Environment and Resource Efficiency Plans - Assignment Example

Report to EREP Program Name Institution Report to EREP Program In 2005, the government released an environment sustainability framework aiming at creating a sustainable Victorian state within the generation. Dealing with climate change, improving material efficiency, increasing energy and water were the key objectives of the environmental framework, which introduced the need for conserving the environment together with the necessary plans in the industry. Having amended the Environment Protection Act 1970 in 2006, the industry facilitated the introduction of the Environment and Resource Efficiency Plans (EREP). The EREP program aims at creating partnerships with businesses in order to reduce water and energy consumptions as well as emission of greenhouse gases, costs and creation of wastes. Run by Environment Protection Authority (EPA) and built under the EPA Greenhouse Program, the EREP finally commenced in 2008. The program required the largest commercial and industries in Victoria to register with EPA and evaluate their consumption patterns while creating plans, reports and implementation against their utilization. However, in February 2013, the EPA commenced to prepare itself towards the closure of EREP program as advised by the Victorian government. The early sunset was to prepare the government for the official closure of EREP regulations predicted to be on December 31 2014. Following a review by the Victorian government, it decided to cease the program due to the compliance burden it placed on businesses in January 2013. Review of Recent Trends in Regulatory Strategies On numerous occasions, the Environment Protection regulates its protection strategies due to the emerging environmental concerns. These regulations not only focus on preventing pollution but also aim at conserving the environment and promoting its sustainability. The regulations currently display a tenfold increase since its endorsement. Governance of environmental resources in Victoria is a complex process. However, the Sustainability and Environment department together with the government works towards governing and regulating environmental related issues. Currently, it has come up with various regulations with which the trends form basis of discussions. Approved in 2009, the EREP consolidated the water futures strategy that involved policies relating to water and its usage (Australia, & Nature Conservation Council of N.S.W., 2008). Businesses that use more than 10 milliliters of water per site had to prepare a Water Management Action Plan (WaterMAP) yearly. The regulation helps in saving approximately 10% of the total amount of water used annually. This regulation aims at assessing industrial use of water while advocating ways through which it can reduce its produce. Businesses, which exceed their water usage in their daily activities, tend to exploit natural resources in search for water resources. Therefore, this regulation helps preserve the environment and conserve its natural resources According to the EPA’s Environment and Resource Efficiency Plans in 2007, defines the requirements and the criteria with which the EREP prescribes an individual to register as well as the considerations made for one to apply the report. It also distinguishes between situations where exceptions are made, the details concerning collection, submission and timing of the reports. This relates to the time allocated to individual companies about their reports on their activities. Analysis of the reports enables the EPA identify ways through which the company’s pollute the environment and propose specific ways through which it can deal with the problem. Henceforth, this makes conserving the environment much easier together with the natural resources (Allen Consulting Group & Victoria, 2008). Additionally, the EPA generated a rule involving the residential noise. Under the Environment Protection Regulations 2008, the rule provides information regarding household tools and objects as well as the times when noise resulting from their usage is regarded as unreasonable noise together with the exceptions of different situations. The exceptions made depend on the nature of noise. Additionally, it depended on whether the involved individual has the permission to produce the noise at a specific time. This help in reducing noise in the environment while facilitating development. In an effort to conserve the environment, the ERP regulated a law concerning conservation of these environment and its resources. This was through issuance of a list entailing scheduled premises together with the exceptions of each selection. It also presented a list of premises, which had to pay for their presence in a particular location. This ensured the protection of conserving the natural resources located in areas next to premises. Finally, ERP enacted the Ships Ballast policy in 2006. This offered administrative guidance including the services and requirements that conserve the waters of the Victorian state. The law also included the additional fees on ships that wished to sail on the Victorian waters or harbor. The restrictions placed in this law ensured that ships visiting the region had the best services and good working conditions to reduce pollution. The regulation also limits the number of ship that can visit Victorian waters due to the imposed levy. Focusing on these regulations displays a significant trend. As the years progress, there are different and new emerging issues increasing daily. These issues require specific policies that discourage their effects. For instance, global