Contents SoE 2003
New South Wales State of the Environment
Toward Sustainability Human Settlement Atmosphere Land Water Biodiversity   See Backgrounder
Toward Environmental Sustainability

SoE 2003 > Toward environmental sustainability > 1.1 State of the NSW Environment

Chapter 1: Toward Environmental Sustainability

1.1 State of the NSW Environment

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1.1 State of the NSW Environment

Some aspects of the environment are improving, while others are getting worse. The key pressure is unsustainable rates of resource depletion. New approaches are required and are beginning to appear, although to succeed they will require concerted and sustained effort.

NSW is making good progress toward sustainability in some key environmental areas. Urban air and recreational water quality have improved substantially. Conservation areas now cover 7.3% of the State and there is progress across management of waste recycling, river flows, acid sulfate soils and contaminated land.

However, NSW has been less successful in other critical areas. Water extraction is unsustainable, and while the rate of clearing has slowed, native vegetation removal continues to have a serious impact on the health of ecosystems across wide areas of the State. Greenhouse gas emissions continue to increase.

This report confirms other findings that continuing the current path of resource use will have serious environmental and economic consequences for NSW. There is unsustainable use of ground and surface water, energy, soils, native vegetation and fish.

The pressures generally reflect the sum of many individual actions by landholders, industries and consumers, and the relative underdevelopment of economic systems as they apply to the use of natural resources and the environment. Encouragingly, the NSW community appears to have accepted the need for change and there are positive signs of new actions by governments, companies and individuals. At a policy level, new approaches and major reforms are being brought forward to address longstanding problems.

There is currently an opportunity for a new consensus about the rights and responsibilities of land managers and resource users. This could be the basis for new mechanisms to achieve sustainable rates of access to natural resources, more conservation on private land and recognition of the value of ecosystem services in mainstream markets and prices.

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NSW Indicators


Status of Indicator

1.1 Resource consumption

Based on ecological footprint analysis, NSW increased its overall consumption of natural resources by 23% between 1993–94 and 1998–99. The increase per capita was 15%, with the balance attributable to population growth.

1.2 Community attitudes and actions

The community continues to rate protecting the environment as a high priority, and to adopt new actions to help achieve this.

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Determinants of the state of the NSW environment

In general terms, the state of the environment reflects the interaction of past and present human activity with its underlying characteristics. Some natural features are relatively fixed or finite, such as land and soils, while others are highly variable, such as climate or flora and fauna. Human activity is an impact that can be managed. The key determinants of human impact are population numbers, the type and efficiency of production systems, and the level and pattern of final consumption.

As a result, the most effective ways to improve environmental outcomes as well as secure high living standards are to extract natural resources at sustainable rates and maximise the efficiency of production systems.

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Underlying characteristics of NSW climate, land and biota

NSW landscapes have been shaped by extremes in temperature, rainfall and evaporation, which have produced infertile soils and scarce water resources.

The climate is generally dry but highly variable, with large fluctuations in rainfall, temperature and evaporation across regions and over time. Rainfall across NSW varies by as much as 35% from annual averages, and extended periods of very little rain, high evaporation and drought are normal (ABS 2002c). The trans-Pacific climate phenomenon known as the Southern Oscillation increases these fluctuations, often resulting in extreme weather events, such as major droughts and storms (WMO 2003; EPA 1997a; EPA 2000a). Climate also reduces the amount of rainfall available to supply fresh water: only 12% of rainfall in Australia is available in surface water, rivers and streams (NLWRA 2002). These conditions have an impact on soils, rivers and biota through wind and water erosion, desiccation and fire.

Australian soils are very old and difficult to restore once lost. For management purposes they are best considered non-renewable. While their physical and nutrient content can be improved for agriculture by adding fertilisers and conditioners, many NSW soils are readily susceptible to degradation.

Australian flora and fauna have adapted to wide fluctuations in natural water supply and extreme conditions. However, human actions to moderate variability and use the land for production in NSW by controlling river flows or clearing vegetation have frequently created conditions favouring exotic species over native species.

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Population and economy

At September 2002, the population of NSW was 6.7 million people or around one-third of Australians. Population distribution is uneven, with about 85% of people living near the coast and 75% in the highly urbanised environments of Sydney, Newcastle and Wollongong (ABS 2002a). Over the last century, the NSW population has increased five-fold.

