Document Sample

Professor James Barrie Kirkpatrick AM PhD Dsc
School of Geography and Environmental Studies, University of Tasmania


General inadequacies of the net benefit assessment approach

It does not tell us whether a development is ecologically sustainable

Ecologically sustainable development, the conceptual underpinning of the planning
process in Tasmania and Australia, is not a process of optimisation of economic,
environmental and social values within the short term, but rather promotes economic
development that does not irreversibly compromise biodiversity or landscape production
for future generations, and does this within a precautionary framework, in which some
benefit of doubt is given to the non-economic values. The use of the net benefit
assessment approach can result in a positive outcome for development, even if that
development irreversibly reduces environmental options for future generations, as is
documented in the present case. The acceptance of the assertion that the benefit:cost
analysis outcome should be the primary basis for decision-making (p. 6) would be
inconsistent with the basic principles of the State legislation in relation to planning.

The use of net present value with high discount rates in the process of net benefit
assessment exacerbates the problem outlined above, as the assumed benefits are largely
within the next few years, while the assumed costs are frequently costs in perpetuity.

It is based on a large number of arguable assumptions

The outcome of net benefit assessment can be strongly affected by the assumptions that
are made in relation to most of its components. The discount rate applied to assumed
benefits and assumed costs is a primary influence on the outcome. Discount rates of four
and a half percent, seven percent and nine percent are used in the Lauderdale Quay
calculations of net present value, with their benefit:cost ratios declining as the discount
rate declines. Yet, western societies appear to be heading to, or have arrived, at interest
rates of less than one percent, and, if we are serious about ecologically sustainable
development, we would use discount rates that allowed the lives of our great
grandchildren to matter.

A long chain of assumptions underlies the net present value calculations which flow from
economic models of the value of the economic activity that would be generated by the
development and the value of the natural resources that would be destroyed or modified
by it. The assumptions that underlie such models need to be tested by varying each of
them to encompass the full range of opinion on each, and calculating the outcomes from
the combinations of these variations. The scenerios that vary some outcomes of the
assumption sets by 25% are inadequate to assess the sensitivity of the outcomes to
variation in opinions. The contractors to the proponent are unlikely to share the opinions
of all others with knowledge of the particular fields that relate to each of the assumptions
within a range of a 25% effect on outcomes, and the variation in combinations of
assumptions may result in synergistic effects on outcomes. In past similar cases, the
predictions and reality of employment and other economic benefits have changed
dramatically during the course of appeal processes and afterwards. This has usually been
in a downwards direction.

Qualitative net benefit assessment is even more strongly based on arguable assumptions
than quantitative net benefit assessment. One highly influential set of assumptions is
expressed in the itemisation of the costs and benefits. The coalescence, subdivision
inclusion or omission of items can dramatically change the outcomes. Again, the full
range of opinion needs to be incorporated to test the impact of variation in classifications
on the outcome.

A second related major arguable assumption in the qualitative analysis is that each item
that is assessed is of equal importance. Hypothetically, there could be only one very high
negative outcome from the matrix, which would result in the death of all sentient beings
on our planet in 25 years time. Yet, it would be outweighed by the many short term
benefits resulting in the previous years.

Many of the qualitative assessments of costs and benefits are subjectively based and/or
highly arguable

