Water management in New Zealand: A road map for understanding water value - NZIER Working Paper 2014/01

March 18, 2014

Flexibility, social values key to solving water issues

A lack of understanding about the value communities place on water is hampering decision-making, according to a new report from NZIER.

One of the report’s authors, Dr Bill Kaye-Blake, says the findings show that important decisions are being made about how water is used but more needs to be known about community attitudes towards economic, cultural and environmental uses of water.

“If the politics and institutions reflect these values, the public can have better trust in the institutions and outcomes. That trust will improve the durability of water policy solutions, with benefits to both the economy and environment.”

The NZIER report - Water Management in New Zealand: A road map for understanding water – says solutions to contentious water issues will also require flexibility in how water is allocated, along with a better understanding of the value that people place on using water for economic, environmental and social purposes.

Dr Kaye-Blake says the recent Land and Water Forum and the Government’s National Objectives Framework have shown the complexities around water management. They also show there is momentum to deal with the issues, to achieve better environmental results and produce economic growth.

“Important decisions are being made now about how water is used, what rules should be developed, and whether major investments should proceed.”
“Water management cannot focus just on the economics of water. It has to account for the political pressures surrounding water allocation and use. It also has to take into account the institutional structure that currently exists or needs to be developed.”

NZIER also recommends reforms to water allocation, expansion of water trading, and set-asides to address environmental impacts. The recommendations are the result of NZIER’s investigation of the history of water policy in New Zealand and the experience with water trading overseas.

“In the countries we investigated, water policy changed over time, as it responded to new issues that arose and the unintended consequences of previous policies. Being flexible with water policy is important – we won’t resolve all the issues in one go.”

NZIER’s report supports the National Objectives Framework and its participatory, consultative process at the local level. It also suggests that the Framework needs to be supported by the kind of resources available to central government.

The report is part of NZIER’s public good programme of research, which supports research into areas of general interest to New Zealanders.

For further information please contact:
Bill Kaye-Blake, Principal Economist

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