12 September, 2019
Industries
Client
Department of Premier and Cabinet WA
Over the next 30 years, around 18,000 hectares of native vegetation is expected to be cleared in metropolitan Perth to accommodate the state’s growing population. In order to improve the level of protection afforded to the environment, while ensuring economic development can proceed, the WA State Government has commenced work on preparing a Strategic Assessment for the Perth-Peel Region (SAPPR). Synergies was engaged to assist with evaluating the costs and benefits of the proposed Strategic Assessment, and to examine options for funding the new system of assessment and approvals.
Over the next 30 years, around 18,000 hectares of native vegetation is expected to be cleared in metropolitan Perth to accommodate the state’s growing population. This will place increasing pressure on the current environmental approvals system, and is expected to give rise to increasing costs to land developers as clearing offsets become more expensive to acquire.
Under existing environmental approvals processes, development projects can be subject to both State and Commonwealth environmental assessment, which significantly increases the cost of both development and environmental protection. Project assessments are also undertaken on a project-by-project basis, making it challenging to manage the cumulative environmental impacts of development across a region over time.
In order to address this, the Australian Government and the WA Government have formally agreed to undertake a strategic assessment of the Perth and Peel regions. Strategic assessments are a statutory provision under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) and enable a ‘big picture’ approach to environmental protection.
The purpose of the Strategic Assessment is to streamline environmental assessment and approvals processes, and to holistically manage environmental impacts through a strategic approach to avoidance, mitigation and conservation actions.
In contrast to the existing project-by-project assessment process, the Strategic Assessment framework will enable a coordinated, landscape-scale approach to commitments relating to State environmental factors and Commonwealth matters of national environmental significance. It will also enable compliant developments to be approved entirely at the State level, removing the need to refer proposals to the Commonwealth.
As with all major policy reforms, the benefits of adopting a new system need to be evaluated against the costs. Synergies was engaged by the Department of Premier and Cabinet to undertake a comprehensive cost benefit analysis (CBA), including an investigation of the distribution of costs and benefits across different stakeholders.
The CBA commenced with cataloguing of the types of costs and benefits that may accrue over time as a result of SAPPR.
We found that the new system is expected to deliver considerable cost efficiencies for Government, reduced environmental approval times, and greater certainty and predictability for developers and other land users with regard to environmental mitigation and offsets. The new system is also expected to produce greater conservation security and better environmental outcomes.
Against these benefits are a suite of implementation costs, including up-front government acquisition of native bush land for inclusion in the conservation estate and land rehabilitation works.
Synergies consulted with relevant government agencies, developers, and environmental consultants to estimate the quantum of these costs and benefits. All impacts were evaluated relative to a ‘base case’ in which land continues to be cleared, with development projects requiring approval under the current system of State and Commonwealth approvals.
Costs and benefits under a range of scenarios were calculated and converted to net present values using a social discount rate.
The CBA demonstrated that while the SAPPR will involve considerable costs to implement, the costs to government and developers of managing environmental approvals under current arrangements will be even greater, even after allowing for the effect of discounting to account for the fact that some of the benefits will take time to be realised.
SAPPR has the potential to deliver substantial economic benefits out to 2050, mostly in the form of reduced offset costs and faster approval times for developers. Environmental benefits were identified in our analysis, but not quantified in monetary terms.
While the economic case for SAPPR is sound, the WA State Government is presently undertaking further investigation into a number of implementation issues.