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Value of the environment to the economy

New Zealand’s economic wealth and well-being are heavily dependent on our natural environment.

Renewable energy sources – the water that flows in rivers, steam that comes out of the ground, and wind that spins turbines – provide about 66 per cent of New Zealand’s electricity (see chapter 5, ‘Energy’).

Cattle and deer, which are sources of high-value dairy and meat products, graze in outdoor pastures year-round without having to be housed in barns. Our industrial, agriculture, and horticulture sectors also benefit from irrigation taken from our waterways.

Export goods such as wool, food crops, wood, wine, and natural cosmetic products are other examples of high-value goods that New Zealand is able to produce because of its natural environment.

Our primary production sectors rely on the environment.

Source: Ministry for the Environment.

Value of primary production

Our primary production sectors rely heavily on the environment. New Zealand’s temperate climate provides beneficial growing conditions and ensures good pasture and crop growth, and we have plenty of rainfall in most parts of the country. While it is difficult to put a dollar value on these and other benefits that the environment provides to our primary production sectors, awareness is growing in New Zealand of the significant value of our environment to our economy.

Forestry products exported from New Zealand also contribute significantly to our economy: exported forestry products were valued at $3.6 billion for the year ending 31 March 2007 (Ministry of Agriculture and Forestry, 2007). In 2006, forestry and wood processing employed 20,909 people (Ministry of Agriculture and Forestry, 2006).

The export of agricultural products makes a significant contribution to our economy. In the year ended 31 March 2007, this amounted to $16.1 billion (Ministry of Agriculture and Forestry, 2007). In 1996, agricultural exports had contributed $5.3 billion, or 5.5 per cent of gross domestic product. Two agricultural exports, dairy products and meat, were the top two export earners for New Zealand in 2006, making up 18.1 per cent and 13.5 per cent of New Zealand’s total exports respectively (Statistics New Zealand, 2007d).

Between 1996 and 2006, the value of New Zealand’s commercial fishing industry increased 40 per cent, from $2.7 billion to $3.8 billion (Statistics New Zealand, 2007b).

One example of the increasing economic value of New Zealand’s primary products is the merino wool industry. New Zealand businesses have developed a range of offshore markets for super-fine merino fashion and outdoor clothing, positioning their products at the high-value end of the international fashion industry. New fibre blends have also been commercialised, including possum fur and cashmere.

The sale of many of our export products depends on the value that consumers place on New Zealand’s environment being ‘clean and green’.

Value of tourism

New Zealand’s tourism industry relies on the country having a positive environmental image to attract international tourists. In the year ended 31 December 2006, more than 1 million people visited New Zealand for the main purpose of holidaying. This was a 57 per cent increase from the year ended 31 December 1999 (Ministry of Tourism, 2007).

International tourism has become one of the country’s largest foreign exchange earners and a driver of many regional economies (Department of Conservation, 2006). International tourism contributed $8.3 billion, or 19.2 per cent, of New Zealand’s total export earnings in 2006 (Statistics New Zealand, 2007e). Eighteen per cent of the tourism industry is directly involved in ecotourism or adventure tourism (Tourism Strategy Group, 2001).

In addition, the tourism sector accounted for the direct employment of 108,600 employees and the indirect employment of a further 74,500 full-time employees in 2005 (Statistics New Zealand, 2007e). This is equivalent to tourism supporting around one in every 10 jobs in New Zealand.

The majority of tourists visiting New Zealand (91 per cent) indicate that a key reason they come here is for our landscape, with over half of the international tourists visiting national parks and reserves during their stay (Ministry of Tourism, 2005).

Combined, the export earnings of New Zealand’s top two earners, tourism and land- and sea-based primary production in 2006, were about $22 billion. This equates to around 17 per cent of New Zealand’s gross domestic product.

It is clear that the New Zealand environment contributes significantly to our economy, and to our standard of living and way of life.