Hugh
Logan - Chief Executive, Ministry for the Environment
- Lincoln University - 13 October 2006 - Thank
you for inviting me to speak to you today. I want
to explore how a clean and healthy environment
is, and can be even more, a key competitive advantage
for New Zealand. I will discuss New Zealanders
values in relation to the environment, the connection
between those values and retaining and attracting
the people this country needs, the importance
of environment to an economy based on natural
resources, and some of the key environmental issues
that New Zealand must address. Above all, I want
to explore why the environment matters to us.
New Zealanders take great pride
in this country and our natural environment. Our
diverse and stunning landscapes, our flora and
fauna are part of our national identity.
Most New Zealanders these days
live in cities and towns. Only about 14% of the
New Zealand population now resides in a rural
area. But, wherever we live, New Zealanders still
feel close to the natural environment – the mountains,
beaches, bush and stunning landscapes matter to
us. They are part of what it means to be a New
Zealander.
In April 2004 the Growth and
Innovation Advisory Board published research into
the attitudes and concerns of New Zealanders.
This research found people had well-defined goals
and values. A clear majority of New Zealanders
rated four lifestyle and personal factors as most
important to them. These were: quality of life,
quality of our environment, quality of education
and quality of health services – in that order.
The research showed that support
for economic growth comes with conditions attached
– New Zealanders don’t want growth to damage our
unique environment. Protecting our environment
and our biodiversity, and conservation of wild
and scenic places matter to New Zealanders.
In addition, New Zealanders
say they want a clean and healthy environment.
Increasingly New Zealanders want this for lifestyle
reasons and making New Zealand an attractive place
to live, as well as an essential component of
sustaining our economy.
New Zealanders are great travellers.
Many of our young people, in the early years of
their working lives, “do their OE” and spend time
living and working overseas. While some eventually
return, others choose to remain long-term in other
countries. It’s not just Vogel bread these expatriates
remember – the memory of New Zealand’s blue skies
and green hills remains strong. [Telecom ad]
With low unemployment, New Zealand
is already feeling an increasing need for more
skilled and professional staff – which can potentially
be met from New Zealanders returning home or new
migrants. The attractions of moving to New Zealand
for many immigrants are the same things that New
Zealanders value – our quality of life and the
quality of our natural environment.
Increasingly, as people like
Peter Jackson have shown, talented and creative
people can have it all: the quality of life in
this country and the capacity to work in the international
marketplace.
Forecasts suggest that the labour
market will be increasingly global in future.
New Zealand will be competing much more vigorously
with other developed countries for people in the
health sector, professions and business.
The young adults that we need
– the post baby-boom generations – say that they
are more inclined to work for companies that are
ethical and environmentally friendly. That inclination
can potentially translate to where they live too.
Our quality of life and a clean, healthy environment
can be major competitive advantages to recruit
and retain the people we need.
A high quality environment is
a major drawcard for another important group of
people too – our international visitors. New Zealand
is regularly ranked as a leading international
holiday destination, even though the distances
to travel here can be daunting.
Export earnings from tourism
reached $8.1 billion in the year ended March 2005
– 18.7 percent of New Zealand’s exports. The sector’s
growth has been almost double that of the economy
as a whole in the five years to 2004.
The attraction for these visitors
is our natural environment and the many outdoor
activities they can participate in. New Zealand’s
“100% Pure” branding and image internationally
creates an expectation of a clean and healthy
environment.
Because New Zealand is so far
from our major tourism markets, it is a continuing
challenge to get people to visit this country.
We need to be very conscious of the expectations
of our international visitors and the perceptions
they will take away as part of their “travel tales”
to stay among the top holiday destinations.
International visitors are becoming
aware of the potential impacts of mass tourism
on the environment. Many seek out environmentally
responsible experiences and many are very aware
of the environment-related behaviour of their
hosts. Tourism operators are starting to realise
that their livelihoods are linked to the quality
of our environment. Sustainable business practices
must become part of business as usual in the tourism
sector.
The Ministry for the Environment
is working with regional tourism organisations
in six regions to improve the sustainability of
tourism businesses. The project encourages tourism
operators to make their businesses more energy
and waste-efficient, to involve their communities
in decision making, to identify and avoid potential
risks to the environment, and to identify beneficial
partnerships.
More than that, we must be conscious
that the health of our whole environment is crucial
to New Zealand’s attractiveness as a holiday destination.
Negative , for example, that visitors might become
ill as the result of swimming in polluted water
would damage our international image.
