3 Contributing Factors to the Problem
A list of contributing factors identified by the water allocation project team was presented to the Group for comment. In some cases the Group's comments suggested the definition of these factors should be amended.
a) Limited strategic planning
The issue of certainty was seen as important both for instream flows and for extractive use rights to water.
A number of factors were regarded by various members of the Group as contributing to the lack of certainty:
- inadequate strategic planning (leading especially to an inability to consider cumulative effects of water allocation)
- a lack of outcome-focused plans
- a lack of clear and time-bound objectives
- the lengthy process for developing plans
- the variety of definitions employed to define rights to use
- the lack of adequate mechanisms to deal with conflict between users in situations of water scarcity.
It was acknowledged by some members of the Group that strategic planning does not involve "picking winners" or giving priority for the allocation of water above and beyond water which is already allocated to specific uses.
Governance of the overall water allocation system was raised as a key problem. Lack of plan implementation and politically motivated decision making were also raised as contributing issues. Poor and slow performance of the present governance system in its conflict resolution function was widely regarded as a key factor. The need for clear parameters for the allocation of surface and ground water at the national level was also raised.
b) Evolving knowledge about instream flows
This was thought to be an issue for water resources in general, and not just instream flows. The uncertainty of science, the uncertainty in naturally variable catchments, debate over minimum flow methodologies, and a lack of catchment specific knowledge were regarded by the Group as contributing factors to the difficulty in defining and setting flow levels.
The need for a system which allows for changes in the environment was regarded as important. The current allocation system was thought to provide poor flexibility and adaptability to change. The tension between allowing for flexibility but at the same time providing certainty was acknowledged. While certainty of minimum instream flows was regarded as important, the need for the rest of the allocation system to allow for changes in both the physical and economic environment was regarded as important.
c) Limited scope for evaluation of where water would be most valued
Scope for evaluation was thought to be present in the current system although the Group did not identify a need for regional councils to evaluate proposed economic uses of water. The Group agreed that there is a need to explicitly determine the environmental requirements for water.
Currently a lack of incentive to understand and apportion water uses until allocation limits have been reached was thought to be a problem. The need to optimise the value from available water rather than maximise water availability was raised. This is because in situations where water is scarce it is not possible to maximise use for all values; it is more desirable to seek to achieve the greatest overall benefit to society. Optimised allocation can however, be inequitable or uneconomic for existing users who may have invested significant resources into water related infrastructure. Uncertainty over future resource allocation would likely lead to a reduction in investment in infrastructure in a region.
A lack of consensus on the priority values for water was also raised as a problem although the view was raised that this problem becomes a simpler economic allocation problem if the in-stream requirements can be agreed first.
The Group proposed that any determinations it could reach for allocating water should be given weight in decision making related to water allocation.
d) First in, first served system (First in Time, First Right)
The current "first in,, first served" system was regarded as problematic when allocation limits were met (although this is disputed by some water users), but this was not thought to be the case where water is plentiful. The issue was raised whether an alternative system would result in the picking of "winners and losers", a scenario with potential for inequity, and unlikely to explicitly account for the comparative social and economic benefits associated with different water uses. The need for national determination of the system of allocation in order to maximise the transparency of any allocation decisions was raised.
e) Little use of transfer and reallocation
Problems with changing use to the highest value once all water has been allocated are a current problem in some regions. Regulatory methods currently used are inadequate and regional councils have been reluctant to adopt the transfer mechanisms provided in the Resource Management Act. The need for further development of these mechanisms along with greater government direction for regional councils on their use was raised, so that available water can move to its highest and best use over time, and thereby deliver improved economic returns for the country.
f) No incentives for technical efficiency
The comment was made that the current system of water allocation has lead, in some instances, to perverse incentives which inhibit efficiency of use, for example 'use it or lose it' basis for retention of rights to water. One view is that present policies encouraging or requiring increased efficiency of use are often targeted at users of water for irrigation, so they are of little value or relevance to other water users. In addition, the lack of transferability and/or resource rentals means that water use rights are unpriced except where rights to water affect land prices. This results in a reduction of incentives for technical efficiency in water use.
g) Opportunities for representation of Maori interests restricted
The view was raised that the RMA provides opportunities for Maori to participate in allocation processes although Maori are often underrepresented on regional councils. Council practice in incorporating Maori interests varies considerably. The Group indicated that there is a need to hear from Maori about their views on their participation in the current allocation process.
h) Limited organisational capacity, experience and skills
No comments were made on this contributing factor however, the issues raised under a) Limited strategic planning about lack of plan implementation and a lack of specific outcome focused plans are related to this factor. The lack of water expertise of regional councillors was also identified under the section 4 Potential Approaches.
i) Additional contributing factors raised by the Group
- Poorly defined boundaries of ownership and rights to allocate were raised as additional factors to the overall problem. The physical boundaries for allocation were also thought to be poorly defined across and within catchments, and between land and water.
- The role of education was regarded as important in gaining acceptance that fresh water is a finite resource.
- Externalities are not adequately addressed in the current system.
- The point at which the management of water resources starts from in the hydrological cycle. The view was expressed again in relation to this point that the allocation capacity of councils should not extend to the regulation of revegetation of catchment land where the catchment land would be naturally vegetated. A view was expressed that the physical boundaries for allocation were too broadly interpreted by regional councils.
- The lack of constructive communication between stakeholders in some areas.
