Application of the Policy Choice Framework to Lake Taupo Catchment

Report: TR 2010/20
Author: Justine Young and Geoff Kaine

Abstract

Lake Taupo is a large deep lake in the central North Island of New Zealand. The Waikato Regional Council (the council) has statutory responsibility to protect water quality of the lake[1]. Maintenance of the lake’s very high water quality has been the aim of the council’s policy intervention over the past nine years.

In response to threats to the clarity of lake water from increases in diffuse sources of nitrogen from land use, the council initiated a policy process involving Ngati Tuwharetoa, national and local government agencies and owners of pastoral, forestry and undeveloped land. The resulting policy instrument chosen by the council was an economic instrument with supporting regulation. This took the form of a cap and trade of nitrogen, and a publicly funded charitable trust for the Lake Taupo catchment, the aim of which was to permanently remove nitrogen from the catchment.

The Policy Choice Framework (the PCF) was developed by the Practice Change Research Group of Department of Primary Industries, Victoria. The PCF is a systematic method for selecting policy instruments to achieve natural resource outcomes, by integrating research in the fields of economics, land owner decision making and behaviour, and organisational behaviour (Johnson et al. 2006; Kaine et al. 2008). The PCF has been applied in both forward and retrospective situations. For instance, it has been used to assess an existing suite of policy instruments and recommend changes (Kaine et al. 2008) and also in selecting policy instruments where details of the intervention to achieve the policy objective are still to be worked out (Johnson et al. 2009).

This report retrospectively applies the PCF to the biophysical, institutional and landowner context in the Lake Taupo catchment from 1999 to 2008. It is a re-interpretation of what happened. The Lake Taupo catchment was chosen as a case study because the council wanted to understand the far reaching implications of a novel and unprecedented policy intervention to cap and trade diffuse sources of nitrogen.

The PCF was used for this case study because it is a framework designed for situations where there is a high level of uncertainty about responses of land owners and institutions to intervention to achieve natural resource outcomes, such as occurred in the Lake Taupo catchment.

The purpose of the report was two-fold. First, it tested the usefulness of the PCF as a tool to be used in the future by the council to choose a package of policy instruments. Using a case study approach, the PCF is assessed as to whether, after highlighting the appropriate policy instrument to use, it revealed and accounted for land owner and then council’s organisational response to the chosen policy instrument. The second purpose of the report was to identify important aspects for the council’s continuing implementation of the variation in the Lake Taupo catchment. In the process of reflecting on past events, there naturally arises implications for future policy issues, and some of these are touched upon in the discussion section of the report.

The PCF has been applied solely to council actions to address non-point source nitrogen discharges from rural land. The focus of our analysis was on pastoral farmers as the council put most consultation effort into this group rather than owners of low nitrogen leaching forested or undeveloped land. The analysis also does not consider the council’s actions to address the lake water quality threat from human sewage.

The report begins with background information for the analysis, including the institutional and scientific context and the council’s decision making process. For detailed information readers are referred to the council’s evidence to the Environment Court in 2008[2]. The next section gives an overview of the PCF theoretical framework used, and the methods followed. Analysis of the background material on the process using PCF is presented, followed by discussion of the wider implications and additional policy issues. The final section of the report contains conclusions and recommendations for future action. Appendices contain detail on the conceptual frameworks that make up the PCF. Appendix 1 gives an overview of the PCF, Appendix 2 summarises the primary instrument selection, followed by land owner and organisational components in Appendix 3 and finally Appendix 4 summarises the theoretical framework concerned with organisational responses.

[1] Section 30(1)(c) Resource Management Act 1991 (RMA).

[2] For more information on the Council’s decision making and consultation see the Council’s Environment Court evidence in chief of Robert Brodnax and Justine Young (Brodnax 2008, Young 2008). A summary of the Council’s understanding of how nitrogen affects water quality in Lake Taupo is found in Environment Court Expert witness Bill Vant’s rebuttal evidence (Vant 2008).

Application of the Policy Choice Framework to Lake Taupo catchment [PDF, 273 KB]