Part 5: Priority Infrastructure Issues for Sustainable Development
Previous sections of this report have raised a range of sectoral infrastructure policy issues relevant to sustainable development, and the question arises of how to set priorities in allocating resources among them. We suggest here some criteria against which the issues identified can be assessed. This brief discussion aims to provide a framework which can be regularly used to identify outstanding issues or major questions about the direction of infrastructure investment in the next decade or so.
Following discussion of these criteria, we examine briefly what might be the highest priority issues, based on these criteria. This acts as a distillation of the issues raised in previous sections of this report.
The following criteria are suggested:
- Does the issue involve a major potential impediment to advancing economic, social, cultural or environmental objectives? Consideration here should include:
- whether infrastructure underprovision, or poor quality infrastructure, might lower the productive capacity of the economy, for example due to service disruptions; might limit social or cultural development, for example due to inadequate ICT connectedness; or might limit environmental enhancement or cause adverse environmental impacts;
- whether infrastructure overprovision is a risk, particularly where there is evidence that external costs are significant and not fully internalised. Lack of internalisation of externalities in prices creates a risk of ongoing misallocation of resources. For example, overprovision may cause a distortion in provision between one sort of infrastructure and another (e.g. between road and rail), or can be manifested in overinvestment in back-up infrastructure, rather than demand management arrangements.
- Is the issue an area of interaction (e.g. between sectors) which may mean, perhaps for institutional reasons, that problems or opportunities have been neglected (some significant cross-sectoral issues were explored in Part 4 above)?
- Does the issue stand out as presenting a problem in terms of any of the principles for sustainable development set out by the Government in its Programme of Action (section 1.3 above). For example, is the issue one which is identified internationally as having global implications for sustainability (e.g. does it have climate change implications)? Or does the issue involve very long-term considerations - to which New Zealand does not have a particularly good track record of according sufficient attention?
We cannot reach definitive conclusions on priority issues at this stage, because:
- The infrastructure stocktake's audit of the state of infrastructure in New Zealand in the four sectors under consideration is not yet available, so the current information base is poor in some areas.
- More importantly, a sound judgment requires a wider issue and policy analysis and consultation process - beyond the resources of the present exercise. Because of the fragmentation of knowledge on these multi-faceted questions, initial analyses should be tested against the views of experts from a range of central and local government agencies, infrastructure providers, and members of the public, including non-governmental organisations (NGOs).
Nevertheless, we offer the following provisional suggestions as priority issues:
- Auckland transport infrastructure issues, particularly the level and nature of access-facilitating infrastructure investment, represent a high priority. Poor transport infrastructure imposes a significant present cost and future risk, not only in terms of economic cost to the business sector and the general public, but also a much wider social and environmental cost.305 Effects also go wider than Auckland.306 At present, there appears to be a risk of infrastructure decisions which may lock Auckland's urban form into a long-term path which is not optimal when a range of wider sustainability considerations are taken into account.
There is a major risk of misdiagnosing the problem as simply under-provision of roading infrastructure. Given the social (including health) and environmental implications of continued growth in private vehicle numbers, full consideration of a range of alternatives to roading, and careful consideration of policy mechanisms such as road network pricing and travel demand management, together with institutional changes, appear necessary. Because this area involves a number of sectoral interaction issues (particularly concerning energy and transport, but also interactions such as health and environment) the issues are complex and so far, relatively under-explored. For this reason too, they warrant a major policy investment. - Investment in electricity infrastructure is at a stage where risks of a supply-demand mismatch and attendant supply insecurity appear likely to increase over the next decade, and, conversely, major opportunities can be taken to find more innovative solutions to security and decarbonisation issues. Sustainable solutions are likely to involve, at a high level, developing lower- carbon electricity sources, decentralising electricity generation, supporting demand-side participation and fostering innovation in new energy systems. Initiatives seem likely to centre on forms of distributed generation such as combined heat and power, bioenergy and windpower. The alternative, essentially, is to continue with major fossil fuel or hydro developments with damaging environmental (and sometimes social) effects.
Market-based policy mechanisms to internalise costs into prices, and signal the full costs of energy developments, are desirable. Even if potential environmental and social impacts are not fully internalised into resource prices, these impacts should be given greater attention. Spin-offs of bioenergy development could also improve transport sector fuel options - including, importantly, decarbonising vehicle fuels - and warrant further investigation and investment. - Reshaping the management of the urban water cycle is a lower priority but again, opportunities will present themselves over the next decade for reconfiguring infrastructure in a more integrated way. The potential for smaller scale systems with lower cost and environmental impact should be fully explored. Elements such as temporarily stored stormwater, grey water re-use, recycled wastewater from local (e.g. suburban level) treatment units, and rainwater harvesting all have potential, and there is scope for significantly cutting investment in buried pipelines. It is important that the potential in this area be further explored in time to facilitate improved choice by cities and towns making major re-investments to upgrade or replace ageing water and stormwater systems across New Zealand.
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