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Proposed National Environmental Standards for Air Quality Resource Management Act Section 32

Executive Summary

1 Introduction

2 Statement of the Issue

3 What are the Options?

4 The Proposed Air Quality Standards

5 Efficiency and Effectiveness of the National Environmental Standards for Air Quality Package

References

Appendix 1: Design Standard for Woodburners - Costs and Benefits

Appendix 2: Council Plans and Proposed Activity Bans

Appendix 3: Cost Summary Spreadsheet

3 What are the Options?

3.1 Introduction

To deal with the air quality problems set out in section 3 and to achieve the stated objectives, a range of national policy options can be implemented, including education programmes, guidelines and guidance, monitoring and analysis, economic instruments, and command and control measures. Alternatively, the current status quo or 'do nothing' scenario can be followed if it will achieve the objectives.

The Ministry regularly reviews and implements tools that are considered to be the most appropriate to improve air quality, and to increase the consistency and quality of decision-making. Since the introduction of the RMA, the Ministry has focused on providing guidance and guideline values. The Ministry has published two sets of guidelines, one in 1994 and an update in 2002. These can be applied by councils through regional plans and decisions on resource consents, and by central government through policy and regulation.

While some improvements are occurring under this framework, there continue to be significant air quality issues and health effects requiring attention, particularly fine particle concentrations in many urban areas during winter months. And while concentrations of CO from vehicles appear to be declining, other contaminants, such as NO₂ and O_3, seem to be increasing or have the potential to increase.

Several regional council plans aim to achieve improvements over the next 10 to 20 years, but in other places limited action has been taken to improve air quality. Central government also has a significant role to play in reducing vehicle emissions, and while policies to address these have been slow in coming they are gaining momentum. The Ministry of Transport has recently announced a series of measures to reduce emissions from vehicles, such as quality assurance for imports and emissions screening/testing. The Ministry for Economic Development has also introduced regulations on fuel specifications (especially sulphur in diesel).

3.2 Determining the most appropriate option

In order to assess the most appropriate option for the air quality issue, the Ministry considered a list of potential options:

• do-nothing (the current status quo of guidance)
• delay, monitor and collate more data
• information and education
• voluntary agreements
• market-based tools (e.g. pollution taxes, tradeable permits)
• command and control tools (e.g. national standards, ban certain activities).

To evaluate these options against each other, an appraisal technique called 'multi-criteria analysis' (MCA) has been used. [For a more in-depth discussion of multi-criteria analysis, see The Multi-criteria Analysis Manual published by (the then) UK Department of the Environment, Transport and the Regions, http://www.odpm.gov.uk/stellent/groups/odpm_researchandstats/documents/page/odpm_research_608524.hcsp.] This appraisal technique enables the decision-maker to assess a range of options using criteria that extend beyond the conventional 'costs' and 'benefits' approach. The conventional appraisal approach relies on quantifying the impacts of a policy in monetary terms, whereas multi-criteria analysis enables a wide variety of criteria to be weighed against each other. In a recent report to the UK's Department for Environment, Food and Rural Affairs (DEFRA) the benefits of using multi-criteria analysis in the context of air quality policy (especially when combined with cost-benefit analysis) were expounded:

MCDA [multi-criteria decision analysis] can extend CBA [cost-benefit analysis] by effectively incorporating criteria that are difficult or impossible to monetise using CBA techniques. As applied to air quality policy options, MCDA can be used for appraisal against any set of important criteria ... (DEFRA, 2003)

For the current study a simplified MCA [Based on scoring each criterion relevant to its likely success or failure.] has been constructed based on a range of policy criteria (Perman et al, 1999). The criteria are shown in Table 3, together with the types of questions to consider in evaluating the specific policy instrument.

Table 3: Appropriate policy instrument criteria

Under the MCA system, a score of 0 to 10 was attributed to the criteria set out above. This score was based on how far the instrument goes towards achieving the required outcomes; for example, if the instrument was deemed to be achieving objectives at least cost, this would score 10. A maximum score for any policy instrument would be 90 (because there are nine criteria under consideration). Given that this system is a very much simplified MCA, no specific weighting was given to the criteria (i.e. equal weighting was used).

The following sections set out the key features of each option and their appropriateness for achieving the required aims and objectives.

3.2.1 Status quo (continued guidelines and guidance)

The Ministry has issued a series of guidance documents on air quality management covering dust, odour, degraded visibility, inventories, monitoring, dispersion modelling and emissions testing. There is limited further national guidance the Ministry could supply to councils, although some of these guides will need to be updated over the next couple of years. Guides and guideline values essentially assist regional instruments, but without the backing of regulatory enforcement.

This situation represents the status quo, and so far the necessary improvements and desirable consistency have not occurred under this approach.

3.2.2 Increased monitoring and analysis

Under this option there would be an increased programme of monitoring and analysis and reporting of data. This approach essentially continues and builds on the current approach in order to develop a much wider suite of data from which to build policy decisions in the future.

As a stand-alone option, therefore, this offers little benefit above the status quo apart from gathering additional information.

3.2.3 Information and education schemes

On their own, and in the absence of regulation, national environmental education schemes are unlikely to bring about the desired environmental outcomes and improvements in consistency in decision-making. Targeted campaigns may be effective, especially if the desirable behavioural change is also required by law, such as the drink-driving and speeding campaigns.