This healthy environment is
the essential basis for a vibrant tourism sector
but equally this applies in other sectors as well.
More than two-thirds of New
Zealand’s foreign exchange earnings come from
primary sector industries such as agriculture,
horticulture, fishing and forestry. These industries
continue to grow in importance.
The Prime Minister noted in
the Speech from the Throne last year that “the
backbone of the New Zealand economy will continue
to be our primary industries”.
However, New Zealand is a small
country a long way from any major markets. We
are facing rising competition from lower-cost
producers closer to the major markets.
The UN Food and Agriculture
Organisation says that meat production in developing
countries has grown by 230 percent and milk production
by 200 percent since the early 1980s. While demand
is also growing in developing countries, several
developing countries are now among the major international
suppliers.
In my view there seems little
long-term future for New Zealand in fighting for
supermarket shelf space simply on price with suppliers
such as China, India and Brazil. The ripest opportunities
for New Zealand’s future growth are, trade barriers
aside, in the increasing global demand for high-value
products in high-value markets.
We can compete most effectively
by differentiating our food and beverage exports
as “safe products from sustainably managed farms”.
More affluent and middle-class consumers are rapidly
increasing in numbers across Asia and are a growing
market for higher-value superior goods.
As the Minister of Agriculture,
Hon Jim Anderton, recently pointed out, the value
of the clean, green, 100% Pure brand is leveraged
by New Zealand exporters to sell tens of millions
of dollars of product every day. Our competitive
advantage in selling to the world premium-quality,
sustainably produced food is enormous.
But we must be aware of the
rising trend towards ethical consumerism that
is affecting investment and consumer behaviour.
Issues such as fair trade, sustainable
sourcing, humane treatment of animals, and wise
use of natural resources are factors in decisions
to purchase particular products. This may lead
to further changes in the way supermarkets source
their produce and how food is produced for certain
markets.
The Institute of Grocery Distribution
in the United Kingdom reports that sales of “ethical”
products are increasing by 7.5 percent a year,
compared with 4.2 percent for conventional products.
The European market for organic
products was worth 20.7 billion euros in 2004
and has grown by 26 percent since 2001. Underlying
it is a growing concern about the environmental
impact of artificial fertilisers and pesticides,
as well as mainstream concerns about the consumption
of possibly dangerous chemicals.
One American food industry commentator
suggested recently that “sooner or later, consumers
are going to wake up to the fact that where food
is sourced, and how it has arrived on the supermarket
shelf, can be just as important, environmentally
speaking, as how it was produced in the first
place”.
The UN Food and Agriculture
Organisation points out that: “Non-tariff barriers
still exist and appear to be growing, in the form
of requirements and regulations, related principally
to food safety and animal health but perhaps in
the future to other factors such as animal welfare
and environmental concerns”. Increasingly consumers
in our international markets want to be reassured
their food is produced in ways that respect our
natural environment and leave natural resources
in good shape for the future.
I don’t want to overplay this.
Price and commodity are still very important but
the trends and data suggest that, in trade terms,
the environment does matter. It can no longer
be regarded, or in some circles simply dismissed,
as an “externality”.
Business internationally is
starting to respond to these consumer concerns.
Here are just a few examples:
• California USA is one of the well-known players
in the international wine industry. The growers
of nearly half of the wine grapes in that American
state – more than 900 growers – have signed up
to a code of sustainable practices. They are using
cover crops to control erosion and improve soil
fertility. They are listening to non-farming neighbours
who have concerns about expansion plans or pesticides.
They are conserving water with precision irrigation.
The driving force behind this
move, winemaker Paul Dolan, says that a reputation
for environmental consciousness should help guard
the California wine industry against trade troubles
and get ahead on food safety and environmental
issues.
• Major companies such as Nestle and Unilever
have established the Sustainable Agriculture Initiative
Platform, a food industry body that supports the
development of agricultural practices that preserve
current resources and enhance their efficiency.
• Fonterra, a significant player in the international
dairy industry, is well aware of international
consumer expectations. This company, which covers
more than 95% of the New Zealand’s milk production
signed up to the Dairying and Clean Streams Accord
with central government and regional councils.
The Accord aims to minimise the impact of dairying
on New Zealand’s streams, rivers, lakes and wetlands
so that they are suitable, where appropriate,
for fish, drinking by stock and swimming.
There is undoubtedly business
self-interest behind these examples, but they
illustrate how seriously major international businesses
are taking the environmental concerns of consumers.