warming forms a major global concern. Thus, environmental related agencies tend to revise their policies and try to accommodate the changes in the environment (Allen Consulting Group & Victoria, 2008). This shapes the structure of the regulations enforced by the ERP board. Moreover, most of these policies tend to involve the commonly untouched issues in the past. The policies focus on the activities of human beings and the ways through which they affect the environment. The regulations also develop from other already existing schemes. Focusing on the trend, these initiatives aim at conserving the environment while applying direct action upon the different factors affecting the environment in a negative manner. Overview of EREP Scheme and Its Outcomes Following the amendments of the Water Act 1989, EREP set guidelines that require developing their water efficiency by employing the water management action plan (WateerMAP). The policy requires all businesses to submit their reports to the relevant water cooperation in their localities. According to the WaterMAP policy, businesses whose portable water consumption exceeds 10ML annually have to develop a management action plan. Targeted businesses have to register with the WaterMAP and forward their intentions to prepare a management plan. This initiative aims at conserving water and monitoring its use. Additionally, the requirements of the WaterMAP facilitate the intentions of EREP (Cullen, VanderWolk, & Xu, 2011). Affected non-resident users have to assess their daily water usage and recognize inefficiencies and ways through which it can facilitate water saving. Having identified these opportunities, they have to prepare plan involving employing water preservation activities and report their annual executed actions to the program. Organizations whose water usage does not exceed the limit can also voluntarily prepare a WaterMAP. With the increase of water prices by 9.5% annually together with the Consumer Price Index (CPI), the region experiences a decrease in the water resources since they tend to exploit more other water resources. Since the commencement of the strategy in 2008, companies, which employed the plan, experienced a decrease in their water usage. Therefore, the overall water usage reduced considerable and this means water resources are exploited less often than before. Commercial consumption of energy raises concerns in the EPA. EPA set out regulations involving energy consumptions of non-residential users whose major target were the large industries. Recent amendments made to the Environment Protection Act 2006 require these users to prepare an EREP. Administered by EPA Victoria, the program aims at conserving the environment. Users whose consumption exceeds the laid out limits have to ensure that they follow the required instructions. With the limit set out at annual consumptions not exceeding 100 terajoules, affected companies have to register, asses their consumption rates, identify their actions plan to reduce their usage and implement on the plan. They would then report their findings and recommendations to EPA (Cullen, VanderWolk, & Xu, 2011). Reducing the use of high consumptions of energy helps protect the environment. Large industries use huge amounts of energy in their produce. This causes pollution of the environment due to production of greenhouse gases into the environment following the combustion of fuels. Cases of global warming arise due to this increase and the population’s health is put at risk. Introduction and implementation of this scheme resulted in the decrease of the overall production of greenhouse gases by 1.1 million tonnes. Moreover, the energy bills of businesses in Victoria reduced by $34 million annually. This indicates reduced pollution of the environment and thus, conserving energy sources. Critical Analysis of the Early Closure the EREP Scheme In 2012, the Council of Australian Governments (COAG) complied with the reviewing of programs within the states and its territories. These programs included those that carbon price enticements and similarity with those of the federal government (Victoria, & Environment and Resource Efficiency Plans Program, 2008a). The Environment and Resource Efficiency Program was no exception having relation to carbon price. Following the review, the government ceased the EREP program claiming that it increased compliance burden on businesses. The early cessation from February 2013 raised many concerns involving the decision. According to the Victorian government policy concerned with cutting the red tape, the Victorian Regulatory Change Measurement (RCM) recommended the closure of the EREP programs claiming that it resulted in more burden than ease in businesses. The RCM methodology targets delayed costs, substantive compliance and reduced administrative costs on businesses as well as other costs incurred by organizations due to regulatory programs. The analysis exhibits the EREP program among that cause burdens upon their customers and the bet way of reducing these additional costs is by ceasing the policies. Nonetheless, there are distinct benefits of the program and ceasing of the company does not solve the problem. Regulatory Costs Administrative Costs Within the scope of RCM, regulatory costs exist in three different sectors. These are the compliance costs, financial costs and other costs including those imposed by competition. According to the RCM methodology, the processes involve in the implementation of EREP programs are cost related and burdening to the Australian industries. The key processes involved in the EREP programs involve