Each day during the month of April, the Institute will feature one of the 30 ‘perspectives’ from the One Ocean report. These short articles include a diverse range of views regarding oceans management in New Zealand. Enjoy!
Wendy McGuinness, Chief Executive, McGuinness Institute
Comparing apples with apples – Matching public benefits against public costs and risks
‘Cleaning up’ our fresh water has been costly; New Zealand has already committed $450 million over 20 years to clean up Lake Taupō, the Rotorua lakes and the Waikato River. But when it comes to the water in our oceans, are we learning from our mistakes or simply repeating them? According to April 2013 Treasury figures, the Rena disaster cost the government $46.8 million – far greater than the $27.6 million paid in compensation by the ship’s owners and insurers. This does not include the ongoing costs to the environment or the many New Zealanders who helped clean up the coastline. If cleaning a lake or river is hard, how hard would it be to clean an ocean?
The Institute was involved in the application by New Zealand King Salmon to establish nine salmon farms in the Marlborough Sounds. What surprised and concerned me was the inadequate level of economic expertise required from the applicant in terms of public benefits. I believe that because hearing decisions usually take a middle ground, somewhere between the applicant and those questioning the application, applicants in these cases seem to be incentivised to overestimate economic benefits to the public. Critical economic assessment of public benefits must not be left to third parties; it is an expensive and specialised area of expertise that must be embedded into the governance system.
New Zealand King Salmon farms continue to have high mortality, meaning many fish are dying in the waters of the Marlborough Sounds. The latest mortality event is estimated to cost the company millions. But what about costs to the community and the environment? Public risks should be calculated and balanced against their likelihood of delivering public benefits. Anything less is poor stewardship.