Economic instruments and sustainable management in New Zealand

The pioneering Resource Management Act 1991, New Zealand's primary environmental legislation, promotes 'sustainable management' as its guiding principle, but allows for economic instruments as a means of implementing environmental policy. Outside of the Resource Management Act regime, there are further opportunities for using economic instruments, such as in relation to fisheries management and climate change emissions control. This paper is not concerned with reviewing the technical economic analyses deployed to justify the shift to market-based mechanisms for environmental management. Instead, it focuses on the regulatory and policy issues raised by the integration of economic instruments with existing environmental legislative frameworks. This paper has canvassed some regulatory and policy issues that need to be addressed. Economic instruments cannot be applied without regulatory frameworks, and the choice of mechanisms and situations in which they are applied must be governed by public consultation processes to ensure that equity and ethical issues are not inappropriately excluded from management decisions. The essential legal task is to find institutional structures and decision-making processes that allow for introduction of economic instruments, but in a way that citizen preferences are taken account of, and are not distorted by self-serving bureaucratic or development interests. In New Zealand, this will be achieved besth through using the opportunities provided in the Resource Management Act 1991 for the preparation of national policy statements and standards. In a small country like New Zealand, national approaches are appropriate. The development of national prescriptions provides a vital process for taking into account public concerns associated with using economic instruments.