Monday 25 November 2019

Making better trade offs


I'm trying to spend a bit of time thinking about the ‘ins’ and ‘outs’ of RMA decision making – how is it different from ‘normal’ decision making? Now that a fundamental reform of the RMA is on the cards, it is timely to think about these things.

In my last blog on the topic, I got a bit lost in the detail of off-site car parking demands from an intensive housing development in a Special Character Area.  This was an attempt at a case study into how to make RMA decisions that are not big dramatic changes to an urban environment, rather small scale stuff.

While getting lost, some useful things came to mind. These include:
  • The many competing demands and issues involved in most urban environments. 
  • Many of these issues and demands quickly grow out of being mitigation type issues to ones of access to public resources and equitable sharing of the costs and benefits of growth and change
  • RMA decision making can reinforce the immediate 'obvious' issues, but down play the longer term or more systemic issues. This can be counterproductive
  • The steady push for benefits to be weighed up against costs is shifting the framework for decision making away from mitigation to more of an overall assessment
  • The lack of guidance in plans, beyond bottom line type issues, as to how to weight the various benefits and costs. 
Perhaps the two most distinctive aspects of RMA decision making (in urban environments at least), compared to other decision making, is time and small changes. Planning is supposed to be forward looking and consider possible changes over a long period of time. Time frames extend beyond current generations. How do we account for time, especially where it means current generations forgoing something for the benefit of a future generation? Urban planning deals with big picture matters which are often implemented, or affected, by many small steps and changes. How do we relate these small steps back to the big picture?

Strategic planning is supposed to meet both needs - look long term and sit day-to-day changes in a bigger picture. The Environmental Defence Society's review of the RMA (note 1) calls for a renewed effort on the strategic planning front. They suggest a Future Generations Act to provide an overarching strategic framework for the whole resource management system, with a common set of high level principles. A Future Generations Act would provide a statutory basis for strategic and spatial planning at a national and regional level. The Issues report on the RMA reforms (note 2) raises the same idea - should strategic planning get more support? I made the same comment in my post on the review of the National Policy Statement on Urban Development.

I wonder, however, given the lack of real traction to date with strategic planning, whether it is time to rethink how we address the links between today and tomorrow and between the micro and the macro? If some sort of strategic planning overlay is not going to provide a ruler against which to judge costs and benefits over time and to help make lots of small decisions, then what is?

First up, the Environmental Defence Society in their earlier working reports on the review of the RMA (note 3) suggests a clearer distinction between bottom line environmental decision making and decision making involving choices between different outcomes would help.  They see the potential for two different forms of plans (and decision making). One form would be protection focused, setting non-negotiable bottomlines; the other more stewardship focused, setting out processes and principles for balancing different outcomes (making trade offs) when bottom-lines are not transgressed.

You might say that what the EDS want to do is take Section 6 out of the RMA and elevate the matters covered so that they clearly sit above other issues, and are not subject to some sort of Part 2 ‘wash up’ that may see Section 6 matters traded off for other outcomes. This may be a sensible idea for the long term protection of important natural resources, but where does it leave most day to day urban decision-making?

Effects from off-site car parking demands are definitely in the making trade off camp of decision making, and managing areas of special character is also (although no doubt some would like to put it into the non negotiable bottom-lines category – protecting historic heritage for example). Setting that aside, is there any pointers in the Society’s review as to how to better make trade off decisions?

The EDS report doesn't really say much about how to make better choices and decisions where bottom lines are not involved, apart from the call for more directive strategic planning. There are some useful comments in their earlier discussion of  the RMA (note 2):
  • A different normative direction than that currently provided for in the RMA may help, a focus on wellbeings more generally, for example, seems appropriate. 
  • Providing decision making institutions with a clear set of matters to consider, and (more importantly) policies outlining a clear sense of the relationships between them.
  • Greater use of independent institutions as advisors or decision-makers when making trade-offs (eg Planning Commission or Independent Hearings Panels).
  • Greater use of accountable institutions to make value-based decisions (eg reduce the role of the Environment Court).
The last two points – who makes the decisions - are a choice (trade off) to be made! I'm not too sure if the last two points head in the same direction - greater use of both independents and accountable institutions?

