4.0 Economic Instruments and the RMA
Section 32 of the RMA specifically requires that local authorities consider alternative ways of achieving the sustainable management of natural and physical resources. Section 32 is intended to promote selection of the most efficient and effective means of achieving environmental objectives. In certain situations economic instruments are a valid alternative which may indeed be the most efficient and effective means of achieving those objectives. It should also be noted that section 7(b) of the act requires councils to have regard to "the efficient use and development of natural and physical resources."
The RMA specifically allows the use of certain economic instruments, including:
- financial contributions, works and services to offset environmental impacts;
- non-compliance fees or fines imposed by the Courts;
- bonds to ensure conditions on resource consents are complied with;
- transferable development rights; and
- transferable coastal and water permits, if provided for in regional plans.
The imposition of environmental taxes by regional or district councils is not sanctioned by the RMA. Levying and taxation powers are limited to those provided under the Rating Powers Act 1988. Differential rating cannot be targeted more specifically than for categories of property use and may have limited potential for the accurate recovery of environmental costs. Any environmental taxes are therefore likely to be imposed at a national level. An example would be the imposition of a national carbon tax designed to encourage a reduction in carbon dioxide emissions. [Note this is an example, and does not represent or imply any particular Government policy.]
Although economic approaches based on transferable permits are clearly sanctioned by the RMA, there has been limited experience in their use. In addition to the general constraints on the use of economic instruments identified in the introduction, sections 134 to 137 of the Act set some limits on the transfer of permits or consents. Constraints are imposed to protect third party rights or to control environmental effects. These constraints include:
- coastal permits can only be transferred between sites if allowed in a coastal plan (s 135);
- water permits can only be transferred to another site within the same catchment area, if allowed by a regional plan or a resource consent (s 136); and
- discharge permits are tied to the site for which they were granted (s 137).
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