Category Archives: Environment & Resources

Should We Trade Emissions Rather Than Tax Them?

Guest Column for 16 October, 2006.   Keywords: Environment & Resources;    There appears to be a tendency to pose carbon taxes as the only economic way to address carbon emissions. But tradeable emission permits (TEPs) are a serviceable alternative which have both strengths and weaknesses over carbon taxes. Their greatest strength may be…
Continue reading this entry »

It Ain’t Easy Being Green: an Unfinished Conversation with Rod Donald

Listener 3 June 2006.

Keywords: Environment & Resources; Political Economy & History;

The last time I talked with Rod Donald was shortly after the 2005 election, walking along Lambton Quay. Rod was very disappointed with the election outcome, for his Green Party lost voter share, and hence seats. He thought that the scurrilous anti-Green election pamphlet did a lot of damage. I said that anyone who thought it valid was too ignorant to vote Green, although it damaged the Greens when the new government was being formed.

What Happens After Oil Production Peaks

“Peak Oil: Economic, Political & Environmental Impacts” Monday 26th September, organised by the VUW chaplaincy.

Keywords: Environment & Resources;

When we were young we assumed that our parents will live for ever. As adolescents, we realise they will die one day, but at a time so far in the future it hardly seems relevant. As mature adults we realise that day is closing in, and we wonder what it will be like when they go. And so they pass on, but you survive in the world without them – perhaps, like me, missing them.

Energy Plan: What Will Happen After Oil Production Peaks?

Listener: 26 March, 2005

Keywords: Environment & Resources;

One day the world’s total oil production will peak, and decline thereafter. Some experts think that it will be this year or next, others predict that the peak is decades off. In 1979, British Petroleum experts predicted that it would happen in 1985. Forecasting the date involves a complicated assessment of future oil demands, production possibilities and costs of depleting fields, the discovery of new fields, and the extent to which alternative fuels will substitute.

But one day – probably in our lifetime – the world’s total oil production is going to peak.

Reforming the Rma

The market will generate a good environmental outcome if all the property rights are allocated, providing transaction costs are zero.
Listener: 28 August, 2004.

Keywords: Environment & Resources;

As George Soros remarked, policy regimes are like marriage: whichever one you’re in, you wonder if another might be better. Thus it is with the Resource Management Act. We seem to have forgotten the shambolic arrangements that the Act swept away. But the RMA can be improved.

Nor Any Drop to Drink: Should We Be More Systematic with Water Property Rights?

Listener: 15 May, 2004.

Keywords: Environment & Resources;

Energy is ultimately the key to sustainability, but the first civilisations were based on water. In some cases, the quality water supplies ran out, perhaps from rising salt in irrigated soil, and the civilisation died. This threat is not peculiar to the past. There are great lakes in the middle of Asia dying from mismanagement, African countries dispute over water from the Nile, and even the US and Australia have major water systems that are disappearing or the soil is suffering from excess salt, with serious economic consequences.

The Public Domain: Who Will ”Own” the Foreshore?

Listener: 1 May 2004.

Keywords: Environment & Resources; Maori;

Property rights – the rights to use, transform and transfer (sell) a resource – is a better term than “ownership” because there are so many aspects to them and different groups can share the rights. An effective market needs a clear and comprehensive definition of those property rights. The economic reforms of the 1980s clarified many. Sometimes the outcomes were paradoxical. The largest ever nationalisation in dollar terms was by Rogernomes, for the government first had to own State Insurance before it could privatise it. But property rights continue to trouble us.

Three Short Book Reviews: for the 2003 listener Books Of the Year.

Listener: 20 December 2003.

Keywords: Environment & Resources; Governance; Macroeconomics & Money;

TREASURY: The New Zealand Treasury 1840-2000, by Malcolm McKinnon (AUP, $50).

THE GREAT UNRAVELLING: Losing our way in the new century, by Paul Krugman (Viking, $35).

THE LOST WORLD OF THE MOA: Prehistoric life of New Zealand, by Trevor Worthy and Richard Holdaway (Canterbury University Press, $169.50).

Road Signals: Who Should Pay for Traffic Decongestion?

Listener 12 July, 2003

Keywords: Environment & Resources;

In a typical year motorists drive 3.6 percent more kilometres (more than the growth of GDP), while the road network hardly increases. It might seem a good thing that we are using our roading capital more intensively. Unfortunately road-use does not follow standard market behaviour, so the ‘good thing’ is also the economic ‘bad’ of increasing congestion. Once that congestion occurred in a few hotspots, in the morning commuter rush hour, and most particularly in Auckland. Today Wellington and Christchurch seem to have congestion for long periods in the day, while many Auckland roads are congested from dawn to dusk (and after in winter).


Chapter of TRANSFORMING NEW ZEALAND. This is a draft. Comments welcome.

Keywords: Business & Finance; Environment & Resources; Globalisation & Trade;

One of the curiosity of standard economics as it is presented to the public and, indeed, often as it is taught, is the neglect of transaction (and information) costs. Ronald Coase, recipient of a Nobel Prize in economics in 1991, for some seminal insights (identified 30 years earlier) into the way that economic behaviour is modified by them. The section on the Resource Management Act below, sketches the insight. Subsequently, a handful of economists, most prominently Joe Stiglitz who received the Nobel Prize in 2001, have elaborated their role. In fact a considerable amount of government activity is focussed on reducing transaction costs, despite their role often being overlooked. All the more puzzling because those most involved in the economic debate – economists, accountants, bureaucrats, lawyers, politicians, even managers of businesses – are at the transacting end rather than the providing end, of the economy.