There are some environment-related
risks to New Zealand’s economic prosperity that
we as a country need to be aware of and respond
to if we are to maintain a competitive advantage.
Consumers are beginning to demand not just better
but demonstrated environmental and ethical performance.
There is also a growing international awareness
about greenhouse gas emissions, especially in
relation to transport of food, beverages, and
people by air.
Lincoln University has pointed
out that New Zealand exports are energy-efficient
when you take into account the total energy used
in the production and transport. However consumer
perceptions about food miles – the environmental
impact of transporting food to markets - could
affect our food and beverage exports.
Similarly, international concern
about greenhouse gas emissions from air travel
could potentially affect our tourism markets.
Recognising this concern, British Airways now
offers customers the option of paying a voluntary
extra levy to offset the greenhouse gas emissions
from their travel.
So what is central government
doing to achieve a healthy environment as the
basis for a vibrant economy and people’s quality
of life?
The Prime Minister said in her
statement to Parliament in February that “Environmental
and biodiversity protection, and conservation
of our wild and scenic places, loom large for
our government in maintaining New Zealand as a
special and unique nation.”
So environmental sustainability
is an important component of the government’s
strategic direction. The government recognises,
in particular, the need to focus on the challenges
in relation to fresh water and climate change
as essential to the economic transformation process.
I want to talk further now about
water and climate change, as they are important
for both a healthy environment and for a sustainable
economy based on natural resources.
The critical issue which links
these and other work of the Ministry is whole
of catchment management. How communities manage
land use and development, within the constraints
of our land and water resources, is key to our
economic and environmental future.
Current programmes such as the
Sustainable Water Programme of Action, flood risk
management, sustainable land management and climate
change policy all address aspects of this.
For example, forestry planting
can address erosion and water quality issues while
also acting as a carbon sink. Inhibiting fertilisers
may have benefits for water quality and for greenhouse
gas emissions.
Central government is committed
to leadership on this issue and to working with
local government to develop adaptable systems,
so that there can be local solutions to local
problems while dealing with the national issue.
Water is one of our most valued
natural assets and is at the heart of environmental
quality. However, collectively we face a number
of challenges in water management. We must focus
on how we can achieve economic prosperity without
the continued degradation, or depletion, of our
water resources.
Water is vital for irrigation,
generating energy, conservation, recreation, industry
and domestic uses. While we have an abundance
of fresh water in some parts of New Zealand, other
regions are facing growing demand for water but
have fully allocated – sometimes over-allocated
– streams, rivers and aquifers.
Irrigation accounts for 70 –
80% of water extracted in New Zealand, if we leave
out water used to generate hydro electricity.
The area of irrigated land in New Zealand could
potentially double within 20 years if we can find
the water required. The prospect of much drier
weather on the east coast of New Zealand, as a
consequence of changing weather patterns, adds
further impetus to the need for efficient water
management.
Equally of concern is the quality
of water in our lakes, rivers and streams, even
though we have dealt with most of the direct discharges
into waterways.
In a study of almost 1000 routinely
monitored rivers, more than 50% of sites in pasture-dominated
catchments showed significant nutrient enrichment.
We have developed in a way were urban streams
can fail both nutrient and bacteria guidelines.
Less than 50% of our popular
river bathing sites normally have good water quality,
while 11% of the monitored sites have been rated
as not safe for recreation. Of concern also is
the condition of some of our lakes, for example
around Rotorua, and even Lake Taupo is showing
signs of declining water quality.
Recognition of these issues
has led to the Sustainable Water Programme of
Action. Work is underway to improve the quality
and efficient use of freshwater, to manage the
undesirable effects of land-use on water quality,
and to provide for increasing demands on water
resources. We are halfway through this programme,
and next year will see significant results.
The government has stated that
water will continue to be managed as a public
resource and that water management will remain
the job of regional councils.
Stronger national direction
will emerge from the Sustainable Water Programme.
We are working on the scope of a national policy
statement for managing increasing demand and a
national policy statement for water quality.
Initial feedback from regional
councils about separate national policy statements
for managing demands, and for nutrients, bugs
and sediment, has identified a strong preference
for a single policy statement. There are potential
benefits in this idea, so we will be exploring
it further.
New national environmental standards
are also being developed.
Sustainable water management
relies on water users and regional councils knowing
how much water is actually taken, but current
information is limited and inconsistent.
