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3.7 Costs and benefits of the standards package

Air Quality Technical Report Number 46, Section 5, stated that:

A detailed investigation of the costs and benefits of the proposed package of standards is underway .... The investigation includes health benefit modelling and surveys of industry and local government.

Submissions received in relation to costs and benefits are summarised below.

Submitters 6, 163 and 174 request that a section 32 analysis be provided for public comment and that it include the potential associated health cost of promulgating standards less stringent than the 2002 Guidelines.

Submitter 75 seeks a thorough social, economic and health cost-benefit analysis for the effects of the standards that occur now and in the future, including cumulative effects. The submitter wants $10,000 to be incorporated for additional plan monitoring on an annual basis as well as an additional $100,000 per new permanent monitoring site and an annual operating cost of $30,000 to $50,000.

Submitter 85 wants the Ministry to ensure that the full range of costs and benefits is taken into account when assessing the impact of the standards.

Submitter 90 comments that is unfortunate that the section 32 report was not publicly notified with the proposed standards, because if the submitter had examined the report they would be in a better position to form a view as to whether the standards are justified.

Submitter 113 is concerned that the standards will increase costs, and that these costs will have to be funded by the rate payer. The submitter considers that the analysis of costs is cursory and inconclusive and there appears to be no opportunity for the public to comment on the more detailed investigations under way.

Submitter 119 is concerned that there has been no adequate cost-benefit analysis justifying the direction taken, and considers that the costs will be unacceptable for small rural communities that are likely to have air quality problems. The submitter does not believe that the cost implications to ratepayers have been adequately taken into account. The submitter estimates the costs of the extra monitoring to be achieved at a faster rate will be an additional $750,000, and considers that this burden should not be borne by council and the general rate. The submitter wants a cost-benefit analysis to be released to fully inform councils of the implications of the standards.

Submitter 122 comments that the standards will increase the cost of ambient air monitoring and modelling, which will be passed on to industry and rate payers. Industry may also incur additional costs as a result of the vigilance needed to prove compliance with standards.

Submitter 127 wants the Ministry to develop tools for councils to assess the social, economic and environmental costs and benefits of various air quality management options at the local level that take into account the national costs and benefits.

Submitter 131 considers that the costs and benefits should have been published with the proposed standards, and submissions sought concurrently.

Submitter 145 draws attention to the comment in the proposed standards "that industry seeking consent renewals may face additional costs including the costs to negotiate reductions from other sources and additional monitoring". The submitter is concerned that this is only part of the costs, and that equipment or relocation costs could be prohibitive, leading to downstream costs to the community.

Submitter 150 is concerned about the costs of compliance and requests that they be limited by allowing existing resource consents to continue until their current expiry dates, and by removing councils' discretion to impose more stringent limits than the standards.

Submitter 154 considers that the costs of implementation within the proposed timeframe are too high. The submitter's recently notified air quality plan bans open fires from 2008, contains a cap on solid fuel burners, a 1 g/kg standard and a ban on outdoor burning, which would achieve the guideline by 2020 at a cost of $3.44 million. A proposal to achieve the guideline by 2013 would have cost $14.87 million. The cost to achieve the standard by 2008 is expected to be much more than this.

Submitter 156 is concerned at the costs to resource users and councils to implement the standards. Capital works required for the submitter to comply with the standards could be $6 million.

Submitter 160 considers that the monitoring cost to the community and the cost of consents not being granted will be considerable. The submitter argues that considering costs and benefits in a broad-brush manner on a national scale is not appropriate and it would be preferable to have guidelines whereby the costs and benefits can be assessed locally.

Submitter 161 is concerned that the cost of meeting the proposed standard will be significant and that this cost must be clearly justified in terms of environmental benefit.

Submitter 164 considers that the compliance costs for industry are likely to increase due to a need for more precise data on emissions and more ambient monitoring being required. Where consents reviews are required, costs can be very significant, especially if there are appeals. Industry may also incur expenses from having to improve emission controls or (potentially) from relocating. The submitter assumes these costs have been incorporated into the cost-benefit analysis.

Submitter 177 considers that the costs to its members to upgrade from wet-scrubbing technology to bag-house technology are likely to be of the order of $25 million, while the costs of relocation from a polluted air shed would be tens of millions of dollars for one site.

Submitter 180 seeks a credible cost-benefit analysis, which includes industry compliance costs. The submitter considers that the proposal contains several comments related to potential extra costs without quantifying them. The submitter also considers that the claimed cost reduction in section 1.3 relating to less confusion and arguments is unrealistic because there have been a number of resource consent processes where the focus has been on costly alternative modelling assessments with varying assumptions.

Submitter 183 comments that compliance costs associated with the standards need to be affordable, particularly to schools, and that there is a need to avoid making administration of the standards complex and expensive.

Submitter 208 considers that ways to reduce the costs associated with the proposed standards should be investigated, and is concerned that the required ambient monitoring could draw funds away from more appropriate programmes in areas that do not have an air quality problem.

Submitter 226 wants a cost-benefit analysis to be made available for comment before a decision is made.