The first point in the EDS list resonates with urban environments and things like urban amenity and urban design.  The RMA reform options paper also suggests a wider focus to urban decision making - not just looking at protection or mitigation of adverse effects, but also the benefits of growth and development.  But does this extend to issues of equitable access to urban resources, not just efficiency of markets? Is mental health (good or poor) both a benefit and cost of urban environments?

It feels like that trade offs are seen to be a simple choice between a bit more growth and a bit less amenity, or a bit less change and a bit less capacity.

The second point in the EDS list is helpful. If costs and benefits are to be weighed up, then plans will need to better identify what should be counted on both sides of the equation. At the moment plans tend to focus on the costs to be addressed, not so much the benefits. Benefits will need to measured with the same degree of scrutiny applied to adverse effects. But with this comes the risk of plans picking out the nice, short term 'benefits' (kind of like an urban sugar rush), but leaving out the benefits that come from hard work.

More direction on which outcomes predominate in certain situations would also help.  My car parking case study highlights the tensions between managing off-street parking, residential character and wide compact city strategies. While the plan highlights these issues, it doesn’t help much with making the call between them.

However both Issues paper don't really explore how to make effective decisions under a wider ambit. Looking at costs, benefits and trade offs doesn't make plan making any easier or decision making any quicker. In fact it makes it sound much harder. If decision making is going to get more complex and strategic planning not smooth the path, then should more attention  be placed on how people make decisions, and developing a set of principles that help to overcome common weaknesses?

For example, the difference between bottom lines and trade offs can be described as compensatory and non-compensatory decision making. In compensatory decision making there is (supposed to be) a critical examination of costs and benefits. The benefits need to outweigh the costs, with the benefits ‘compensating’ for the costs.  Non compensatory decision making tends to base decisions on one critical factor. If that factor is achieved (or not achieved), then the option is selected (or discarded).

Interestingly, compensatory and non-compensatory strategies require different amounts of cognitive effort, with compensatory strategies requiring more mental effort than non-compensatory strategies.  Non-compensatory decision making tends to shortcut or simplify the compensatory process by applying heuristics to quickly evaluate the alternatives with minimal effort. Non-compensatory decision rules can allow faster decisions with (sometimes) acceptable reduction of accuracy. But not always.

This means that when making trade-offs, it can be easy to slip from compensatory approaches into non-compensatory decision making mode, especially if there are a complex range of matters to take into account.

Other problems arise with people intuitively placing more weight on costs than benefits, under or over estimating risks, discounting future costs and benefits and relying upon what they see and are familiar with as reference points.

This is where plans become important in helping to keep decision making 'on-track', especially as planning has a strong element of time to it (needs of future generations), and of juggling local and wider impacts, all of which tend to complicate decision-making.

If plans are to better help decision makers decide how different ‘effects’ should be traded off, then are there some things plans could do better. These include:

1. The need to set decision making trigger points, for example at what point do effects (positive and negative) start to significantly interact and potential impinge outcomes associated with other resources and outcomes?
2. Better understanding the nature and scale of consequences for urban environments, positive and negative, short lived or permanent.
3. Pre-determining weight or importance. Language is important and there needs to be more of a graduation of weight between a simple dichotomy between minor/more than minor.
4. Setting a framework to address time and cumulative effects.

Having said all that, I don't think this is the end of the story. There needs to be a whole new layer added to urban planning about equity of urban environments. More on that in the future

Notes

(1):  https://www.eds.org.nz/assets/Publications/RMLR%20Pathway%20to%20Reform%20-%20Paper%202%20FINAL.pdf?k=04a4340f0b

(2) https://www.mfe.govt.nz/sites/default/files/media/RMA/comprehensive-review-of-the-resource-management-system-opportunities-for-change-issues-and-options-paper.pdf

(3) https://www.eds.org.nz/assets/Publications/RMLR%20Synthesis%20Report_LO-RES.pdf