A discussion document on a national
standard for water measuring devices will be released
for public consultation in the near future. A
technical working group has developed options
for a national environmental standard on environmental
flows. We expect to undertake public consultation
on this early next year.
A national standard covering
waterways from which drinking water is sourced
is well advanced and has been widely consulted
on. Cabinet approval for this standard will be
sought soon. We are investigating a national standard
for on-site wastewater systems, as a response
to local and community concerns about water quality
issues.
We are also seeking to provide
some extra tools to assist water managers where
locally developed water management solutions are
not working.
Partnerships are the key to
effective implementation on the ground of the
Sustainable Water Programme. We will cooperate
with local government, major water users, Maori
and other key stakeholders to develop targets
and programmes that will produce practical improvements.
A good example of partnership
is the Ministry for the Environment’s involvement
with local government and iwi to help protect
and improve water quality in Lake Taupo and the
Rotorua lakes.
The other key issue I want to
touch on today is climate change. The debate on
climate change appears to have finally moved beyond
discussion of whether it is happening to what
must be done to reduce emissions and to adapt
to the inevitable effects.
The amount of greenhouse gases
already released into the atmosphere means that
our climate will continue to change over the next
30 to 40 years, even if all emissions stopped
today.
Climate scientists say that
changes in New Zealand’s climate are expected
to result in more intense weather events, both
in terms of magnitude and frequency, and changes
to temperature and rainfall. In practice that
probably means more severe storms, floods, and
droughts, a drier east coast and a wetter west
coast.
With an economy based on primary
production and a settlement pattern dominated
by coastal communities, New Zealand will be affected
by climate variability. Though there is uncertainty
about the timing and exact nature of climate change
impacts, we must act now to safeguard our economy,
our environment and our quality of life.
I do not intend to go into specifics
today about climate change policy. As I am sure
you know, the Government is undertaking a major
revision of New Zealand’s climate change policies.
Draft proposals will be brought out for public
and sector group engagement by the Minister Responsible
for Climate Change Issues, Hon David Parker, in
the near future.
It is clear, though that global
action on climate change is in New Zealand’s best
interests. We must play our part. The Government
has reiterated its commitment to meeting our international
obligations and to encouraging others, especially
countries with high emissions, to help tackle
climate change.
The international effort to
reduce greenhouse gas emissions means that increases
in New Zealand's emissions are likely to have
an economic cost for this country. We should minimise
that cost by reducing our emissions.
If no action is taken, New Zealand's
energy-related greenhouse gas emissions are projected
to increase by 30% over the next 25 years, including
a 45% increase in transport emissions. The Government
has agreed that measures to reduce emissions make
good environmental and economic sense.
We need to use resources more
efficiently, conserve energy and avoid wasteful
practices. Often this will have wider benefits
– reducing vehicle emissions will improve our
air quality and public health as well as limiting
our greenhouse gas emissions. Better insulating
our homes so that they are warmer but need less
heating can reduce our emissions and improve our
air quality too.
We need to be better prepared
for the impacts of climate change in the future.
All areas of New Zealand life will be affected
by changes in our climate.
We must build resilience into
our agricultural production systems and into our
major investments such as infrastructure. Infrastructure
networks such as roads, sewerage, electricity
transmission, water reticulation and telecommunications
have useful lives measured in decades. The risks
to them, and the resulting costs, can be avoided
or reduced with proper planning.
Enhancing existing efforts to
prepare for climate change will be a major focus
of work for the Ministry for the Environment and
other government agencies in the coming months.
We will be working with decision makers and their
key advisers in both government and business to
ensure that climate change risk is effectively
factored into decision making.
The insurance industry is already
well aware of the costs of adverse climatic events
and is keen to see New Zealanders respond to significant
changes in weather patterns.
Campaigns to increase public
awareness will be a key focus of activity in both
the sustainable water programme and the climate
change work programme. You may already have seen
some of the advertising that is part of our water
awareness campaign, highlighting the value of
water to New Zealand’s “4 million careful owners”.
Finally, to summarise the message:
In the global economy of the 21st century, New
Zealand is competing not just to sell products
and services but also to attract and retain talented
people. To thrive as a community and in the international
marketplace, we will need to meet the expectations
of consumers who are beginning to demand better
and demonstrated environmental and ethical performance.
At the same time we will need
to provide a quality of life that is appealing
to talented New Zealanders, so that they will
stay in this country or return after their OE,
and to the skilled migrants we want to attract.
A clean and healthy environment can be our major
competitive advantage.
