Washing off the virus

Featured

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?

Image by Pezibear from Pixabay

How are we going?

What’s in Australia’s decadal Environmental Report Card?

By Peter Burnett

The OECD has just released its ten yearly environmental report card on Australia. It’s called OECD Environmental Performance Reviews: Australia 2019. This is the third review of Australia, following reviews in 1998 and 2007, so we can look at some trends as well as the current report card.

How did we do? Good and bad.

Being reviewed by our ‘peers’

Before reviewing its findings, some background. The OECD’s environmental review program was established in 1991. Since then around 85 reviews have been conducted. The review teams include members from other OECD countries. For the 2019 Australian review these reviewers came from Canada and New Zealand. So the report is not just ‘the view from Paris.’

These reviews aim to help countries assess their environmental progress while promoting domestic accountability and international peer review. Unfortunately, there hasn’t been much sign of this has happened with past reviews. Perhaps Australian governments use the reviews behind the scenes, but publicly at least governments have not said much about them beyond the formal welcome when they hit the desk. And they haven’t generated much debate either. Nor is there much sign of international peer learning.

But these reviews offer a unique opportunity to governments seeking genuine environmental policy advance. Perhaps it’s time to try some encouragement from the sidelines.

Could do better

The report says some nice things about Australia. They acknowledge that we perform well in the OECD ‘Better Life Index’, showing that we rate better, often significantly better, than the OECD average on a range of things, including on environmental quality. That’s great, but our environmental quality rating was earned largely on the back of good scores on urban air quality and public satisfaction with water quality in an OECD index (see www.oecdbetterlifeindex.org/countries/australia).

These are both factors where we get a boost from being a small population in a large country and from the absence of the high-polluting neighbours that you can find elsewhere (South Korea, for example, chokes on China’s industrial emmissions).

The OECD also compliments us on being one of the few OECD countries that has a green investment bank (the Clean Energy Finance Corporation, CEFC) to help finance renewable energy, but they either don’t know, or diplomatically overlook, the fact that we only kept the CEFC because, in one of the stranger events in recent Australian political history, Al Gore dropped in and talked Clive Palmer into opposing its abolition.

So some of our success is more down to good luck than good management. But, of course, it’s the brickbats rather than the bouquets that are more important here. The headlines of the 2019 Review amount to saying ‘this student is not working to potential’, or the old-fashioned ‘could try harder’.

On climate policy and resource efficiency, the OECD recommends that we intensify our efforts to reach our Paris Agreement goal and produce an integrated energy and climate policy framework for 2030. Of course, we nearly did the latter with the National Energy Guarantee, but the politics got too hard.

On governance, which in Australia’s federal system is as much about federal-state cooperation as anything else, the OECD calls for more effort, but they add a new emphasis on state-to-state cooperation, to encourage best-practice and increase efficiency. For example, they recommend standardised approaches to cleaning up old mine sites and a nationally-consistent approach to landfill levies to remove incentives to truck waste interstate. While federal-state cooperation is less politically-sensitive than topics like climate policy, it’s profoundly and perennially challenging. In fact, there aren’t many examples of genuine success, except where there are large federal government carrots or sticks involved, as there were with the successful National Competition Policy of the 1990s. The trouble is that the carrots are expensive and the sticks take great political skill to wield effectively.

On economic efficiency, a key recommendation relates to environmental taxes: to tax fuels that are currently exempt (eg, coal) and increase rates on fuels that are too low (eg, petrol and diesel taxes don’t include an environmental component). In principle this is simple enough but fuel taxes can be political dynamite, not just here but elsewhere, as recent demonstrations in France and Zimbabwe show.

Our ‘special topics’

Finally, the report included two ‘in depth’ chapters on topics chosen by Australia, one on threatened species and biodiversity and the other on chemicals.

The OECD was blunt about species and biodiversity: things were poor and worsening. It found that pressures from humans, such as agriculture and urban development, were increasingly interacting to exacerbate challenges for threatened species. They recommended that Australia invest time and resources in regional plans and strategic assessments and that we get our act together on environmental information, including biodiversity baselines to measure progress. Sensible, but complicated, expensive and a political minefield.

In contrast, the recipe for success on chemicals seems easier: we already have reforms in the works and could achieve much just by getting a move on.

Recurring themes

Some of the themes that recur in the reports include the need for ongoing water reforms, full policy integration and enhanced Indigenous engagement in land management. Some of these themes are really tough because they affect vested interests or might constrain economic growth, but surely we can get Indigenous engagement right.

Other recommendations that I think are achievable without too much pain are the greening of government procurement and comprehensive and consistent approach to environmental information, especially baseline monitoring.

These are very useful reports and hopefully government will do more with the 2019 report than it did with the earlier ones. The ANU has given the reports some early attention by holding several events to mark the release of the report, and the report has already received some significant publicity, eg on the ABC: www.abc.net.au/radio/programs/pm/oecd-says-australia-not-on-track-to-meet-paris-agreement-targets/10764274.

Watch this space.