Further options in terms of education schemes could include more formal education and training programmes for air quality specialists and practitioners. However, training is currently available through some universities and the Clean Air Society of Australia and New Zealand. While training of practitioners would be useful for overall air quality management, it may not in itself (as a stand-alone option) bring about desirable air quality improvements without fixed targets. It would also be difficult to gauge its ability to improve consistency in decision-making and air quality improvements.

3.2.4 Voluntary agreements

Voluntary agreements are agreements between organisations, companies or sites, usually to reduce emissions over a preset time period. Voluntary agreements function most efficiently when they are undertaken by industrial sites or industrial groupings. The key focus, therefore, would be on industrial emissions rather than domestic heating and transport. However, current poor air quality in New Zealand is not generally caused by industrial emissions, so the opportunity for voluntary agreements is limited.

Such approaches have also been criticised for not 'setting the bar' high enough, because a low-cost achievable target may actually be less than the level of reductions required to improve air quality.

3.2.5 Economic instruments

Economic instruments cover a wide range of tools, and include taxes and charges, subsidies, and tradeable permits. Tradeable emission rights are better suited for reducing emissions from large industrial discharges, and do not lend themselves easily to addressing numerous small sources such as vehicles and home-heating fires.

Economic incentives, on the other hand, may work well. An example could be schemes to encourage the replacement of open fires and wood burners. There are currently no proposals for such a nationwide scheme, although some regional councils do currently offer incentives to convert to low-emission wood burners.

On their own, economic instruments are unlikely to achieve the desired certainty and consistency. They may, however, prove to be a useful tool used in combination with other methods to improve New Zealand's air quality.

3.2.6 Command and control (national standards)

Command and control approaches are regulatory tools whereby firm targets are set in legislation and there is a duty to meet them. Regulations have been proven to be effective at improving consistency and bringing about desirable outcomes.

National standards for ambient air quality set a base level for the air quality targets that all central and local government agencies responsible for managing air quality must achieve. They provide the targets for all agencies to achieve and thereby reduce inconsistencies. Implementing the standards rests with the regional councils, unitary and territorial authorities, although central government agencies such as the Ministry of Transport would remain responsible for improving vehicle emissions to ensure the standards are capable of being achieved.

The Minister for the Environment proposes a direct approach to standards for dioxins, by banning a range of activities that are major sources of dioxins and other toxics (see section 2.6 of this report). This is an efficient and effective way to deal with dioxin discharges from these sources.

The advantage of this type of approach is that there is certainty about what is to be achieved. Standards being national ensures that the benefits are spread evenly across New Zealand and the same level of protection is afforded to all New Zealanders.

The variety and flexibility of the available implementation tools (open to regional councils, for example) provides this option with opportunities to lower the cost of achieving the required standard. This option can still be used in conjunction with education programmes and economic instruments. In fact, it can be argued that a national standard is a requirement for economic instruments to be successful (in a cap-and-trade regime, for example).

3.2.7 Findings of the appropriateness test

The results of the MCA are shown in Table 4. This table sets out the average score for each option after scoring each criterion. It can be seen that the setting of national standards (a command and control approach) is the most appropriate option to take forward for a more detailed analysis.

Table 4: Results of the multi-criteria appropriateness test

Given the nature of the air quality problem (with emissions from a range of sources), it is unlikely that voluntary agreements will be effective. Education may go some way to reducing levels, but some form of legislation will be required to back this up (and education is needed to back up legislation). Market-based tools on their own may not achieve the necessary reductions, and should be viewed as a tool for achieving a pre-set reduction target (i.e. they may be best used as an implementation aid). The setting of national standards, therefore, offers a useful baseline to utilise other policy instruments (such as education and market-based tools). These other tools may also help to lower the costs of compliance with the national standards.

3.2.8 The call for national environmental standards

As further background to the national environmental standards option, a number of events have led to calls from stakeholders for the Ministry to consider the introduction of standards for air quality.

• At a series of public meetings held in mid-2002, business, councils and community groups called on the Ministry to get on with developing a national policy approach for air standards.
• A consultative process was held with regional councils to scope the policy programme needed to support a national approach.
• In May 2003 the Ministry for the Environment presented the concept of national environmental standards to regional council representatives. Feedback was positive.
• In November 2003 the Ministry for the Environment hosted a national roadshow to obtain further input from the community and key interest groups. Feedback at the roadshow meetings was largely supportive of the proposed national air standards.

3.2.9 Moving to the next stage in the analysis

Given the above tests, and taking into account calls from stakeholders, the national environmental standards option will now be taken forward for more detailed analysis. This is not to suggest that this is the only viable option, but it is the only option that meets the current stated objectives. There is still scope for the use of options such as economic instruments and education schemes to help in the implementation of the standards. As stated above, these alternative options require setting a baseline (i.e. a standard) in order to focus and measure their effectiveness.

Section 4 sets out the proposals (further detail can be found in the Ministry for the Environment's proposals document Proposed National Environmental Standards for Air Quality - Air Quality Report No. 46 (Ministry for the Environment 2003c)), while Section 5 analyses the costs and benefits of the standards package.