Benefit cost analysis, resilience and climate change

Abstract

Applying a resilience theory framework, land transport funding in New Zealand is used to show how benefit cost analysis can reinforce a preference for maintaining existing economic and social systems when, instead, consideration of more socially disruptive options may be required. In this context, resilience is seen as the ability to maintain transport systems rather than the ability to reduce the probability of climate change. The latter role of resilience attempts to identify thresholds and regime shifts, and so critiques decision-making processes, while the former privileges social stability, thereby reducing the range of potentially useful emission mitigation options to be considered.

Policy relevance

Transitioning to a lower-carbon future requires policy formulation that challenges business-as-usual assumptions. Benefit cost analysis can be applied in ways that create barriers to such transitioning. The New Zealand case study identifies the conditions under which this can be the case. That benefit cost analysis could undermine the potential of resilience theory and application to identify low-carbon emission pathways is of concern to policy makers globally.

Keywords:

• barriers
• emissions
• New Zealand
• transport

Acknowledgements

Thank you to Prue Taylor, in particular, as well as Tricia Austin, Megan Howell, and Julie Harker, for advice and editorial comments.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. For a review of how BCA is applied to support climate change decision making and adaptation planning see the special issue of the Journal of Benefit Cost Analysis, 5(3) (2014).

2. Increasing the current per tonne price of atmospheric carbon 25- to 100-fold would reduce emissions from the transport sector by about 1% over a couple of decades (MotT, 2011). See also MfE (2011, 2014, 2015) for further analysis.

3. See http://www.mfe.govt.nz/climate-change/reducing-greenhouse-gas-emissions/emissions-reduction-targets (accessed February 2015).

4. SAHA International Ltd advises governments on strategic investments in transport, water, waste water, and energy.

5. Between 2012 and 2014, the New Zealand Unit fluctuated from below $1 to $4.30.

6. See http://www.nzta.govt.nz/planning/monitoring/audits/pir.html with an informal summary provided at http://transportblog.co.nz/2013/06/04/nzta-post-implementation-reviews/ (both accessed February 2015).

7. The 2010 United Nations Cancun Agreements included recognition of a need to reduce emissions to the extent required to keep global average temperature rise below 2 °C.

8. The New Zealand Government has indicated it will review the NZETS in 2015.

Additional information

Funding

This work was supported by the University of Auckland School of Architecture and Planning Faculty Research Development Fund under project no. 3701843.