1. INTRODUCTION (1)
In times of economic difficulty it is more important than ever for governments to be aware of the economic effects of public sector activity, whether this involves legislation, regulation, or the actions of government agencies and trading bodies. One area in which the economic effects of government actions are often ignored is environmental policy.
1.1 A BASIS FOR ENVIRONMENTAL POLICY
It can be argued that environmental matters are not an appropriate area for government involvement, and that a free market in claims upon the environment and in environmental problems would optimise the quality of life (economic and otherwise) of the community. For such a market to produce optimal results there must be readily enforceable and appropriately distributed private property rights in all significant environmental features (air, quiet, water, land, views, minerals, etc., etc.). Despite certain attractions, this is outside the realm of practical politics in Australia today.
A practical environmental policy must balance the conflicting demands of conservation and development, within the constraints (social, economic, political, legal) imposed by society. In a democracy, it is not possible to ignore the fact that many people, possibly a majority, believe that some features of the environment have values independent of any that man or his markets might ascribe, and that some people believe that conservation of such features is an absolute imperative.
We therefore take as a basis the conventional conservationist position that the environment includes irreplaceable and limited gene pools, ecosystems, and other features; that existing conservation areas are often particularly rich in these; and that some of them will turn out to be of enormous benefit to man (and no one can predict which).
We must all nevertheless recognise that the economic cake is not infinite, and that only a wealthy, well-educated, leisured society has the resources to make environmental conservation one of its priorities. Unfortunately, conserving environmental features usually means denying the community the opportunity to exploit natural resources; this reduces economic growth and with it the community's ability to conserve.
1.2 THE NEED FOR COMPROMISE
In other words, compromises must be made, based on the costs and benefits of development or conservation. Where activities are of low net environmental cost and high net economic gain (for instance, a highly productive underground mine, able to be rehabilitated and not endangering any endemic species) they should be permitted. This approach is in accord with the letter, if not the current practice, of the existing National Conservation Strategy for Australia (see the Appendix to this chapter) endorsed by Commonwealth and State governments and by conservation groups.
The problem remains, however, of ensuring that aesthetic, scientific and conservation values are given neither too little nor too much weight. At present, the system encourages conservation groups vociferously and dramatically to adopt positions absolutely opposed to development (supine in front of a bulldozer, for example). When conservationists believe they have nothing to gain from development, and something to lose, absolute opposition makes sense; the need to attract media coverage to exert pressure on developers and politicians, especially in situations where conservation groups have no formal standing, explains most of the histrionics. Much of what follows is aimed at engaging conservationists in constructive, responsible compromises between preservation and development. This will be acceptable to the large majority of conservationists and will help isolate the few whose conservationism is a façade for a radical political agenda.
1.3 SCOPE AND AIMS
We consider environmental policy only so far as it impinges significantly on the economy. The Commonwealth's direct responsibility is confined mainly to the Northern Territory and offshore areas, but most of the recommendations are directly applicable to the States, which might follow the example of effective and responsible Commonwealth policies. In any case the Commonwealth has responsibility for the four largest economic burdens imposed in the name of conservation -- Jabiluka, the Barrier Reef, Fraser Island and the Franklin River.
2. ECONOMIC EFFECTS OF CURRENT POLICIES
Economic penalties of environmental policy can be clearly divided into two areas:
- Regulatory interference with employment-, profit-, foreign-exchange- and revenue-generating activities.
- Commonwealth expenditure on environmental matters.
The first of these has by far the greater effect.
2.1 REGULATORY EFFECTS
Many environmental regulations have negative economic effects: for instance, the near-total ban on economic activity in National Parks and other reserved areas, the quota on kangaroo culling, the prohibition on export of flora and fauna, and the mandatory transition to unleaded fuel. All are well-meant, most have little impact on the economy as a whole, and some have sound thinking behind them.
In the last category for instance, the general prohibition on wildlife export at first sight prevents the development of trade in abundant species. It has, however, been repeatedly estimated that the cost of providing customs officers trained to identify rare (and highly-valued) species upon export would outweigh the potential benefits.
