great meaning to tangata whenua. Provision of this information to the public arena will have to be carefully considered by Māori. There are also concerns among Māori that tangata whenua values and interests may not be given a high enough priority when balanced against other issues of natural interest. Also, the ranking of the importance of waterways is of

concern to Māori because all are considered significant and valid to each hapū and iwi. It is important that a flexible approach be adopted for identifying tangata whenua values and interests to reflect tribal and hapū differences.

Costs and benefits for environmental flows and water levels

An important tool in Policies 1−3 is the establishment of environmental flows and water levels in lakes, wetlands and groundwater aquifers. A number of factors need to be considered when determining minimum water levels, including sustaining freshwater ecosystems, amenity and cultural values, and foreseeable land-use changes. Closely related to environmental flows and water levels is a proposed NES on Ecological Flows and Waters Levels and a proposed NES on the Measurement of Water Takes. The NES for Ecological Flows and Waters Levels refers solely to ecological characteristics, which form part of a broader 'environmental flow' that also incorporates social, economic and cultural considerations. The NES for the Measurement of Water Takes outlines standards for the measurement of the abstraction of water (known as water takes). These proposed NES are standards that will complement environmental flows and water levels.

In determining the costs and benefits of environmental flows and water levels, there is an assumption that in the majority of cases environmental flows will be established that are the same or greater than at present, meaning there will be the same or less water available for consumption. Reduced availability of water for consumption will predominantly occur in systems where water is already abstracted to levels that have negative ecological, social and cultural consequences. It is reasonable to assume, therefore, that overall, stronger provisions for imposing environmental flows will result in reduced levels of water for consumption.

The main economic costs incurred by the introduction of environmental flows will be for those who currently take and use fresh water in significant volumes. This category covers three main groups: local government taking water for domestic water supply; the agricultural sector taking water for irrigation and stock drinking-water; and other industry taking water for industrial processes.

The other main activity using fresh water is the hydroelectricity sector, although it should be noted that hydroelectric generation does not actually involve the taking of water as such. Rather, it involves making major changes to environmental flows at any given point in a system and at any given time during the year.

It is possible that environmental flows and water levels could have some impact on hydroelectric generation. Many hydroelectric schemes have minimum environmental flows as part of their operating conditions, but there could be some changes to specific flow rates if minimum flow rates are increased as a result of ecological research and higher community-determined standards. In cases where minimum environmental flows are increased, this may mean that less water is able to be stored for generation. This could decrease the resilience of the generation network, in some circumstances, and ultimately increase electricity prices in those cases. However, such events are only discussed as possibilities rather than certainties.

There is the potential for a reduced amount of water to be available for domestic use. The economic cost of this is unclear, although the social cost in terms of imposing water restrictions could be significant. Many urban and rural areas in New Zealand currently experience water restrictions at certain times of the year. The frequency of these restrictions may increase if environmental flows and water levels are introduced that reduce the amount of water able to be taken. Exactly how this will affect agricultural productivity will vary on a case-by-case basis and is impossible to quantify. It is not expected, however, that agricultural production will be significantly reduced. Those agricultural producers who are most likely to be affected are either those on highly marginal land or those who are currently using water in a highly inefficient manner.

If agricultural production were to be reduced in a certain area, a subsequent reduction in agribusiness and changes to the social fabric of the rural townships is possible. Conversely, the promotion of increased water efficiency could stimulate research into, and development of, water-efficient technologies, providing an economic benefit. Similarly, the increased use of environmental flows may create more pressure for the development of large water storage and distribution schemes. This is because these schemes can help overcome issues with water shortages during extended periods of drought by effectively enabling the transfer of water from periods of excess to periods of shortage. Such schemes can also help increase resilience to the impacts of climate change in terms of reduced overall rainfall and increased variability in rainfall in some areas.

The more widespread use of environmental flows and water levels will ultimately improve freshwater ecosystems. This will be through increased in-stream flows and the protection and regeneration of groundwater systems. These benefits will be widespread. As discussed previously in relation to water quality, it will contribute to the maintenance and enhancement of New Zealand’s clean green image.

The social benefits of improved aquatic ecosystems and increased environmental flows are improved angling and food-gathering (including mahinga kai) opportunities and recreational opportunities. The cultural benefits of improved environmental flows are significant, and will recognise the importance of healthy freshwater systems to Māori. The policy also benefits all New Zealanders by recognising that water is an important aspect of our national identity.

b Summary

Table 10 provides a summary of the costs and benefits of Policies 1−3. Overall, it is considered that the policies would be effective at achieving many of the objectives, notably Objectives 2, 3, 4 and 5. They would also be relatively efficient, with the benefits outweighing the costs. The costs are likely to be borne mainly by those contributing to degraded water quality or using water in an inefficient manner, as well as local and central government. The benefits are more widely distributed, and largely address many of the negative impacts of degraded water quality and insufficient environmental flows currently borne by society as a whole.

Table 10: Costs and benefits of Policies 1, 2 and 3

View costs and benefits of Policies 1, 2 and 3 (large table).