6  Property rights to the environment in New Zealand

The most prominent example of the definition of new or redefined private property rights to natural resources of the environment in New Zealand is fisheries. Defined transferable fishing rights were created (see below for details) in response to the tragedy of the commons, discussed above, where competition for a scarce common resource resulted in depletion as no one had a secure property right in future use. Other rights discussed below are for pollution, radio frequency spectrum, water, minerals and land.

6.1  The Resource Management Act

As noted in Section 4.1, it can be argued that “when changes (in externalities) take place or new ones are recognised, the system of property rights is no longer efficient and efficacious” (Johnson, 1992, p172). The main vehicle for adjusting property rights in New Zealand is the Resource Management Act 1991 (RMA) through the preparation of national policy statements and regional and district plans, and their application by regional councils and territorial authorities to requests for consents to build on or otherwise use land.[39]

These statements and plans, and the way they are applied act to constrain, enforce and modify property rights in land. Those modifications are not compensable. With regard to the concept of takings noted in Section 4.3, the RMA explicitly states that plan provisions are deemed not to have taken or injuriously affected interests in land unless the Act explicitly says so (Ryan, 1998). This is effectively parliament contracting out, through statute, from the application of a takings approach to land use regulation.

Another perceived consequence of the RMA in New Zealand, according to anecdotal evidence, is that those potentially affected by a resource consent can seek compensation from landowners in order to not lodge or to withdraw an objection to the consent. Such a situation would effectively be recognising a property right by the neighbour in the consent.

The RMA makes only limited reference to market-based instruments (MBI) to achieve reductions in externalities, but “is silent on whether regional councils are authorised to use economic instruments” and “precludes the use of tradable instruments in point sources of air and water pollution” (Sharp, 2002, p57). It may not therefore provide sufficient authority for councils to develop the necessary processes to support MBI approaches generally. Section 5 illustrated that such approaches offer significant advantages in the right circumstances in terms of achieving environmental and conservation goals at minimum cost while Section 4.4 discussed the required institutional support to make them work. The relevance of MBI to water use is discussed further in Section 6.3.[40]

6.2  Pollution control

New Zealand does not currently use economic instruments to deal with general pollution issues. Smog in Christchurch is addressed by restrictions on wood and coal burning, while chlorofluorocarbons (CFCs) are banned and the response to air pollution in Auckland is use of lower sulphur fuel than is available in the rest of the country. There is currently “no legal authority for regional councils or district councils to implement economic instruments to deal with air pollution” (Sharp, 2002, p55).

Climate change policy is still under development. The Government’s proposed package announced in October 2002 involves (1) an emissions charge on fossil fuels and industrial process emissions with revenue recycling (and an option for emission trading), (2) incentives for defined reductions in greenhouse gas emissions, (3) Negotiated Greenhouse Agreements where firms and industries with a significant competitiveness risk commit to best practice in managing emissions in return for exemption from an emissions charge, (4) initial exemption for the agricultural sector in exchange for investment in research on reducing agricultural emissions, and (5) Government retention of sink credits and associated liabilities allocated to New Zealand in recognition of the carbon sink value of post-1990 forest plantings and Government liability for deforestation up to a cap. The RMA will be amended to remove regional councils' ability to directly control greenhouse gas emissions through resource consents and regional plans.