In contrast, the quota on kangaroo culling is probably counterproductive (as farmers resort to illegal poisonings in a perceived need to protect their livelihood), pointless (since kangaroo abundance or scarcity provides a self-regulating mechanism), ridiculous (since the three species under quota are by far the most abundant kangaroos while the other 45 species, some exceedingly rare and endangered, receive no public attention); it is commonly regarded as a waste of time, funds and resources by the authorities. Nevertheless the minor economic benefits of abolition and the noise that would be made by the anti-killing lobby make such a course of low priority.
The cost of switching to unleaded petrol is substantial but difficult to quantify and, with the full health effects not clear, is probably difficult to oppose. (The rotten-egg gas sometimes given off by catalytic converters shows how easily attempts to tackle one environmental problem may give rise to another.)
The most costly regulations are those preventing economic activities within National Parks, National Estate areas, and the like (referred to below as "conservation areas"). We therefore consider these in some detail.
2.2 ECONOMIC ACTIVITY IN CONSERVATION AREAS
2.2.1 Intensive and Extensive Economic Activity
When considering the potential for economic activity within conservation areas we must distinguish between intensive and extensive. Intensive activities focus on particular sites: for example, mines, factories. Extensive activities tend to use most of the land rather than particular parts of it: crops, grazing, some kinds of forestry, the depredations of introduced pests. The distinction is not hard and fast: a very large open-cast mine in a very small conservation area will devastate it as effectively as clear-felling (but rehabilitation is possible, although slow, after either); intensive activities sometimes have extensive side-effects (e.g. pollution) although these would be controlled if there were sufficient incentive to do so.
A new policy should recognise that the vast majority of ecosystem and Simultaneously, the Government should consider an early and |
The reason for making the distinction is that the environmental resources that most people want conserved, but for the conservation of which there is now little economic incentive (ecosystems, soils, waters, gene pools, scenery, species, forests etc.), are themselves almost always of an extensive nature, and are seldom threatened by intensive (localised) activity.
Most opposition to the declaration of conservation areas comes from proponents of intensive activities (notably miners and dammers). Extensive agricultural or pastoral activities seldom conflict with proposed conservation areas, mainly because these industries already occupy most suitable land, and their degraded expanses are rarely considered attractive for environmental claims. Clear-felling forestry and high-country grazing are the principal exceptions; no such disputes fall directly under Commonwealth jurisdiction.
2.2.2 New or Enlarged Conservation Areas
A policy such as this would greatly reduce opposition from competing interests to declaration of new or enlarged conservation areas. Some proposals for funding and management of these are made below.
Through means such as this the active support rather than opposition of conservation groups could be gained. Such a policy would deliver both a net improvement in genuine environmental protection and an increase in the community's economic wealth (and thus its ability to safeguard and enjoy its environmental wealth).
2.2.3 Costs of Conservation
It is not easy to estimate the total cost to the national income of present restrictions on economic activity in conservation areas. We can, however, offer very rough estimates of some of the benefits foregone.
Onshore Minerals
Total mineral exports in calendar 1984 were approximately $10,300 million or around 40 per cent of total exports. Approximately 4 per cent of Australia's land surface is estimated by the Australian Minerals and Energy Council (AMEC -- a standing committee of Mines and Energy Ministers) to be in National Parks. Heritage areas, and other areas in which mineral exploration and mining are prohibited for environmental reasons, further increase this figure. The total proportion of the land surface area unavailable, or available only with severe restrictions (including Aboriginal land, urban areas and military areas), is estimated at 23 per cent. Taking a figure of 6 per cent as the total area excluded on environmental grounds, and assuming prospectivity similar to the remainder of the continent, yields proportionately an export figure of $618 million. Since conservation areas are weighted in distribution toward the coast (in which locations most mining becomes much more economic) there is no reason why prospectivity may not be greater.
These figures provide no solid indications and the annual income foregone may be much smaller or much greater. Since virtually all mineral products are either exported or are straight import replacements, the appropriate figure can be deducted straight from the trade deficit.
In a few cases some mineral exploration took place prior to the imposition of environmental restrictions and there is therefore some knowledge of embargoed mineral reserves. Even then no upper limiting figure can ever be known with certainty.
