I had the occasion last week to browse through the Proposed District Plan of a certain local authority in New Zealand in order to see how it assessed the costs and benefits to the community of its multitudinous restrictive provisions.

The Resource Management Act 1991 (RMA) requires local authorities to “take into account the benefits and costs of policies, rules, or other methods” it puts into such plans.

“That looks OK,” an economist might say. “The RMA is just telling local authorities to assess whether items in their plans can be expected to make the community better off in an overall sense.”

Such an economist is assuming too much. The RMA’s instruction does not say benefits and costs to members of the community are important. It is open to the interpretation that benefits and costs to something else – like ‘the environment’ – are more important.

It was hard to find anything in the plan I was examining that stated which approach was being taken.

Instead, the typical procedure seemed to be to classify a possible outcome as either a pro or a con, without any clear or consistent basis for doing so.

Eventually, buried deep in the first thousand pages of the plan, I came across this clue as to what the authors considered to be a benefit or a cost:

"Net benefits are the gains in environmental or other ecological properties, reduced natural resource demand, or increased resilience or security of supply, minus the environmental injuries caused by those actions."

Notice that there is no mention of the need to consider the cost to the community of forgoing the benefits it would derive from the forgone use of the land or property. This is a critical omission.

Instead, the RMA only recognises the cost of ‘environmental injuries.' But are introduced plants, for example, an environmental injury or benefit?

Now look at the benefits side of the statement. There is no reference to any benefits that the community might enjoy from the preferred option. Each of the enumerated environmental ‘gains’ might benefit the local community – or require a sacrifice by the community to achieve the gains.

How typical is this example? I don’t know. Perhaps some of you who have read this far could provide more examples, supportive or otherwise?