Hostname: page-component-586b7cd67f-vdxz6 Total loading time: 0 Render date: 2024-11-23T22:51:33.508Z Has data issue: false hasContentIssue false
  • English
  • Français

Challenges in Including BCA in Planning Approval Processes: Coal Mine Projects in New South Wales, Australia

Published online by Cambridge University Press:  17 June 2015

Robert Gillespie  and
Jeff Bennett
Robert Gillespie*
Affiliation:
Gillespie Economics, Sydney, New South Wales, Australia, e-mail: [email protected]
Jeff Bennett
Affiliation:
Australian National University - Crawford School of Public Policy, Canberra, Australian Capital Territory, Australia, e-mail: [email protected]
*
*e-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

A requirement for project proponents to include a benefit-cost analysis (BCA) as a component of their environmental impact assessments is implied in planning approval legislation in New South Wales, Australia. Fulfilling that requirement in the context of three large-scale expansions of coal mines has led to the application of choice modeling to estimate values for the main environmental, social, and heritage impacts. A number of particular issues have emerged in those applications: the framing of choice sets so that incentive-compatible willingness-to-pay questions are asked; the inclusion of “existence values” associated with employment opportunities provided by mines; and the incorporation of environmental offsets as part of the choice task given to respondents. The benefit-cost analyses of the coal mining projects have proven controversial. While the government agency responsible for administering the project approval process has used them as an input to decision-making, in some cases its recommendations have been “over-ridden” by the imposition of subjectively determined administrative rules. In one case, an appeal through legal channels against an approval was successful in part because the judge who heard the appeal dismissed the BCA findings because it was contrary to his own viewpoint of the merits of the case. In response, the state government has introduced legislation that requires greater “weight” to be given to the development benefits of coal mining. These responses have left the role of BCA and nonmarket valuation in the decision-making process in “limbo,” with practitioners and policy makers unsure as to the future of the methods in politically charged contexts.

