Costs

Costs and benfits

Examples of costs:

Administrative costs - how much the policy/method costs the council to administer (including implementation and enforcement)

Compliance costs - how much it costs the resource user to comply

Broader economic costs - such as may result from constrained production, sub-optimal allocation of resources across the economy and reduced innovation may result from inflexible and/or highly prescriptive regulation.

Social costs - such as effects on recreational opportunities (for example, reduced recreational space in the coastal marine area as a result of the development of marine farms)

Environmental costs - an adverse effect on the environment that may result from, for example, allowing an activity that would not otherwise be allowed if not for the methods / rule. (For example, the loss of nutrients available to marine ecosystems as a result of further marine farms.)

Costs councils might face:

  • implementation - developing a plan provision, getting approval, dealing with enquiries, setting up grant systems
  • information and education
  • monitoring and enforcement
  • potential for increased costs associated with the Environment Court.

Costs resource users might face:

  • lost opportunities from the use of a resource
  • direct costs of modifying activities to meet new requirements
  • compliance costs of obtaining and processing information, applying for resource consents, and undertaking monitoring
  • downstream costs of challenging a provision, losing production or income, making financial contributions and paying charges, and economic uncertainty
  • potential increased need to challenge decisions of councils in the Environment Court.

Costs the community might face:

  • reduced employment and reduced economic efficiency
  • deterioration of relationships with resources
  • increased community workload in the Environment Court.

Examples of benefits:

  • environmental benefits - such as the protection of a particular habitat.

Social and economic benefits that might be associated with the attainment of the objective (such as retention of a rural school or other services as a result of greater subdivision and settlement).

Example of a table or matrix to help evaluate costs and benefits

 

 

Environmental

Social

Economic

 

Cost

Benefit

Cost

Benefit

Cost

Benefit

Council

 

 

 

 

 

 

Resource user

 

 

 

 

 

 

Wider community