Will we throw the environmental baby out with the bathwater?
By Peter Burnett
In canvassing our recovery from the COVID-19 crisis, Prime Minister Scott Morrison has made bold statements about giving first priority to growing the economy through a business-led recovery. Finance Minister Mathias Cormann has deployed equally strong language about an ‘aggressive’ deregulation agenda.
The strength of such language must give anyone concerned about the environment pause for thought. There’s no doubt the economy will need some heavy duty kick-starting as we recover from the COVID-19 disaster.
However, might this crisis be used to justify a political narrative about environmental regulation being ‘green tape’? Could we, in the name of curing the current big crisis, end up accelerating the next big crisis, brought on by environmental decline?
Wrapped in green tape
Federal Environment Minister Sussan Ley already has a predilection for the green tape narrative. Announcing the current review of the Australia’s national environmental law, the Environment Protection and Biodiversity Conservation Act (EPBC Act) last October, she cast the review as an opportunity to cut ‘green tape’ and increase certainty for business.
The environment itself was only mentioned in the context of ‘maintaining high environmental standards’. Ley expressed no concern about the ongoing decline of the environment itself. And this was well before the COVID-19 crisis.
It is fair enough for the Government to look for increased efficiency, including in regulatory processes, as part of a plan for environmental recovery.
In federal environmental regulation, my first suggestion for efficiency would have been to fund the regulatory process properly. Successive governments have reduced efficiency by whittling departmental resources away through inflated ‘efficiency dividends’, code for general cuts. As a result, delays have gotten longer and longer, but of course they could have been reduced again by restoring the money.
But it seems that the Government is already on top of this one.
In November 2019 (ie, still before the crisis), it announced a $25m ‘congestion busting’ initiative to reduce delays in federal environmental assessments, including by establishing a major projects team ‘to ensure assessments can be completed efficiently and thoroughly in accordance with the Act.’
Recently, Ley announced that this initiative was delivering what appears to be significant progress. As of December, only 19% of ‘key assessment decision points’ were being met. But by March 2020 this had improved dramatically, to 87%. What’s more, the Minister says that figure should reach 100% by June 2020, all without relaxing any environmental safeguards under the EPBC Act.
In other words, the problem of slow environmental approvals will be solved in a couple of months.
I must admit to scepticism about this claim. I suspect that the assessments are much more superficial than they once were, more reliant now on accepting information provided by proponents and state regulators.
I also suspect that the introduction of user-charging for federal environmental assessments a few years ago, together with limited resources for compliance, mean that there are fewer projects under assessment. This is because proponents abandon a bias towards referring projects on a ‘just-in-case’ basis, in favour of a risk management approach, under which proponents weigh the costs of referral against knowledge that compliance action for failure to refer is unlikely.
However, let’s take the Government’s claims at face value for the moment and accept that regulatory delays, at least at the federal end, are on the way out. What else could they do to speed up environmental approvals?
More juice in the efficiency lemon
Even if individual statutory timelines are met, overall timelines can still be reduced, first by removing duplication between federal and state processes and also by removing delay at the proponent’s end. This latter kind doesn’t count as regulatory delay but is, of course, still delay.
Duplication is a complex issue and reform is a medium term task. But short-term gains could be achieved administratively, by forming federal-state task forces, ie by putting regulatory staff from both levels of government into a single team, tasked with shepherding the project through all processes as quickly as possible.
In the past I would have said the politics wouldn’t allow this, but I would also have said that a thing called ‘National Cabinet’ would never work. These are extraordinary times.
Proponents could also contribute to a task force model. I wouldn’t recommend direct secondment of proponent staff to task forces, as this is mixing the foxes in with the hens, but by increasing resources for their own project teams proponents could improve quality and responsiveness, both of which are essential to timely environmental assessment.
Avoiding the temptations of short-termism
So there are some gains to be had. Yet the temptation in a crisis is to grab onto anything and everything that might conceivably help deal with the problem at hand, taking a ‘tomorrow-can-look-after-itself’ attitude to any longer term consequences. And this is no ordinary crisis.
Beyond the marginal gains of efficiency, trading parts of the environment itself for a short term economic hit could look very tempting.
The OECD is alive to this issue and has come out with all guns blazing. In a recent statement, OECD Secretary General Angel Gurría argues, not just against weakening environmental standards, but in favour of stronger standards. In his view, governments should seize ‘a unique chance for a green and inclusive recovery … a recovery that not only provides income and jobs, but also has broader well-being goals at its core, integrates strong climate and biodiversity action, and builds resilience.’
In other words, kill two birds with one stone. Use your spending on post-virus economic recovery to advance longer term environmental recovery. Gurría has a three point plan for this:
First, align short-term emergency responses to long-term economic, social and environmental objectives and international obligations (ie, leverage your investment).
Second, prevent lock-in, not only of high-emissions activities, but also of impacts on vulnerable groups, who have been the worst affected by COVID-19. A key way to do this is through a fair transition to a low-carbon economy.
Third, policy integration. Integrate environmental and equity considerations into the economic recovery. This means that infrastructure investment, as well as government support to virus-affected sectors, should pass the test of contributing to a low carbon economy.
Don’t throw the baby out with the bathwater
The OECD is often described as a club for rich nations. And rich nations, including Australia, could be expected to take a conservative view about maintaining wealth.
Yet this advice sounds rather left of centre. In fact, in an Australian context, it is redolent of the mostly unlamented Rudd/Gillard/Rudd Government, which aligned its short term emergency responses to long term environmental objectives (think Pink Batts, 2008) and also pursued a fair transition to a low-carbon economy by compensating low income earners for the impact of the carbon price (think Clean Energy Future, 2011).
In my view the OECD is right but, in Australia, its advice may be cruelled by our recent political history. If the Government were to take the OECD’s environmentally-responsible but mildly collectivist advice it would be accused of taking the Rudd/Gillard path to disaster.
On the other hand, if the Australian Government follows through on its current rhetoric of a growth-led recovery and aggressive deregulation, we may be headed for solutions that throw the baby out with the bathwater.
Which will it be?