One of the curious and beautiful things about doing business in New Zealand is that every year nothing really happens before Waitangi Day. Just ask an Auckland-er on Auckland anniversary weekend, or Christchurch-ite driving past abandoned Fulton Hogan road works. And so here we are, the first week of February, and I am pondering what there might be to say about the biodiversity conservation in the private sector, and biodiversity offsetting in New Zealand in general currently, this side of Waitangi Weekend.
I find there is a bit, if you know how to look. I deal in an industry that is a few years shy of being nascent – the biodiversity offset banking industry in New Zealand – so I’m practiced at finding small leads that signal bigger things to come. Such is the requirement of those wanting to see a sector emerge.
This year, at the start of 2016, here’s the first thing piquing my interest: How to economically conserve the edges of our waterways in agriculture land.
Radio New Zealand published a story on the 22nd of January reporting that:
“AgFirst farm consultant Phil Journeaux has been researching the impact of environmental constraints… he found dairy land values would be impacted by environmental constraints that affected profitability.”
In particular, there is concern that moves to tighten, and increase, fencing of waterways is going to effect land value and financial viability of dairy farms. NZ Farmer.co.nz also listed The Federated Farmer’s main concerns for 2016 – lo and behold, waterways and the use or fencing of riparian areas feature as number one.
This is a hot topic. Radio New Zealand went on to even suggest that the NZ Government is lying about it. Well, not quite. Dr Mike Joy (head of the January campaign to minimum standards in New Zealand’s freshwater) states that the Government’s focus on large-waterway fencing missed out the more efficient gains from small-waterway fencing. And besides, we need to reduce the amount of nitrogen getting in and that’s something a fence can’t do.
Hold on, I’m getting to the bit where it is relevant for biodiversity conservation and offset trading in New Zealand.
For the most part, the waterway fencing argument is shaping up like a familiar ‘conservation costs economic production’ argument. It’s an oldie but a goodie. I’m a strong believer in finding solutions that are economically sound, otherwise you’re robbing Peter to pay Paul and the solutions don’t last.
Around the same time I read this report from The USA where a recent study published in Proceedings of the National Academy of Sciences looked at whether their flagstaff conservation legislation – the Endangered Species Act – was actually hampering economic development by blocking economic development projects. It’s a criticism that’s been levelled at The Act since it first came into being in the 1970’s. For the first time it seems, they are getting it right, and the study is showing that economic development is NOT being hampered by the existence of The Act.
The study lists some possible reasons why this could be, and the reasons boil down to a ‘they are getting better at administering it’ summary. There’s been lots of policy and guidance written about The Act, a fair bit of case law, and quite a few projects to test and develop the tool on. The way the use The Act today is not they way they did 30 years ago. They’ve worked out a way to make it work.
To me, this says there are ways and means to make conservation legislation work in an economic sense. Good for the Environment does not have to me Bad for the Economy. But let me be clear, it takes elegant and informed policy and legislation to do this and this doesn’t happen overnight or by itself. But it can happen.
Here’s the bit where I get to the connection between New Zealand’s current agricultural waterways woes, and biodiversity offsetting in New Zealand.
What if we had a system whereby the areas near to the streams on dairy farms (or all other farms) could fence off the area, perhaps put a bit of riparian planting, perhaps attract a few key native birds and insects, then earn credits for that work. They could sell these credits to recover the cost of taking the land out of production. Not only would Dr. Joy’s nitrogen problem be considered, but most importantly, conservation of waterway edges wouldn’t have to come at a cost to the farmer at all. In fact, over time, choosing to allocate part of your property into riparian conservation might be the same sort of decision as putting part of your land in grazing, part of it in growing silage, and part into a grain crop. It certainly speaks to The Federated Farmers idea of considering fencing according to terrain, grazing, waterway and other contexts.
Of course, you need someone to buy the credits as well, and that’s where offsetting comes in. Someone who needs to offset a negative impact can buy a credit to ensure something positive is done where it’s needed. It’s not a simple or easy system to set up, but we have offsetting already in New Zealand, and even a stream offsetting program up in Auckland already. These kinds of ideas – already active overseas- are not out of our reach if we want to find better solutions to things that are clearly hitting our radar as things to solve.
Agriculture is a bedrock of our country and that’s not likely to change any time soon, nor would I want it to. The enviromental solutions that will have the biggest impact will be those that work in harmony with the agriculture sector, not against it. And lord knows, it needs all the help it can get. And it isn’t even Waitangi Day yet.