Keywords

EnvironmentInternationalLaw and regulationbenefit-cost analysischoice modelingdecision-makingregulation
Type
Articles
Information
Journal of Benefit-Cost Analysis , Volume 6 , Issue 2 , Summer 2015 , pp. 341 - 368
Copyright
© Society for Benefit-Cost Analysis 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Arrow, K., Solow, R., Portney, P., Leamer, E., Radner, R. & Schuman, H. (1993). Contingent Valuation Methodology Report, Report of the NOAA Panel on Contingent Valuation. Federal Register, 58, 4602–4614.Google Scholar
Australian Government (2013). Best Practice Regulation Handbook, http://www.dpmc.gov.au/deregulation/obpr/handbook/index.html.Google Scholar
Baker, R. & Ruting, B.(2014). Environmental Policy Analysis: A Guide to Non-Market Valuation, prepared for the Productivity Commission.Google Scholar
Bennett, J. (2008). Defining and Managing Environmental Flow: Inputs from Society. Australian Economics Papers, 27(2), 167–183.Google Scholar
Blamey, R., Rolfe, J., Bennett, J. & Morrison, M. (2000). Valuing remnant vegetation in Central Queensland using choice modelling. The Australian Journal of Agricultural and Resource Economics, 44(3), 439–456.CrossRefGoogle Scholar
Boardman, A., Greenberg, D., Vining, A. & Weimer, D. (2001). Cost-Benefit Analysis: Concepts and Practice. Englewood Cliffs, NJ: Prentice Hall.Google Scholar
Campbell, R.(2012). Affidavit of Roderick Campbell 6 July 2012, Land and Environment Court, Bulga Milbrodale Progress Associated Inc. v Minster for Planning and Infrastructure and Warkworth Mining Limited 2013.Google Scholar
Department of Environment and Conservation (2005). Approved Methods for the Modelling and Assessment of Air Pollutants in New South Wales, New South Wales Environment Protection Authority, Sydney.Google Scholar
Department of Finance (1991). Handbook of Cost-Benefit Analysis, AGPS.Google Scholar
Economists at Large (2013). Bulga Extension Project Environmental Impact Statement: Appendix 18 Economic Impacts, a submission to the Environmental Impact Statement, prepared by Economists at Large, Melbourne, Australia.Google Scholar
EMGA Mitchell McLennan (2010). Warkworth Extension Project Environmental Assessment, EMM, Sydney.Google Scholar
Environmental Protection Authority (2000). NSW Industrial Noise Policy, EPA, Sydney.Google Scholar
Ergas, H. (2009). In Defence of Cost-Benefit Analysis. Agenda, 16(3), 31–40.Google Scholar
Farrier, D. & Stein, P. (2011). The Environmental Law Handbook, Planning and Land Use in NSW. NSW, Australia: Redfern Legal Centre Publishing.Google Scholar
James, D. & Gillespie, R.(2002). Guideline for Economic Effects and Evaluation in EIA, prepared for Planning NSW.Google Scholar
Freeman, A. Myrick III (2003). Economic Valuation: What and Why. In Champ, P., Boyle, K. & Brown, T. (Eds.), A Primer on Nonmarket Valuation. London: Kluwer Academic.Google Scholar
Garrod, G. & Willis, K. (1999). Economic Valuation of the Environment: Methods and Case Studies. Cheltenham, UK: Edward Elgar.Google Scholar
Garrod, G. & Willis, K. (2000). Economic Approaches to Valuing the Environmental Costs and Benefits of Mineral and Aggregate Extraction. Minerals and Energy, 15, 12–20.CrossRefGoogle Scholar
Gillespie, R. & Bennett, J. (2012). Valuing the Environmental, Cultural and Social Impacts of Open Cut Coal Mining in the Hunter Valley of NSW, Australia. Journal of Environmental Economics and Policy, 1(3), 1–13.Google Scholar
Gillespie, R. & Kragt, M. (2012). Accounting for nonmarket impacts in a benefit-cost analysis of underground coal mining in New South Wales, Australia. Journal of Benefit Cost Analysis, 3(2), article 4.Google Scholar
Gillespie Economics (2007). Economic Assessment of the Metropolitan Coal Project, prepared for Resource Strategies Pty Ltd.Google Scholar
Gillespie Economics (2008). Managing the Impacts of a Mine in the Southern Coalfield: A Survey of Community Attitudes, prepared for Helensburgh Coal Pty Ltd.Google Scholar
Gillespie Economics (2009a). Bulli Seam Operations Socio-Economic Assessment,prepared for Illawarra Holdings Pty Ltd.Google Scholar
Gillespie Economics (2009b). Proposed Warkworth Extension Benefit Cost Analysis,prepared for Warkworth Mining Limited.Google Scholar
Harrison, A. J. (1977). Economics and Land Use Planning. Bristol, UK: Arrowsmith.Google Scholar
Helensburgh Coal Pty Ltd (2009). Metropolitan Coal Project, Response to Planning Assessment Commission Queries, HCPL, Wollongong.Google Scholar
International Association for Impact Assessment (1999). Principle of Environmental Impact Assessment Best Practice, Institute of Environmental Assessment, Lincoln, UK.Google Scholar
Loomis, J. (1987). Economic Efficiency Analysis, Bureaucrats, and Budgets: A Test of Hypothesis. Western Journal of Agricultural Economics, 12(1), 27–34.Google Scholar
Loomis, J. & Helfand, G. (2001). Environmental Policy Analysis for Decision-Making. Dordrecht: Kluwer.Google Scholar