From an economic perspective, average income and wealth are high by world standards, meaning that the people of NSW have a large capacity to improve or degrade the environment through production activities and purchasing decisions. The NSW economy has increased 28-fold over the last hundred years.

The effects of population and economic growth on the environment depend on a large number of complex factors. The most important are the quantity of materials taken from the environment, the efficiency with which they are transformed into goods and services, and the environmental impacts of their use and disposal. If an economy becomes more efficient or shifts towards products or services with lower impact, the environmental effects of a given level of activity can be reduced, while living standards increase. This is discussed in more detail below, where measures charting the progress of NSW toward sustainability are presented.

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Community attitudes

Community and individual concern for the environment and willingness to take action to reduce impacts are vital elements in achieving sustainable outcomes. The results of a series of Who cares about the environment? surveys in NSW indicate that the community continues to give high priority to environmental issues (EPA 1994; EPA 1997b; EPA 2000b). The research has also pointed to small but significant increases in environmentally responsible behaviour changes over this period. The actions taken in response to these concerns include reducing the consumption of water and energy and the generation of domestic waste (EPA 2000b).

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Assessing progress toward sustainability

The wide use of the concept 'sustainability' reflects a broad agreement that people living today have an obligation to protect the health, diversity and productivity of the environment for the benefit of current and future generations. This is because a healthy environment is a necessary element of a productive economy, and hence human wellbeing. In this report sustainability refers to environmentally sound economic growth balanced over time. By definition, unsustainable practices cannot continue indefinitely without degrading current conditions and reducing future opportunities.

Australia adopted sustainability goals and objectives in 1992 through the National Strategy for Ecologically Sustainable Development (Commonwealth of Australia 1992) and in many environmental and other statutes since that time.

Over recent years, there has been an extensive global effort to develop new tools and approaches to reduce the complexity of achieving sustainability and highlight the fundamental links between the economy, society and the environment. While these are not fully integrated with traditional economic and social accounting frameworks, they are providing information for planners, decision-makers and individuals around the globe to help chart the pathways toward sustainability.

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Measuring sustainability

Gross domestic product (GDP) is the conventional measure used to summarise a nation's economic condition and the implied wellbeing of its citizens. However, from an environmental perspective, there are two main reasons why GDP does not provide an accurate picture of progress toward sustainability:

  • GDP measures flows, not stocks. For example, GDP records fish catch or grain harvest, but not the status of underlying fish stocks or soils. High GDP can mask levels of resource extraction that are depleting stocks and are unsustainable.
  • GDP measures do not include non-monetised aspects of activity. For example, polluting oil spills are recorded as increases in GDP because they generate clean-up activity, while the loss of unique species or harm to ecosystems are generally excluded from GDP.

A number of approaches are being taken to provide more complete measures of the performance of whole economies and environments. While this is still an evolving field, some valuable insights are available.

In early 2002, the Australian Bureau of Statistics (ABS) released the first national report on Australia's overall progress toward sustainability, Measuring Australia's Progress. The research reported against 15 headline sustainability indicators (ABS 2002b). The most widely reported review of the report concluded that Australia's ongoing social and economic success appeared to be occurring at the expense of the natural environment (Gittins 2002). The ABS is also developing more detailed accounts for key environmental attributes, including fisheries, water, energy and greenhouse gas emissions. These are expected to contribute to the ability to assess Australia's progress toward sustainability.

Environment Australia also released its first national sustainability progress report in 2002 (Environment Australia 2002). In a similar approach to the one used by the ABS, the assessment was based on a set of 24 headline sustainability indicators. The report found that while individual and community wellbeing is improving, a lack of trend data meant it was not possible to judge the success of efforts to protect biological diversity and maintain ecological processes and life-support systems.

A non-government effort to include estimates of changes in economic, social and environmental outcomes in a modified GDP methodology is the Australia Institute's 'Genuine Progress Indicator' (GPI) (Hamilton & Saddler 1997; Hamilton & Denniss 2000). Figure 1.1 provides a comparison between Australia's GDP and its calculated GPI. The methodology seeks to add data on the environment and sound actions to the traditional economic information of orthodox GDP measurement.

