Economic prudence in the age of environmental tempests

Abstract

A new environment tax may be needed to respond to climate impacts and sea-level rise. This year, taxpayers will pay billions in responding to Cyclone Gabrielle. Past storm costs are also at the Treasury checkout, with Marlborough having its hand out for a second $80 million in two years. Government Minister Damien O’Connor was recently quoted as saying the Government “was hard-pressed trying to find funds to respond to Cyclone Gabrielle”. In determining the taxpayer’s share of regional recovery costs, the Government may need to examine the regional history of land management regulation, such as it has done in Gisborne. This is because of decades of regional mismanagement of highly erodible steeplands has worsened flood damage to communities, contributed to loss of life, and weakened local economies. Infrastructure repair and support for community restoration may therefore need to be, at least, partially-funded by regional environmental and climate recovery taxes.