The Mineral Sands Producers Association has estimated that $1500 million of proven mineral sands reserves are locked up on Australia's east coast. The vast majority of this is due to environmental restriction on four deposits -- Fraser Island, Moreton Island, Cooloola and Myall Lakes. Although devastating in the short term, mineral sand mining is in fact eminently well-fitted for rehabilitation. After removal of the one to five per cent of valued product the otherwise unaffected normal beach sand can be replaced in identical form and position, and revegetated with the (usual) low heath vegetation in a fairly short time. The first two deposits above have export licences refused under the Australian Heritage Act, even though in both cases the area proposed for mining (and rehabilitation) was a tiny fraction of the area placed on the Register, and even though in both cases the remainder was proposed for conservation by State government.
The Fraser Island and Moreton Island projects should be given |
The refusal of export licences is simply reversed by Ministerial decision but it is not clear if this is possible under the existing wording of the Act (see section 4.3 below).
The Northern Territory Chamber of Mines has estimated the additional mineable reserves of uranium U308 alone in Kakadu National Park as at least a million tonnes, worth approximately $66,000 million at $30/lb. Given the very limited exploration that has occurred reserves could be much greater. There are proven reserves of 207,000 tonnes at Jabiluka and 13,000 tonnes at Koongarra with many other favourable targets. Jabiluka had firm contracts for 17,000-27,000 tonnes ($1,122-$1,782 million at $30/lb) and advanced agreement for 55,000 tonnes ($3,630 million). First stage annual capacity is 4,500 tonnes of uranium and 15,000 ounces of gold ($305 million p.a.) expandable to 9,000 tonnes a year ($710 million p.a.). The markets are there, in greater size than this, and are currently supplied by Canada, South Africa and the USA, so Australia is directly foregoing this revenue and probably much more. The question of mining and export of uranium is examined in the second part of the Appendix to this chapter.
The Ranger mine is an excellent example of a typical high-value, intensive mining venture operating with minimal effect on the surrounding national park. The majority of the local Aboriginal community, at first doubtful about the project, now support further mining. Ranger's success in blending highly rewarding (for Australia) mining activity with maintenance of conservation values should show the way for future optimal environmental policy.
Immediate go-ahead should be granted for Jabiluka (and later |
This project is currently halted by the withholding of sales approvals, which can be rectified by ministerial decision.
Exploration for, and mining of, further deposits is possible with a new "Plan of Management" but this requires the approval of both Houses of Parliament. Substantial foreign capital expenditure would occur in any further exploration or mining construction. Mineral exploration is not normally damaging to the environment in any significant way, but a strict set of guidelines can easily be formulated for even greater safety.
Legislation and Plans of Management for conservation areas should |
Franklin Dam
The Tasmanian government was compensated to the tune of $277 million in 1983-84 for the Commonwealth's veto of the Franklin Dam, having refused to relinquish the dam voluntarily for this sum. Presumably, therefore, this is a rough indication of the discounted present value of future economic benefits foregone by Tasmania (and Australia). The dam was halted first and the cost calculated later.
It may be argued that the Franklin Dam should not be considered as an intensive activity, but in fact it is an indication of the extensive nature of many environmental resources that the proposed dam would have occupied 1 per cent of the South-West heritage areas, and that despite the intensive scrutiny, it eventuates that no species or localised populations of any kind were threatened. The only localised feature threatened was a large cave of archaeological interest, which could (in an operation reminiscent of the Aswan monuments) have been be intensively excavated prior to flooding. Ultimately what was saved was scenery, and it is a matter of individual opinion whether some better use could have been found for $277 million of taxpayers' money: schools, hospitals, deficit reduction, or other environmentalist projects. No sensible debate was conducted on this point. A possible way of finding the value of the dam would be to tell the Tasmanians they could build it after all -- if they paid back the $277 million first.
As discussed in the Government and Administration chapter, people |
Offshore Petroleum
The Great Barrier Reef Marine Park currently covers some 98.5 per cent of the reef area, a massive 348,700 km2, larger than the UK and Ireland combined. Oil exploration is forbidden throughout the reef area, most of which is considered prospective for petroleum. Without exploration no proper estimate of reserves is possible, but taking an average proven reserves figure (181 barrels per square kilometre in 1984) for the rest of Australia and its continental shelf gives a pro-rata figure of 63 million barrels worth $I,900 million at A$30 per barrel.
Large amounts of expenditure would be undertaken within Australia by companies exploring this region even if no commercial fields were discovered. Substantial revenue would accrue through a permit bidding system.
Even a massive oil spill would endanger (temporarily) only a tiny proportion of that reef which is at or above water level, itself a tiny proportion of the entire reef. Modern techniques give the oil industry an excellent safety record in this regard, and techniques are available to counter any conceivable spill: the problem is to ensure that they are used.
The Government should permit oil exploration on the Barrier |
Petroleum exploration and/or production within the Marine Park would require amendment to section 38(2) of the Great Barrier Reef Marine Park Act 1975. Areas may be removed from the Park by proclamation, but this would in practice need the consent of Parliament.
2.3 DIRECT FINANCIAL COST
Compared to the economic losses due to environmental regulation, the direct financial burden of Commonwealth involvement is relatively minor. The same is true with regard to the States. Normal Commonwealth expenditure on environmental areas (capital and recurrent) in 1983-4 totalled $22.2 million (excluding the extraordinary twelve times greater Franklin compensation). This may be compared with the same Commonwealth department's expenditure on administration above the National Parks and Wildlife Service level ($20.9 million) and on various arts areas (Australia Council, Film and Television School, Film Commission and National Gallery: $77.4 million). The environmental expenditure is made up as shown in the table overleaf.
Environmental Funding -- Distribution
|
Grants went to 34 "voluntary conservation organisations" and to 33 institutions (mainly universities and museums) and academics under the Australian Biological Resources Study. More than 200 small grants were made under the National Estate Program to local bodies for heritage/historical/environment works and studies. Most of this expenditure is unexceptionable and some may yield comparatively large returns for small outlays. This sort of expenditure can be seen as a kind of privatisation: most of the funds find their way to highly motivated, enthusiastic groups and individuals who are in effect contracting for all kinds of works and researches.
Perhaps the greatest exception is in the first category where the Australian Conservation Foundation receives by far the largest grant of $120,000. This, the premier Australian conservation organisation, is also one of the most absolutist and has little grass-roots involvement.
3. IMPACT STATEMENTS: ENVIRONMENTAL AND ECONOMIC
Governments now require assessment of the environmental effects of most significant development projects before approval is granted. An Environmental Impact Statement (EIS) is prepared for each project (or stage of a multi-stage project). The structure of the planning approval process has tended to favour EISs which try to examine all possible environmental effects but do not examine the implicit economic trade-offs between development (under more or less strict controls) and conservation. This divorce of environmental considerations from economic consequences both militates against rational decision-making in the approval process and makes it easier for groups radically opposed to development to sustain a credible position in the eyes of the public.
It is seldom easy to put an explicit dollar value on an environmental feature or on the quality or continuance of life. Implicitly it is done all the time: for instance, road deaths would be much reduced by a national 40 km/h speed limit but the implicit consensus of society is that the cost in travel time, higher labour costs and lower capital utilisation in the transport industries, and so on would outweigh the value of the lives saved. The present environmental impact assessment process implicitly assigns values by its decisions, but does not explicitly consider the trade-offs.
The Government should require environmental impact statements for The State governments should be encouraged to follow suit. |
4. EASING THE BURDEN OF REGULATION
We have seen that by far the most important economic penalties imposed by environmental policy in Australia result from restrictions placed on productive activities in conservation areas, which probably cost the community more than a billion dollars a year. Compared with these costs other areas of environmental regulation or direct government expenditure impose little burden in Australia.
The nature and effects of regulatory restrictions were discussed in sections 2.2 and 2.3 and recommendations made there in regard to general thrust and specific activities.
Three further general recommendations are made here.
4.1 COMMON ENVIRONMENTAL GUIDELINES
The Government should set up a Commonwealth/State committee to |
The committee should be established through the Australian Minerals and Energy Council (AMEC) and include representatives from each State, the Commonwealth and the Northern Territory. The committee should seek submissions from mining and conservation interests, and publish its draft reports, but should not be required to hold public hearings. Its existence should not delay the implementation of the recommendations in section 2.2, but should yield a standard policy framework for the future.
At present the interface between mining and environmentalism is a shambles, with very different rules regarding national parks, Aboriginal land, sacred sites, fossil reserves, groundwater protection, heritage areas, and so on. In addition the rules vary from State to State. Even outside conservation areas, mining companies have to deal with numerous government bodies and layers of regulation in each State, and disputes are often ultimately resolved ad hoc. Superimposed over all this is the fear of Commonwealth involvement in the form of land rights, export bans, the Australian Heritage Act and World Heritage listings. The costs to the nation in delays, abandoned projects and reduced foreign investment are considerable. A simpler and more consistent approach is urgently needed.
Without exploration no idea can be gained of the nation's hidden resources; and without such knowledge it is hardly possible to have rational debate on whether total prohibition is justified, or whether and under what conditions mining should take place. In the majority of cases mining can be carried out with negligible lasting disturbance to the environment if special provisions are made. The richer the ore body, the greater the financial capacity to eliminate damage (underground mining, careful siting of shafts and treatment plant, disposal of waste etc.). Exploration itself can almost always be carried out without significant damage and should be allowed on conditions that ensure that is the case.
The committee therefore should work toward a simplified set of guidelines (compatible as far as possible with existing State mining and environment legislation) allowing exploration in virtually all areas, with the right to mine and export guaranteed once a tenement for exploration has been granted, except in conservation areas. No orders for conservation, heritage listing, etc. should be possible after grant of tenement.
In conservation areas too, the granting of a tenement should preferably carry the right to proceed to mining and export, but the right to mine should also be subject to the approval of a suitable minimum environmental impact plan by the Minister (or a statutory land and environment tribunal). If this is unacceptable, a register could be established of areas of outstanding conservation importance, in which an exploration tenement does not imply the right to develop a mine. Mining companies can then take their chances with exploration on the known outcomes of such procedures. The important principle is not to change the rules part way through the game.
4.2 SETTLING ENVIRONMENTAL DISPUTES
Compared with other nations Australia relies on mining and mineral exports to a massive extent, and in the emerging economic crisis these industries still provide the best hope for increased exports. Australia is also an advanced, affluent nation where people's thoughts turn more and more to the quality of life and the environment. In these circumstances one can expect more conflict between miners and conservationists here than in most other nations. The conflict will be the more acrimonious as long as victories depend on influencing the political process, and might be reduced by the existence of a statutory body held in high repute by all that takes broad benefit/cost considerations into account in adjudicating such disputes.
Consideration should be given to the establishment of a Land and |
Some states have already moved towards this situation, with similar bodies as the initial line of adjudication over environment-mining-agriculture disputes etc.
4.3 THE AUSTRALIAN HERITAGE ACT
At present, in the absence of a framework as above, the Australian Heritage Act constitutes one of the major uncertainties and obstacles to exploration and mining. After any amount of mineral exploration, granting of mining leases and even capital expenditure, any area can be nominated by any person and registered by the Heritage Commission without consideration of optimum land use policies; whereupon under S.30(1) of the Act the Minister must, in brief, do all in his power to ensure that nothing "adversely affects" the area unless "there is no feasible and prudent alternative". The Commonwealth Minister's action usually involves export licences and/or foreign investment or borrowing controls. This Act already directly prohibits two mining projects (Fraser and Moreton Islands) and the uncertainty it produces has caused delays, interference and abandonment of many other exploration projects.
Until the development of an integrated policy approach as outlined |
It may be that this intention is encompassed in the words "feasible or prudent alternative", but the Act has not yet been interpreted in this manner. Disputes under this legislation provide another example of matters perhaps best decided by mining, environmental and economic experts sitting as a Tribunal or Court.
5. DIRECT COMMONWEALTH
EXPENDITURE ON THE ENVIRONMENT
Although yielding only minor immediate economic gains, one particular change in this area might yield important longer-term results.