Figure 1.1: Comparison between the Australian GDP and GPI, 1950–2000

Figure 1.1

Download Data

Source: The Australia Institute, as at 2003

Internationally over the last three years, a new environmental sustainability index has been developed to compare the environmental performance of 142 countries (Global Leaders of Tomorrow Environment Task Force 2002). The index is based on 20 key indicators and 68 underlying datasets. The indicators report against environmental systems and stresses, human vulnerability to environmental risk, the institutional capacity to respond to issues and the nation's stewardship of its natural resources. Australia was placed 16th overall by the index in 2002.

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Ecological footprint analysis of NSW

'Ecological footprint' analysis is another technique that attempts to quantify the aggregate ultimate impact of economic activity on the environment. It was first reported for NSW in State of the Environment 1997 (EPA 1997a). The technique estimates the area of land required to provide the range of goods and services consumed. Land area is used as a common unit of measure to allow comparisons across time and different populations. Estimates include the land required for water collection, waste disposal, food and energy production, transport, residential occupation and the like.

Refinements to the methodology since 1997 (Lenzen & Murray 2001) have allowed an update of the earlier footprint estimates for NSW and comparisons with recent data. These show that the NSW community increased its total footprint by 23% in the five years between 1993–94 and 1998–99. During this period population grew by 7%. Table 1.1 shows the results expressed on a per capita basis. Residents of the greater metropolitan area are estimated to generate a footprint that is 5% larger than those living in rural areas.

Table 1.1: NSW per capita ecological footprint

1993–94 (hectares)

1998–99 (hectares)


Greater metropolitan area



Up 16%




Up 15%

Source: EPA data, as at 2002

Ecological footprint analysis is useful for communicating the relative environmental impact of individuals making up the population. However, as the methodology is still developing, it should be considered alongside other economic and social indicators (ECOTEC 2001).

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Response to the sustainability challenge

An enormous amount of activity around the world is seeking to move communities closer to environmental sustainability. In NSW, governments, companies and the community are all very active as the indicative highlights below demonstrate.

The Commonwealth, State and local governments have all advanced significant programs to address environmental matters for which they are responsible.

Governments at all levels collaborate in key areas through formal joint decision-making and cost-sharing agreements. For example, the National Environment Protection Council, which consists of the Commonwealth, State and Territory Environment Ministers, has worked since 1998 to develop and implement National Environment Protection Measures. Measures to date have addressed the management of contaminated sites, transport of hazardous wastes, air quality standards, and the provision of pollution information to the public.

Major jointly funded projects include the National Action Plan for Salinity and Water Quality (Commonwealth of Australia 2000) and water reform. In addition, governments have agreed to a number of natural resource management targets to enable better tracking of progress over time. These targets will be reflected in state and regional catchment and natural resource management plans. Improved baseline information about much of Australia's natural resources, such as soils, water, vegetation and biodiversity, are also now being provided through the National Land and Water Resources Audit.

In NSW an extensive array of programs is being developed or implemented to make progress toward sustainability including:

Local councils, communities, businesses, industries and individuals are also taking action to help create a more sustainable NSW.

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Effectiveness of responses

Significant gains have been achieved in recent decades in some very important environmental areas. Highlights include reductions in air emissions from factories and vehicles, leading to improvements in urban air quality; and greatly reduced pollution from industry and sewage treatment, resulting in better recreational water quality.

The large number of sustainability initiatives under way is a positive sign of society's willingness to respond to the complex and significant environmental challenges confronting NSW. In most cases, it is too soon to expect to see success reflected in environmental gains. Coordination and integration of environmental, social and economic activities across government, the community and industry sectors are improving.

However, many of the environmental problems facing NSW have been created over decades, so it is not surprising that serious challenges remain. These include the health of inland rivers and wetlands, land degradation, loss of natural biodiversity, and rising greenhouse gas emissions which contribute to global climate change. These are all presented in detail in this report.

At a national level, the Australia State of the Environment Report 2001 found that there had been little improvement in the condition of the Australian environment since the 1996 report and that in some critical aspects, there had been a deterioration (Australian State of the Environment Committee 2001). In 2002, the Prime Minister's Science, Engineering and Innovation Council confirmed the conclusions of the national report, stating that 'Australia's natural systems are in decline … The causes are excessive human alteration of ecosystems, without recognition of the processes that need to be maintained so that essential ecosystem services continue to be delivered to us' (PMSEIC 2002).

