1. A Comprehensive Proposal for a Stronger Accountability Framework for Environmental Outcomes    
Murray Petrie
IGPS Senior Research Associate,
IGPS Seminar
Victoria University School of Government
Thursday 5 April,

2. Overview Problem definition
National State of the Environment reporting
Comparative policy governance
Proposed changes to Environmental Reporting Act 2015
Better integrating environmental stewardship into government strategy and the budget process.
Concluding observations

3. I. Problem definition
Degradation of natural capital: (MfE and DOC BIMs, Brown et al 2015)
E.g. fresh water, bio-diversity
Limits to NZ’s economic growth model: (Productivity Commission 2017, OECD 2017)
Policy weaknesses: (Boston 2018, OECD 2017)
Environmental externalities; implementation of RMA; inadequate data
Weak policy governance:
Weaknesses in national state of environment reporting. Lack of requirements for government to set ex ante targets and to report ex post

4. II. Environmental reporting: the DPSIR model is the recognized international framework

5. II. National Environmental Reporting in NZ and Australia
First two reports 1997, 2007, then discontinued
Environmental Reporting Act 2015:
A domain report every 6 months, synthesis report every 3 years
Published by MfE and Stats NZ
Pressure/State/Impact (PSI) framework
National data without geographic breakdowns
PCE may choose to, and does prepare independent commentaries
No formal government response to the reports
Australia:
One comprehensive report every 5 years
Drivers and Responses in addition to PSI (DPSIR)
Also covers resilience, risks, and outlooks

6. III. Comparative policy governance
Parameter
Public Finance Act
Reserve Bank Act
NZ environmental governance
Swedish environmental governance
Legislated outcome targets No
Yes
[Yes]
Targets required
Milestones required

7. III. Comparative policy governance
Parameter
PFA
RBA
NZ Environment Reporting
Australia Environment Reporting
Independent monitoring reports
Yes
Monitoring reports contain:
- Forward looking data
- Risks
- Relative priorities
- Effectiveness assessment No
Any alignment with electoral cycle
Independent commentary
Mandated govt. response

8. III. Comparing governance frameworks
Compared to fiscal and monetary policy, for environmental policy there is a lack of legislative requirements for transparency of goals and targets, and independent reporting against them.
Significant gaps in national environmental reporting.
Recognize that environmental outcomes are extremely complex, not under government control, central, regional and local governments all play a role, and there are formidable measurement difficulties.
However, a good case for requiring the government to respond to each Environmental Synthesis Report stating its assessment, medium and long-term strategies, priority outcome targets, and to report regularly on progress.

9. IV. Summary of proposed changes to the Environmental Reporting Act 2015
Review report design, timing: better balance of frequency, effectiveness; review Act’s purpose.
Introduce full DPSIR framework: include drivers, and ex post assessment of central government responses.
Require geographical breakdowns for indicators e.g. by regional and local government boundaries.
Require forward-looking information on resilience, emerging risks, and environmental outlooks.
Invite the PCE to indicate, in commentary on each Synthesis Report, the critical few outcomes for priority government management in the next period, based on transparent criteria and reasoning.
Require formal government response within specified time to each Synthesis Report and to each PCE commentary, stating government’s assessment, its medium and long-term strategies, priority environmental outcomes with interim targets and milestones, and reports on progress in previous period.
Change the timing of Synthesis Reports so that each report is published, in the normal course of events, a specific number of months prior to each general election.

10. V. Better integrating environmental stewardship into government strategy and the budget process
Why use the annual budget cycle to achieve better integration of environmental stewardship with government strategy setting?
No regulatory policy cycle.
No national planning framework in NZ.
The budget is the government’s key policy mechanism, and the PFA refers to the achievement of government strategies, not just fiscal strategies.
There are many important, and increasingly important interactions between fiscal policy and the environment.

11. V. Fiscal Strategy Report: Outline of proposed chapter on Fiscal Policy and the Environment
Latest data on trends in key environmental indicators, resilience and risks, and policy implications.
Current government strategies, targets, recent performance, focusing on critical environmental outcomes.
The consistency of government’s environmental targets and announced targets in other domains.
Evidence on the environmental impacts of fiscal policies.
The anticipated positive and negative environmental impacts of the expenditure and revenue policies in the next budget.
The interactions between fiscal and regulatory policies in terms of environmental outcomes.
The potential for revenue and expenditure policies to improve critical environmental outcomes.

12. VI. Concluding observations: another hand on the elephant

13. VI. Concluding observations: avoid system overload

14. VI. Concluding observations: transition
Suggested changes could be introduced on a phased basis
New FSR chapter could form part of 2019 ‘Well-being budget’ (could subsequently amend the PFA to require it).
Changes to Environmental Reporting Act could start with revised purpose, timing and content of reports; add Drivers and Response (DPSIR); add geographic breakdowns; and require government response to synthesis reports.
Could subsequently add requirement for risks, resilience, and outlooks to be included in all reports; invite PCE to indicate critical priority outcomes; and align synthesis report with general election cycle.

15. VI. Concluding observations: implications
Significant resource implications for environmental reporting.
Need new cross-agency capabilities.
May need to review structure, membership of Parliamentary Committees.
Need to build political and public consensus and support.
Similar issues arise with respect to social policy.
The proposed approach is based on transparency, an approach that has proven sustainable and resilient in other domains.

16. Selected References
Boston, J. (2018). Investing in New Zealand’s Future Well-being: protecting and enhancing our natural capital. Policy Quarterly, Volume 14, Issue 1, February 2018.
Brown, M., R. Stephens, R. Peart and B. Fedder, (2015), Vanishing Nature: facing NZ’s Bio- Diversity Crisis, Auckland: Environmental Defence Society Incorporated.
Department of the Environment and Energy, Australia State of Environment
Ministry for the Environment, Environment Aotearoa 2015.
Ministry for the Environment, Briefing to the Incoming Minister. November 2017.
OECD (2014). OECD Environmental Performance Reviews: Sweden, Paris: OECD.
OECD (2017). OECD Environmental Performance Reviews: New Zealand, Paris: OECD.
Parliamentary Commissioner for the Environment. The State of New Zealand’s environment: Commentary by the Parliamentary Commissioner for the Environment on Environment Aotearoa 2015, June 2016.
Productivity Commission, Briefing to the Incoming Minister. November 2017.