Actual maintenance of reserve areas is largely a round of physical, often menial tasks -- dealing with tracks, rubbish, toilets, pests, signs, fences etc. It is not clear that this type of work is particularly suited to public service conditions and, especially in more remote areas, work practices leave something to be desired. On the other hand, conservation is clearly an area which can attract large numbers of eager, committed people.
Consideration should be given to the tendering-out of reserve |
Diverse groups would no doubt apply, for diverse reasons. These would include local government bodies and tourist authorities interested in enhancing regional attractions, Aboriginal groups seeking income and territorial identification, naturalist groups of all descriptions, conservation bodies and probably professional park management concerns. In all cases, however, in addition to likely cost savings due to competitive tendering by rival groups, an element of the user-pays principle would have been indirectly injected, and local familiarity with real world problems would be available (cf. the bureaucratic inefficiencies of distant Canberra). The enthusiasm of such interested parties can be expected to lead to better tourist facilities, increased information provision, nature observation points and signs etc., greater community involvement, higher education values, elimination of bureaucratic delays, better pest control, etc.
The National Parks and Wildlife Service would then be confined to a research, policy, regulation and monitoring role, which its professional staff might well prefer.
The greatest benefit from such a change, however, might accrue in the long run, from the requirement for conservation campaigners to "put their money (or at least their effort) where their mouth is" and the likely development of more realistic attitudes when involved in down-to-earth management activities. It is already noticeable that conservation professionals tend to have a much more realistic appreciation of the position than the more voluble city-based organizations (e.g. the ACF and Greenpeace).
Commonwealth changes alone would not yield major benefits but success would encourage State initiatives.
In theory the implementation of this measure poses no great difficulties since, under Section 35 of the National Parks and Wildlife Conservation Act 1975, the Director may, with the Minister's consent, engage persons outside the NPWS and the public service to provide services. However the current park management staff are employed under the Public Service Act and difficulties would apply, similar to those involving any reduction of the public service. It is not clear whether staff would eagerly grasp the opportunity to contract as self-employed, undertaking similar work tasks.
6. GENERAL POLICY INITIATIVES
The vital requirement for a sensible, enduring and popular environmental policy is to inject a note of cost-benefit analysis into the thinking of conservation lobbies. This is easy to propose and harder to achieve. One way would be to vest property rights in conservation areas in various environmental groups and demand that the whole operation be self-supporting, whereupon economic rationalism would no doubt rapidly rear its head.
This is simply not practical medium-term politics in Australia. On the one hand, complete privatisation of the environment as mentioned in section 1.1 would require establishment and distribution of a myriad new property rights, and overhaul of the legal system to keep the costs of transfer and enforcement within reason; it is fair to describe the necessary changes as revolutionary. On the other hand, a general vesting of limited property rights in conservationist groups would present intractable problems such as: the impossibility of ensuring in any way the character of groups or individuals who might gain control of such organisations; the inequity of handing huge tracts of land to tiny minorities; the possibility that even well-meaning groups might indulge in disastrous mismanagement and above all the acceptance that there exist some limited environmental resources and values (e.g. rare species and ecosystems) best ultimately controlled and managed in the public interest.
There may be however a number of less contentious steps which can be taken to introduce a note of rationality.
6.1 RESTRICTED TRANSFER OF PROPERTY RIGHTS
Although a general vesting of property rights in conservationist groups is impractical, the concept should not be ruled out altogether. In one case in the United States, the Audubon Society's attitude to oil drilling in a reserve changed from fierce, absolute opposition to approval after the society had been given control over the reserve: it could impose conditions on the oil company to protect important features of the environment, but stood to gain financially from exploration and exploitation of the oil. The society was thus forced to weigh the costs and benefits of letting the oilmen in. Everyone gained: the government got rid of a hot potato, the oil company was able to drill (but subject to more stringent environmental controls than usual), and the Audubon Society preserved the most important features of the reserve and received money it could spend on other environmental purposes.
Where opposition from conservationists is effective enough to make |
Such situations will, however, more often be encountered by State than by Commonwealth governments.
6.2 CAREFUL DIRECTION OF FUNDING
The Government should make its funding of conservation bodies (minor in a total budgetary context but often major to the recipients) contingent on the exercise of cost-benefit analysis in all conservation claims, proposals, arguments and publications. Bodies not willing to submit to this discipline could simply do without the money.