Based on the data assembled for this report, the position in NSW is similar. Although many sound programs and reform policies are in place and much positive activity is under way, a number of longstanding key pressures on the environment still prevail. These include:

  • rapidly rising demand for energy, transport, buildings and commodities and continued overuse of water resources, without commensurate offsetting efficiency gains that would moderate overall environmental impact
  • systematic market failures that exclude environmental consequences from prices and property rights and undermine the efforts of those farmers, industries and consumers who want to protect soils, rivers and biodiversity through sustainable production and consumption.

In essence, very few authorities believe that the current pace of change to sustainable actions and behaviours across the community has reached the speed and breadth needed to overtake and correct an underlying path of degradation.

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Future directions

The nature of the environmental challenge is changing fundamentally. In the past, the major issues were presented in highly polarised terms. Environment protection was often viewed as an alternative to economic development and the resolution of environmental problems generally approached by either regulatory controls or purely voluntary measures.

Most of the major challenges set out in this report are more complex, with the negative conditions in the environment a result of the actions of a large number of people. The interdependence of a healthy environment and a strong economy is a concept now more clearly understood, and future approaches will need to be based on a more sophisticated integration of regulatory, economic and persuasive approaches. Change will also need to be managed in an inclusive manner. As outlined above, many positive actions in this direction are already under way at all levels of the community.

In November 2002, the Wentworth Group of Concerned Scientists released their Blueprint for a Living Continent, which summarised the key changes members believe should be adopted to achieve environmental sustainability in natural resource management (Wentworth Group 2002). These included:

  • resolving water property rights and obligations
  • restoring environmental flows to the nation's major waterways
  • ending broadscale clearing of remnant native vegetation
  • paying farmers for the environmental services they maintain on the land where these exceed agreed definitions of duty of care
  • addressing the subsidies paid that perpetuate environmental degradation and depletion of natural resource stocks.

The Wentworth Group has also released the Blueprint for a National Water Plan, which recommends improvements to water management including establishing water entitlement and trading systems (Wentworth Group 2003).

The NSW Government is currently evaluating these promising proposals.

Several other key strategic opportunities have been identified during the preparation of this report.

Based on the Wentworth Group proposal, there is potential for a new consensus on the rights and responsibilities of landholders relating to land use, water access and conservation. There is an emerging understanding that both consumers and producers of goods and services benefit from access to land and natural resources, and both have a responsibility to move NSW to a more sustainable position. For example, where access to natural resources is free or priced too low, competition between producers creates pressure to over-exploit resources and cause an environmental impact. While in the short term consumers enjoy lower prices, in time the community is the poorer through degradation of its underlying environmental asset base.

A clearer definition of rights and responsibilities could help develop mechanisms to achieve an equitable sharing of the costs and benefits of conservation on private land, sustainable rates of access to natural resources and a recognition of the value of environmental services in mainstream prices and markets.

There is also a significant potential to achieve both environmental gain and reduced economic costs through new types of efficiency, conservation and demand management programs. These could use a combination of price corrections, new technologies and the creation of new markets to supplement traditional regulatory and persuasive approaches to environment protection. These new approaches could be particularly valuable in the areas of water, energy, transport and their associated environmental impacts. They would signal scarcity and true costs to consumers which would stimulate innovation and improvements in efficiency that could maintain or increase living standards while also reducing environmental impacts.

There is also consensus on the need for better environmental monitoring to provide credible scientific data for subsequent reporting and auditing purposes (Industry Commission 1999; Yenken & Wilkinson 2001; Farley et al. 2002). The results of the National Land and Water Resources Audit demonstrate that this data needs to be based on consistent methodologies and indicators that can be used to guide and inform decision-makers, natural resource managers and members of the community.

In summary, it is clear that there is a strong positive momentum toward addressing difficult and longstanding environmental and natural resource management problems. There is also increased convergence between stakeholders about the areas where reform should be focused and the outlines of new approaches. However, concerted and sustained effort across governments, industry and the community will be required to make the needed difference.

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