The right-wing in NZ should refrain from twisting facts when it comes to patronizing lines explaining to voters how economics works. Especially when it comes to putting down iwi like Ngāi Tahu, labelling them as engaging in dirty play, like "green mail" & "rent- seeking". Specifically, National Party pollster David Farrar says:
Meridian Energy is not revealing the amount it paid Ngāi Tahu as it seeks to renew resource consents for its Waitaki Hydro Power Scheme [in the South Island] .. This is what some call Greenmail. Renewing consents for a critical energy supply should be easy .. But the RMA isn’t .. you have to buy off potential objectors .. Iwi have the power to do major financial damage to a company like Meredian. [Iwi] can use objections .. to extract environmental and financial concessions. The incentive is not new and economists call it ‘rent seeking’.
My impression from looking at this deal is that it is not "rent seeking", nor "green mail". Quite the opposite. Nobel Laureate Ronald Coase wrote one of the most famous papers in economics many years ago called, "The Problem of Social Choice". He argued that the problem of externalities (for example where one party causes environmental damage that hurts another party without bearing the cost) can be solved by a private bargain. Let's say your neighbor lights a fire to burn rubbish that causes smoke to come over your place. If the amount it hurts you can be quantified as $100, you can offer your neighbor $80 to not light the fire & take the rubbish to the tip instead. If the cost of going to the tip for the neighbor is $50, then they profit by $30 from this deal. Meanwhile you make $20 due to there being no more smoke coming onto your place. Its an efficient, welfare enhancing bargain. So why shouldn't Meridien Energy pay Ngāi Tahu (as well as Central South Island Fish & Game, with whom Meridien also struck a bargain) for the externalities that it is imposing on these parties? For National's Pollster to argue that, "The fast-track approach is at best a short-term fix. It helps big business like Meridian .." is revealing. Does National really want to be the party of "big business"? Does it really want to stand against efficient Coasian bargains? Making such bargains easier and quicker to strike is the solution, not stopping them.
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