The ACF's grant should be cut if it will not play by these rules. Grants to international groups such as Greenpeace, who have been accused of exploiting only the most emotive issues, to raise funds for undisclosed international purposes, should in any event be terminated.
This measure would have a salutary effect in the long run, although at first the standard of analysis might be low. Organisations that eschew traditional conservationist absolutism and genuinely seek economic compromises should be rewarded with preferential funding in future. To require groups in receipt of public funds to consider Australia's net interests is no outrage.
There should be no difficulty in taking this step, as the $0.6 million disbursed in 1983-84 to voluntary conservation organisations and the $3.0 million under the National Estate Program appear to be at complete departmental (ministerial) discretion.
6.3 TRADE-OFFS IN CONSERVATION
The Government should miss no opportunity to explain and At the same time it should do everything it can to involve |
Conservation groups (and their supporters in the Senate) can be offered protection of this area of much desired rain forest (possibly in conjunction with State government), for the allowance of mining in that small area of National Park (with restoration), cessation of clear felling in this area for selective logging in that. In return for a legislated, sensible overall policy allowing strictly controlled intensive usage of small areas, the conservation movement could be explicitly granted a very large increase in areas under protection (from extensive activities) and much better maintenance and pest control.
Such deals can be done even in areas beyond Commonwealth control by purchase from State or private sources, or by agreement with States in return for required legislative changes.
6.4 THE LONG TERM: EXPLICIT LINKAGE OF ENVIRONMENTAL FUNDING
In the long term, environmental lobby groups must be made to realise the financial effects of absolutist opposition to development. One way to help in this is to link funding for environmental and conservation purposes to development activity. For instance, licences for economic activity in conservation areas should provide for a levy, the revenue from which should be used exclusively for conservation and environment purposes. The levy could be equivalent to the current royalties on mineral or petroleum production, or even higher. For other ventures, the levy could be deducted from ordinary taxation, or part of it. The higher the levy, the less the incentive to exploit conservation areas. It is important that the formula for the levy be established in advance of development and not subject to change (at least as it applies to a particular project). Setting aside part of exploration permit auction fees for the same purposes would ensure that benefit accrued and was seen to accrue from the beginning.
Possible uses for the levy revenue include buying private or State-owned rainforest subject to subdivision, and re-establishing endangered species in newly-protected habitats, to name but two. The conservation lobby will no doubt express views on where to spend the money, and should be listened to if not necessarily obeyed. Setting aside part of exploration permit auction fees for the same purposes would ensure that benefit accrued and was seen to accrue from the beginning.
In an obvious refinement, all aid to the conservation movement would be strictly tied to this same source of funds. Grants to voluntary groups, research bodies etc., could all be strictly tied to the level of economic activity in reserved areas. The sums available might be much greater than is now the case, if a sensible balance were struck. A bigger slice of a bigger cake!
The ideal manifestation of this approach, however, would occur if the totality of environmental funding were in some way rigidly and explicitly linked to the level of economic activity in reserved areas. This can be done quite practically, and avoiding extreme annual fluctuations, or any severe distress, by taking (in relation to 1983-84 expenditure of $17.7m) a base of say $15 million above which all environmental spending (capital, recurrent, grants, research) would derive from the imposts on economic activity in reserves.
This should include income from current activities such as the Ranger mine, so as clearly to demonstrate the mechanism and desirability of the arrangement. That funding for conservation and conservation bodies should derive substantially from uranium mining in National Parks and that funding should increase with more mining and greater efficiency, would throw the issue into stark focus and admirably demonstrate the connection between affluence and concern for the environment.
In this situation we would finally get some idea whether a virgin Franklin River is really worth $277 million to Australia or whether even conservationists would rather have most of the Franklin, a nice lake, cheaper power and say $50 million (why not Si00 million?). Conservation groups could of course reject the receipt or expenditure of this "tainted" money or they could influence its allocation.
ENDNOTES
1. This chapter owes much to Steven Carr, but opinions expressed in it should not be assumed to be his.
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