utilization of additional costs (Victoria, & Environment and Resource Efficiency Plans Program, 2008b). As expected, no national program can run without incurring any costs. The first stage required by companies affected by the EREP program is to register their businesses. Administrative costs involve the compliance of the government to validate the running of the program in the country. It encompasses costs incurred during preparation and delivering of necessary documentation made by the government. The administration costs cover the other key processes including preparation, implementation and provision of progressive reports. Moreover, the administrative costs involve the both the cost and time needed to establish the profiles including water use including the business details, internal approvals and submission of reports. A close analysis of the administrative costs exposes the country to high taxation rates. The costs incurred are relatively high and overweigh the burden of additional costs upon businesses in Australia that may threaten its economy. Before concluding on the decision to stop the EREP program, thorough investigations by the government were made. In 2007, the government conducted a research concerning the impact of administrative costs and they were estimated as being part of Regulatory Impact Statement (RIS) way before commencement of the program. Following the government’s target of reducing red tape, it reviewed the program again after its commencement in 2008. Interviews with various affected businesses provide the base of the results indicating that the costs affected their dealings (Allen Consulting Group., Victoria, & Environment and Resource Efficiency Plans, 2007). The Victorian government used the Standard Cost Model (SCM) to estimate the average costs incurred for a normally efficient company through further consultations with energy and environmental experts. From the findings of the research, an estimated 22.1 percent of administrative costs per year faced the country’s economy. This translates directly to the labor costs with a slight difference in their percentages. Early cessation of the EREP scheme not only relied on information and facts from analysis of the RCM but also from the affected businesses. In this case, the RCM translated the administrative costs to labor costs. Compliance Costs According to definitions made by the RCM regarding compliance costs, it refers to the expenses incurred that directly results in the intended regulatory outcomes. They involve the production and capital costs of purchasing, maintaining of necessary equipment and training (Victoria, & Environment and Resource Efficiency Plans Program, 2008a). The need to inform third parties about the regulation involves incurring compliance costs as well as provision of subsidiaries by the government in forms of allowances or reimbursements results in deduction from the supplementary compliance expenses. In simpler terms, they are increased costs on top of the already existing expenses that would have otherwise been present in the absence of the ERP scheme. Introduction and implementation of the EREP scheme results in additional costs, which affect the economy of the country in a rather negative way. The actions and plans approved in the ERP programs are subject to assessment. Findings from a research of companies, which had applied the EREP programs into their businesses provides the basis for analysis for the importance of the scheme in relation to compliance costs. Following the early closure of the programs, there was a decrease in the tonal expenditure cost and an increase in government savings. Actions that had not commenced by the early closure date were more likely not to happen. However, the actions that had been implemented still had the opportunity to progress despite the sun setting of the programs. After the proposed early closure of the scheme, different companies pressed different reactions regarding the implementation of the program’s plans (Cullen, VanderWolk, & Xu, 2011). Several companies indicate that they would continue integrating the actions into their companies whereas other companies claim that they would stop. Approximately 65 percent of the actions would continue while about 35 percent of the remaining action s would stop. Reduction in the implementation and integration of these actions in businesses indicate a potential decrease in the substantial compliance expenses in the region. Thus, saving up potential cash needed for benefiting the region. Furthermore, the cessation saved costs totaling between $500,000 and $800, 000 (Smith, Hargroves, & Desha, 2010). . Determining the total amount of compliance costs within a region is difficult due to various reasons. However, estimations indicate that ceasing the running of the ERP programs reduces the amount of costs incurred in the scheme processes. The early closure of the program helps save more resources than waiting for the final overall of closure of the scheme in totality. According to its strategies, approximately $433,000 amount of cash represents the expenses of one particular action. Having in mind that the early closure occurred when new projects had not been implemented, the country experienced less costs. This is because between 2013, March and December 2014, the costs would have increased totaling to an approximate of $650, 000. The difference between the figures is great. Therefore, cessation of the ERP reduced the total compliance costs by approximately $2.0 million. Delayed Costs Delayed costs within the program also have a substantial impact on burdening businesses with compliance