Air Force: an Answer to Our Power Needs May Be Blowing in the Wind

Listener 5 April, 2003.

Keywords: Environment & Resources; Growth & Innovation;

Lincoln University meteorologist, Neil Cherry, wonders aloud whether New Zealand is too windy to convert its wind power into electricity. Germany with the most wind power installations has winds averaging 6 metres/second. Denmark, the world leader in wind turbine manufacturing, has sites up to just over 7m/s, as has California the biggest wind power state in the US. A typical New Zealand site is 10m/s, which yields at least twice as much power. That means much more stress on the machinery. Half the European made gear boxes on one New Zealand wind farm had to be replaced within the guarantee period (and ten percent of them re-replaced).

Environment Index

The Green Maori (May 1990)
The Maori Broadcasting Claim: A Pakeha Economist’s Perspective (September 1990)
Evidence of Brian Easton with Respect to Te Oneroa-O-Tohe (March 1991)
Tikanga and Te Oneroa-O-Tohe (May 1991)
Fishing and the Chatham Islands (September 1993)
The Maori Geothermal Claim: A Pakeha Economist’s Perspective (September 1993)
The Political Economy of Fish (January 1997).
The Commercialisation of New Zealand Appendix to Chapter 2 (July 1997)
Tapping the Source: Should Water Rights Be Made Tradeable? (August 1997)
Is the RMA Sustainable?: the Politics of the Coase Theorem (July 1998)
The Ownership, Management, and Regulation of Water (And Wastewater) (July 1998)
Growth Rings (January 2000)
Postcard From Arabia (April 2000)
Future Directions for the Ministry for the Environment (August 2002)
Rhetoric and Iraq: Arab Brothers and Oil Sisters (October 2002)

Future Directions for the Ministry for the Environment

On August 27 I was invited to a breakfast which was one of a series of consultations by the Ministry for the Environment on the issues which faced it. After a lively session we were invited to make submissions. I wrote to the new chief executive, Barry Carbon. Subsequently the MfE published my letter in its report back to participants. Here is what I wrote – a little tidied up.

Keywords: Environment; Regulation & Taxation;

Dear Barry Carbon,

Thankyou for breakfast this morning, and the interesting (and entertaining) session that went with it.

Free V Fair

Listener: 29 April, 2000 Keywords: Globalisation & Trade; The free trade versus fair trade dispute is an example of the way policy debates can be  dominated by extremism. Economists often pontificate on the topic with an authority that their theories do not justify. Non-economists take up ideological positions, relying on the economists’ claims. What economic…
Continue reading this entry »

Growth Rings: New Zealander Of the Millennium: Tane Mahuta

Listener 29 January, 2000

Keywords: Environment; Political Economy & History;

Perhaps our best image of a millennium is the polished cross-segment of one of those great kauri trees in many of our museums. At its centre is some date over a thousand years ago. The various growth rings around it are marked – the arrival of the Maori, the arrival of Tasman, and so on. The last ring is the year the tree was cut down, typically in the time of my grandfather.

The Ownership, Management, and Regulation Of Water (and Wastewater)

Presentation to the Annual Conference of the Rural Sector of Local Government New Zealand: July 1, 1998, Dunedin.

Keywords: Regulation & Taxation;

My conclusion is a simple one. There is no simple answer to the question of the ownership, management, and regulation of water and wastewater supply and services: there is no one answer which suits every locality, circumstance, and system. It is easy for extremists to claim everything should be privatised, while other extremists as equally shrilly argue they should be kept in local government control. It soon becomes evident that the practicalities of the general circumstances rule out any extremist argument, while the choice between the middle options depends on the local circumstances. This presentation details the argument that leads to the conclusion.

Is the Rma Sustainable?: the Politics Of the Coase Theorem.

Planning Quarterly June 1998, p.5-8, A revised version of a keynote address to the 1998 NZPI Annual Conference, Dunedin.

Keywords: Taxation & Regulation

The Resource Management Act (RMA) is based upon numerous, often conflicting, notions. Among them was an economic analysis which derives from a theorem first proposed by Ronald Coase who received an economics prize in honour of Alfred Nobel, for this and other key insights which are the foundation of the modern subject of law and economics. The Coase theorem was important in many of the reforms of the 1980s, including the RMA. I will explain why this powerful theorem is important, how it relates to resource management and the RMA, and then I will reverse its use to obtain insights on recent attempts to reform the RMA and draw some conclusions about the role of planning.

Future Shocks

Some Private Forecasters Are Predicting A Major Energy Shortage in Less Than A Decade
Listener: 30 November, 1996.

Keywords: Environment & Resources;

Forecasting electricity is far from easy, as Electricity Supply and Demand to 2015 from the University of Canterbury Centre for Advanced Engineering makes clear. There are so many uncertainties: economic growth, the degree of energy conservation, the weather which affects the hydro lakes, what capacity will be built, the size of the Maui field supply of gas, and so on. Yet it seems there may well be a major energy shortfall after 2003 (and possibly earlier if there is a dry year which fails to fill the lakes). This is not just a one-off year of power cuts in a cold winter. The forecasters expect an ongoing shortage.