2.4 External impacts

Introduction

External impacts are benefits or disbenefits stemming from a project that do not reside with the responsible government agencies, approved organisations or transport users. Because cost benefit analysis takes the national viewpoint, external impacts must also be considered.

Environmental impacts

Environmental impacts are an important subset of external impacts.

The New Zealand Transport Strategy, Land Transport Management Act and Resource Management Act impose a duty when preparing projects to assess the effect of the project on the environment and environmental sustainability. The emphasis is to 'avoid to the extent reasonable in the circumstances, adverse effects on the environment¹ ' by:

• reducing the negative impacts of the transport system on land, air, water, communities and ecosystems
• ensuring the transport system will make more efficient use of its resources, reduce its use of non-renewable resources, and shift over time from non-renewable to renewable resources ².

¹ Land Transport Management Act, section 68(2)(a)

² New Zealand Transport Strategy pg 43

Quantifying and valuing external impacts

Most of the potential external impacts are discussed in appendix A8, which contains techniques for quantifying and, in some cases, valuing the impact. Benefits from sealing roads are addressed in simplified procedure SP4.

Where impacts are valued, they should be included as benefits or disbenefits in the economic efficiency evaluation. Non-monetised impacts should be quantified, where possible, and reported as part of the funding allocation process.

Mitigation of external impacts

Where a design feature to avoid, remedy or mitigate adverse external impacts is included in a project and the feature significantly increases the project cost, it shall be treated in the following way. If the feature is:

1. required by the consenting authority in order to conform with the Resource Management Act or other legislation, then the cost of the feature shall be treated as an integral part of the project cost;
2. not required by the consenting authority in order to conform with the Resource Management Act or other legislation, then the feature shall be described and evaluated in terms of benefits and costs, and the results reported in worksheet A8.2.

The costs of the preferred mitigation measure shall be included in the project cost.

Transferred external impacts

External impacts are not included in the economic evaluation when these merely represent a transfer of impact from one person to another, eg, a change of traffic flow may benefit one service station at the expense of another. Although this may be a significant impact locally, from a national economic viewpoint the two impacts are likely to cancel each other out.

Also refer to Equity impacts in section 2.3.