MacDonald, D. H., Morrison, M. & Barnes, M. (2010). Willingness to Accept Compensation and Willingness to Pay for Changes in Urban Water Customer Services Standards. Water Resources Management, 24(12), 3145–3158.Google Scholar
Mitchell, R. & Carson, R. (1989). Using Surveys to Value Public Goods: The Contingent Valuation Method. Washington, DC: Resources for the Future.Google Scholar
Morrison, M. (2000). Aggregation Biases in Stated Preference Studies. Australian Economic Papers, 39, 215–230.Google Scholar
Morrison, M. & Bennett, J. (2004). Valuing New South Wales Rivers for Use in Benefit Transfer? Australian Journal of Agricultural and Resource Economics, 48(4), 591–612.Google Scholar
NSW Department of Planning and Infrastructure (2011a). State significant assessment system: an overview. Retrieved from http://www.planning.nsw.gov.au/Portals/0/Development/Overview%20Fact%20Sheet.pdf.Google Scholar
NSW Department of Planning and Infrastructure (2011b). Major Project Assessment: Warkworth Extension Project (09_0202): Director-General’s Environmental Assessment Report Section 75I of the Environmental Planning and Assessment Act 1979, NSW Department of Planning, Sydney.Google Scholar
NSW Department of Planning and Infrastructure (2013a). Explanation of the intended effect of the proposed State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) Amendment (Resource Significance) 2013. Retrieved fromhttp://www.planning.nsw.gov.au/Portals/0/PlanningYourRegion/Statement%20of%20Intended%20Effect%20-%20Ports%20SEPP.pdf.Google Scholar
NSW Department of Planning and Infrastructure (2013b). State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) Amendment (Resource Significance) 2013. Retrieved from http://planspolicies.planning.nsw.gov.au/index.pl?action=view_job&job_id=6065.Google Scholar
NSW Department of Planning and Infrastructure (2013c). Planning Changes for theResources Industry, Frequently Asked Questions. Retrieved from https://majorprojects.affinitylive.com/public/e383b8b6bda16c3b9e1269b4badcabf2/Frequently%20Asked%20Questions.pdf.Google Scholar
NSW Department of Planning and Infrastructure (2014). Guide to Commission determinations where a review (and public hearing, if requested) has been held. Retrieved fromhttp://www.planning.nsw.gov.au/Portals/0/Development/1-PAC_process.pdf.Google Scholar
NSW Government (2008). Impacts of underground coal mining on natural features in the Southern Coalfield: strategic review, State of New South Wales through the NSW Department of Planning, 2008.Google Scholar
NSW Government (2012). Guideline for the use of Cost Benefit Analysis in mining and coal seam gas proposals, NSW Government, Sydney.Google Scholar
NSW Planning Assessment Commission (2009). The Metropolitan Coal Project Review Report, NSW Planning Assessment Commission, Sydney.Google Scholar
NSW Planning Assessment Commission (2010). The PAC Review of the Bulli Seam Operations Project, NSW Planning Assessment Commission, Sydney.Google Scholar
NSW Trade and Investment (2011). 2010 New South Wales Coal Industry Profile, NSW Government, Sydney.Google Scholar
NSW Treasury (2001). NSW Government Guideline for Economic Appraisal, NSW Treasury, Sydney.Google Scholar
Portney, P. (1994). The Contingent Valuation Debate: Why Economists Should Care. Journal of Economic Perspectives, 8(4), 3–18.Google Scholar
Quiggin, J.(2012). Affidavit of Professor John Quiggin 29 June 2012, Bulga Milbrodale Progress Associated Inc. v Minster for Planning and Infrastructure and Warkworth Mining Limited (2013) NSW LEC 48.Google Scholar
Resource Strategies Pty Ltd and Helensburgh Coal Pty Ltd (2010). Metropolitan Coal Project Environmental Assessment, HCPL, Wollongong.Google Scholar
Resource Strategies Pty Ltd and Illawarra Coal Holdings Pty Ltd (2011). Bulli Seam Operations Environmental Assessment, Illawarra Coal Holdings Pty Ltd, Wollongong.Google Scholar
Rolfe, J. & Bennett, J. (1996). A Comment on Blamey, Common and Quiggan’s Citizen Value Hypothesis. Australian Journal of Agricultural Economics, 40(2), 129–134.CrossRefGoogle Scholar
Rolfe, J. & Windle, J. (2012). Distance Decay Functions for Iconic Assets: Assessing National Values to Protect the Health of the Great Barrier Reef in Australia. Environmental and Resource Economics, 53, 347–365.Google Scholar
Sinden, J. & Thampapillai, D. (1995). Introduction to Benefit-Cost Analysis. Australia: Longman.Google Scholar
Streeting, M. & Hamilton, C.(1991). Economic analysis of the forests of south-eastern Australia, prepared for the Resource Assessment Commission.Google Scholar
UTS Institute of Sustainable Futures (2012). Independent review of the Coalpac environmental Assessment, University of Technology, Sydney.Google Scholar
van Bueren, M. & Bennett, J.(2000). Estimating Community Values for Land and Water Degradation Impacts, draft report prepared for the National Land and Water Resources Audit Project.Google Scholar