I give some examples of such cases (this is by no means exhaustive):
1. Cost to government for provision of infrastracture
Given that the construction of a canal estate requires much more remodelling of the
landscape than a normal subdivision, the extra heavy traffic generated is likely to be
considerable. At present, the real costs of heavy vehicles on roads are not recovered. It is
difficult to see how a verdict of 'very low' is appropriate.
2. Impacts on the quality, amenity and natural character of the area
The incorrect statement is made that there is limited access to the foreshore at present.
Here, in contrast to the approach in the quantitative cost-benefit analysis, the paper
downplays the admitted large effects on 'some' of the visual disruption during the long
construction phase, to focus on a putative sense of place that is assumed will be created
by the design parameters, once construction is complete. It would be easy enough to find
out what proportion of Tasmanians would be offended by a canal estate in the near or
remote view, or even by the knowledge of its existence. It is certain to be more than
'some'. A natural scene consists of more than pristine vegetation, which, in any case is
pristine enough to support threatened species in the area proposed to be destroyed.
Aesthetic values and sense of place consist of more than viewfields. There is no doubt
that a natural scene, valued by a large number of people will be destroyed if the
development occurs. The ultimate judgement of a medium impact during construction
and a low impact afterwards should be considered a gross underestimate.
  This item should be disaggregated, as active recreational amenity, passive recreational
amenity and sense of place different phenomena, would be affected differently by the
proposed development.
3. Impacts on community cohesion and identity
Given that the proposal has clearly, in itself, reduced community cohesion, and given that
the ambience of a canal estate is very different to that of a beach shack area, the verdict
of 'very low' seems inappropriately low.
4. Loss of recreational access
During the construction phase this will be enormous, and more than in the later phase, but
the construction phase is marked 'N/A' 'to avoid double counting'. The bird watchers at
Lauderdale are most interested in the birds of the mud flats. A large proportion of the
wader bird habitat at Lauderdale will be destroyed. The verdict of 'medium' seems
inappropriately low.
5. Impacts on amenity associated with noise and vibration
This is given a low rating because its affects will only be felt by 'a small number of
households'. Using this logic it would be reasonable to let off a nuclear bomb in
Melbourne, because, considering the world as a whole, only a small number of
households would be affected. Canal estates are there so people can use their noisy power
boats, which are now rare in the area in the absence of deep enough water. This seems to
have been ignored in assessment under this heading.
6. Increased susceptibility to climatic change
One would have expected an analysis of carbon and methane budgets compared to a
terrestrial development under this heading. The assumed sea level rises are now
appearing to be far too low.
7. Impacts on sediment quality
A precautionary approach would assume that spotted handfish are present, or potentially
present in the future, in all suitable habitat. The verdict of 'very low' seems very low in
this context.
8. Reduction of the primary production potential
Here the whole of the Derwent is used to make the impact seem less significant.
9. Reduction of water bird habitat.
The logic in this section is flawed. It assumes that there is no interaction between the
availability of food and the factors that are keeping the pied oyster catcher populations
below the numbers that can be putatively supported by food availability. It would be
precautionary to assume that the carrying capacity of the area is influenced by other
factors than food availability, and that, therefore, a loss of a large area of habitat would
impact on the population.
10. Reduction of habitat for marine species of concern
A precautionary approach would use percentage of suitable habitat (not of Ralphs Bay as
a whole) and would consider habitat rather than observations in judging the significance,
which seems too low.
11. Loss of terrestrial ecosystems
A threatened invertebrate species is only known in the area from a place planned to be
destroyed. It is not good enough to assume that it occurs elsewhere in the area. Another
related threatened species with a locality that would be destrtoyed is more widespread.
Most threatened species cannot afford to lose any viable populations. This impact is
highly significant, not negligible.
12. The benefit of building a critical mass in the marine sector
This argument assumes: a) that the demand for marinas will continue to develop in face
of peak oil, a carbon economy and global recession; b) that this demand would not be
provided for elsewhere in Tasmania. The argument is thus inconsistent with the methods
used in the economic analysis, and deserves a much lower rating.
13. The benefit of increased tourist activity
There is an argument that, as one of a series of developments out of sympathy with
Tasmania's attractors for tourists, the development will contribute to a loss of tourist
activity in Tasmania.
14. Benefit of increased business, investor and consumer confidence
This development seems to be as strongly disliked by a substantial number of
Tasmanians as the logging of old growth forests or pulp mills in foggy valleys. This is a
recipe for social division and discord and continuing uncertainty, which seems likely to
have the reverse effect on confidence as is argued herein.
15. Appreciation of property values
A depreciation could be expected for the many properties that will lose visual and aural
amenity, especially during the long construction phase, which is marked 'N/A'.


The report points out that salt marsh will be destroyed by the development, while also
stating that saltmarsh 'in good condition' should be protected from destruction. The marsh
to be destroyed is mapped as not 'in good condition', while parts of it are identical to
areas mapped as 'good condition' elsewhere in the study area. Salt marshes are currently
suffering from rising sea levels, and development at their landward margins. Any loss is
significant for their conservation, 'good condition' or not.

This report on the terrestrial vegetation has the following errors:

1. p. 11 and vegetation map - Saline aquatic herbland is said to only occur in one ditch,
yet is mapped in an extensive area in which the vegetation is actually salt marsh.
2. p. 16 - It is Atriplex paludosa, not Rhagodia candolleana that is intermixed with
Atriplex cinerea in the coastal vegetation that is proposed to be destroyed.
3. p. 33 - Sclerostegia arbuscula has been steadily increasing in cover on Racecourse
Flats after stock were removed. It does not require the opening of the area to tides to
ensure its recovery.
4. The condition map shows areas of identical vegetation in different condition classes.
The attribution of poor condition to the saltmarsh vegetation that is proposed to be
destroyed by the development is questionable when areas that are identical and other
areas that are weed-infested are mapped as being in good condition.

Shared By: