Proposed National Policy Statement for Renewable Electricity Generation Management: Section 32 Evaluation

Preface

Executive Summary

1 Introduction

2 The Status Quo

3 Alternatives to the Status Quo

4 Section 32 Evaluation Methodology

5 Evaluation of the Proposed National Policy Statement for Renewable Electricity Generation

6 Risks and Uncertainties

7 Conclusions

Appendix A: Estimate of Costs

 

4 Section 32 Evaluation Methodology

4.1 Introduction

The evaluation methodology was guided primarily by the RMA which requires an assessment of benefits and costs of all kinds.  There were two phases to the evaluation, as required by section 32: firstly, an evaluation of the appropriateness of the proposed NPS Objective in achieving the purpose of the Act; and secondly, an evaluation of proposed NPS policies focused on the benefits, costs, effectiveness, efficiency and risks of each individual policy.

It is worth stating specifically that a national viewpoint is adopted in the evaluation of both objectives and policies.  That is, the identification and assessment of costs and benefits is inclusive of not just central, regional and local government but it also considers specific costs and benefits relevant to particular ‘groups’ within the community and private sector interests, including generators.

The evaluation has attempted to clearly identify the procedural elements and the expected outcomes that distinguish the proposed NPS from the status quo.  The key element of this cost-benefit analysis is that it focuses on the differences between the status quo and the proposed alternative.

4.2 Evaluation of the Objective

The Objective is evaluated against the purpose of the RMA as set out in its section 5, being:

1. to promote the sustainable management of natural and physical resources.
2. In this Act, sustainable management means managing the use, development, and protection of natural and physical resources in a way, or at a rate, which enables people and communities to provide for their social, economic, and cultural wellbeing and for their health and safety while –
   1. Sustaining the potential of natural and physical resources (excluding minerals) to meet the reasonably foreseeable needs of future generations; and
   2. Safeguarding the life-supporting capacity of air, water, soil, and ecosystems; and
   3. Avoiding, remedying, or mitigating any adverse effects of activities on the environment.

The evaluation includes consideration of key elements related to the purpose of the RMA.  These are:

• sustaining the potential of natural resources, s5(2)(a)

• safeguarding the life-supporting capacity of natural resources, s5(2)(b)

• adverse effects on the environment, s5(2)(c)

• the effects of climate change, s7(i)

• the benefits of renewable energy, s7(j)

• social wellbeing

• economic wellbeing

• cultural wellbeing

• health and safety.

Finally an overall assessment was made as to the appropriateness of the Objective as a whole in achieving the purpose of the RMA.

4.3 Evaluation of the policies

In accordance with section 32 of the RMA, the evaluation of the proposed policies of the proposed NPS requires an assessment of their appropriateness in achieving the Objective.  The terms used in section 32 are efficiency and effectiveness.  Efficiency refers to the costs and benefits associated with the policy.  An efficient policy is one where the benefits are greater than the costs.  However, efficiency is a relative concept.  Where there are two or more policy options, the most efficient option will be that with the greatest ratio of benefits to costs.  Effectiveness means how successful the proposed policy would likely be in achieving the Objective (in terms of completeness and timing).

Section 32 guidance notes on the Quality Planning website¹⁷ refer to both net environmental benefits and costs and net social and economic benefits and costs, when discussing the concept of ‘efficiency’.  Given that costs and benefits are distributed across social, economic and environmental spheres, it is necessary to extend the concept of efficiency to include equity considerations.  It is perfectly feasible, therefore, for an option to be efficient if there are net environmental costs when there are (greater) net social and economic benefits, and vice versa.  The simplest way, therefore, to define the concept of efficiency is to do so in terms of ‘benefits outweighing costs over time’.  Ideally, that would mean that all benefits and costs would be quantified (in monetary terms or otherwise).  While desirable, it is not possible to quantify many costs and benefits associated with the proposed NPS.  The most important aspect of a cost-benefit analysis is that the costs and benefits are made transparent; any decision made to proceed with a policy is then taken on the basis of an understanding of where the costs and benefits will fall, even if there is some uncertainty about the size of those costs and benefits.

This is particularly pertinent in the context of evaluation of an NPS which, by definition, is a collection of policies promoted at a national level.  As such there will always be an element of uncertainty with regard to implementation.  With 85 councils as implementation agencies, there is potential for considerable variability in just how NPSs are interpreted and applied (depending on the specificity with which the NPS is articulated).  Calculating the cost and benefits of policies that only take effect through translation by individual councils exercising discretion within the RMA decision-making framework is therefore inevitably imprecise and requires many assumptions to be made.

For these reasons, a largely qualitative approach is presented in the identification and analysis of costs and benefits in this evaluation.  Nevertheless, an effort has been made to quantify the costs resulting from implementation of the proposed NPS for district and regional councils, generators, local stakeholders, and central government.  These cost estimates are included in Appendix A to this report.

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