costs. They involve the loss of returns and expenses incurred through regulated entities either through approval or application delays. Generally, they relate to the regulated entities at the beginning of a new project and the information obligations. Application delays occur during the extended time in acquiring administrative requirements such as permits, certificates and licenses, which hinder the commencement of a project (“Regulation,” 2009). Approval delays include the time extended while waiting confirmation of administrative applications. These delays slow down the commencement and progression of the projects and impose additional costs due to change in production, consumption or resource patterns. Thee costs ay include labor downtime, standby costs and lost business prospects. Nonetheless, the EREP is not a preconditioning regulatory. It took enough time while planning and preparing its strategies before commencement. During the processes involved in acquiring necessary documentation, it does not interfere with the businesses activities. They can proceed with their normal functioning while awaiting the completion of the processing. Even if the process delays and fails to meet the proposed time, businesses could still wait without having to incur additional costs. This is because the program is more of a service that does not require early bookings or payments. Additionally, penalties resulting from delayed processes do not associate with compliance costs (“Department of Environment and Primary Issues,” 2013). This information also confirms with the analysis from data acquired from an affected business. Therefore, delaying of proposed dates did not affect the EREP actions and thus, did not result in the early closure of the program. Other Additional Costs Finally, other additional costs include those not mentioned in the other sections. They arise from the impacts of administration and regulation of the project. These costs exist over a wide range of reasons such as the impacts they have on innovation, market structure, negative externalities and resource allocation (Goldemberg & Lucon, 2010). Conversely, these costs had minimal effect on the businesses in Victoria. They are relatively similar to the costs incurred by businesses in a bid to implement or adopt new benefiting strategies. Thus, their impacts have minute influence on the substantial compliance expenses. These are the few expenses incurred during innovation. Moreover, the EREP involves strategies that involve less additional costs due to its non-compliance nature. The process of registering and developing of an EREP program requires relatively additional costs since the process is rather smooth. The program also lacks competition and thus, it cannot experience additional costs. Conclusion Introduction of the EREP program aimed at benefiting the Victorian region by helping deal and solve with resource scarcity issues. Focusing on water and energy consumptions as well as generation of wastes, production of greenhouse gases and the involved costs the program gained popularity and its benefits were increasingly many. After actualization and integration of the scheme, there were notable outcomes such as reduced energy and water use. Reduction of these resources means conserving the natural resources while reducing pollution of the environment. Nonetheless, the Victorian government recommended the closure of the EREP program. The EPA agreed and announced the early closure of the scheme. This was because it burdened businesses in Victoria with additional compliance costs. The cessation helped remove the obligations associated with implementing EREP regulations. The program may have been beneficial in the past couple of years but with the rising economic climate the ERP program only provides more regulatory burden than providing incentives. The Victorian government made the right choice of closing the program, thus, allowing managers to focus on profits to main businesses from their limited time. This would also help businesses in dealing with the elevated Australian dollar. References: Allen Consulting Group., & Victoria. (2008). Environment and resource efficiency plans regulations 2008 - recalculation of the SCM following program finalisation. Southbank, Vic.: EPA Victoria. Allen Consulting Group., Victoria., & Environment and Resource Efficiency Plans. (2007).Environment and Resource Efficiency Plans regulations 2007: Regulatory impact statement. Southbank, Vic.: EPA Victoria. Australia., & Nature Conservation Council of N.S.W. (2008). Inquiry into climate change and environmental impacts on coastal communities: Submission. Sydney, [N.S.W.: Nature Conservation Council of NSW. Cullen, R., VanderWolk, J., & Xu, Y. (2011). Green taxation in East Asia. Cheltenham, UK: Edward Elgar. Department of Environment and Primary Issues. (2013). Cessation of Environment and Resource Efficiency Plans(EREP) Program. Regulatory Impact Solutions. Goldemberg, J., & Lucon, O. (2010). Energy, environment and development. London: Earthscan. Regulation: EREP Doubles Energy Expectations. (December 01, 2009). Waste Management and Environment, 20, 11, 6. Smith, M. H., Hargroves, K., & Desha, C. (2010). Cents and sustainability: Securing our common future by decoupling economic growth from environmental pressures. London: Earthscan. Victoria., & Environment and Resource Efficiency Plans Program (Vic.). (2008). EREP toolkit. Southbank, Vic: EPA Victoria. Victoria., & Environment and Resource Efficiency Plans Program (Vic.). (2008). EREP guidelines: Environment & Resource Efficiency Plans. Southbank, Vic: EPA Victoria. Read More