CO2 production infographic icon

Carbon emissions

Carbon emissions fell by 13% while NSW GSP grew by 26% between 2010 and 2019

Business person stands with currency infographic icon

Service-based economy

~ 70%

of the NSW economy is service-based

A steady reduction in resource dependency and lower carbon emissions from energy production are two areas where economic growth is not being achieved at the expense of the environment.

Why economic activity and the environment are important

Over the past 30 years, the NSW economy has been shifting from a resource-intensive industry base to a service-based economy that has reduced environmental impacts.

Environmental-economic accounts, which supplement conventional economic accounts, can enhance decision-making by enabling environmental factors to be considered in decisions that have traditionally been based on economic factors alone.

Status and Trends

Since 1990, the NSW economy has grown by almost 2.4% per annum. Gross State Product (GSP) has increased in real terms by about $23,400 per capita over the same period. Carbon emissions fell by 13% from 156,594 kilo tonnes (kt) to 136,579 kilo tonnes (kt), while the NSW GSP grew by 26% between 2010 and 2019. Around 70% of the NSW economy is service-based, indicating the NSW economy is becoming less resource-intensive.

The decrease in emissions in the 1990’s was largely due to having avoided primary forest clearing, with the land sector going from a significant source of emissions in 1990 to a net sink of carbon that decade. Emissions from stationary energy and transport and re-clearing of land for agriculture continued to increase until about a decade ago. Emission reduction from electricity generation, mining fugitives, waste and net sequestration by the land sector contributed to emission reductions over the past decade, however transport emissions continue to increase.

Spotlight figure 2: Relative change in NSW economic performance, emissions and energy intensity 1990–2019

ABS 2020a (cat. no. 5220.0), Science, energy and Resources, National Greenhouse Accounts 2019 and Australian Energy Statistics, Table F

The Spotlight figure 2 shows how economic performance (measured as GSP), carbon emissions intensity and energy intensity (both measured in tonnes per dollar of GSP) have changed relative to 1990 levels. Relative to economic activity, overall carbon emission and energy intensity has steadily declined since 1990, indicative of a decoupling between emissions and economic growth.

The trends over the past decade indicate reductions in the carbon emissions intensity of the NSW economy. This is evident based on the emissions intensity of stationary energy decreasing due to improved power generation efficiencies, an increase in the share of the renewables, greater energy efficiency and fuel switching.


The impacts of processing and use of resources, the production of goods and services, transport and waste generation, including greenhouse gas emissions, are central to how economic activity generates environmental pressures. Decoupling environmental pressures from economic growth is critical to creating a sustainable future.


The NSW Government uses various economic tools to manage its environmental resources, including cost-benefit analysis, market-based instruments and program evaluations.

Economic instruments, such as levies or taxes, subsidies, tradeable permits and performance-based regulatory charges, use market-based responses rather than traditional regulatory approaches to offer a more flexible way to meet environmental quality objectives. A major initiative that relies on a market-based scheme is the container deposit scheme Return and Earn.

Related topics: Population | Energy Consumption | Waste and Recycling


Economies are intrinsically related to the natural environment. This interaction is not simple, with different sectors of an economy having different levels and types of environmental impacts.

Economic growth (the increase in the production of goods and services in an economy over time) is influenced by various factors, including population growth, improved productivity, new technologies and growth in human capital (through higher educational levels, for example).

While population growth can affect the environment through increased consumption, resource use and waste production (see the Population topic), factors such as improved productivity and new technologies can reduce the resource intensity of goods and services by producing the same amount using fewer resources. Environmental impacts will also depend on whether an economy uses domestic or imported resources and whether the goods and services produced are consumed locally or exported.

The emerging field of environmental-economic accounting can potentially enhance the conventional system of economic accounting (the System of National Accounts) by extending these accounts to cover aspects of resource management from an environmental perspective. Although changes in natural resource value and environmental quality arising from economic activity are commonly excluded from conventional accounts, they are considered in environmental-economic accounting. Further information on these issues is provided in this topic and elsewhere in this report (see Urban Water Supply, Energy Consumption, Greenhouse Gas Emissions and Waste and Recycling).

NSW has the largest economy in Australia, contributing around one-third of national economic output in 2020. Between 1990–91 and 2019–20, the economic output of NSW doubled. Over that period, the state economy has sustained positive growth in real Gross State Product (GSP) of around 2.4% per annum on average (see Figure 2.1).

Figure 2.1: Economic growth (annual growth in real GSP), 1990–91 to 2017–18

ABS 2020a (cat. no. 5220.0)

NSW GSP per capita increased by approximately $23,400 in real terms between 1990–91 and 2019–20, reaching $76,876 in 2020 (ABS 2020a, cat. no. 5220.0, Table 1).

The three-year period covered by this report includes the negative impact of the COVID-19 pandemic on the NSW economy in 2020. The average annual increase in economic growth was 1.4% for the three years to 2019–20, including growth of –0.7% in 2019–20 which offset average annual growth of 2.5% for the two years prior. Business investment grew 3.6% on average for the period, reflecting –5.0% growth in investment in 2020 and 7.9% average growth in the preceding two years (ABS 2020a, cat. no. 5220, Table 1 & Table 2). Employment grew on average by 2.1%, including –0.1% in 2020 which offset the 3.2% average growth in employment in the earlier two years (ABS cat no. 6291).

Structural change in the economy

NSW is now primarily a service-based economy, with services contributing more than 70% of GSP in 2019–20 (ABS 2020a, 5220.0, Table 2).

Using chain volume measures to assess total industry gross value added (GVA), the five largest industries in NSW in 2020 were:

  • financial and insurance services (12.6%)
  • professional, scientific and technical services (9.3%)
  • construction (7.8%)
  • health care and social assistance (7.2%)
  • manufacturing (5.5%).

Over the past 30 years, the NSW economy has been shifting from resource-intensive industries, such as manufacturing, mining and agricultural production, to the services and technological sectors. These sectors are less dependent on the use of natural resources and typically involve lower environmental impacts than primary and secondary industries.

While manufacturing remains a major sector in the NSW economy, annual GVA has fallen by 7% since 1990, when the sector accounted for 12.8% of GVA (ABS 2020a).

Over the same period, the financial and insurance services sector grew by over 236%, overtaking manufacturing as the state's largest sector in 2002. Information, media and telecommunications is the fastest growing sector, with real growth of 275%. Other growing sectors include mining (166% growth of the 30-year period); agriculture, forestry and fishing (33%) and utilities (electricity, gas and water services –32%). (ABS 2020a, cat. no. 5220.0, Table 2).

The current effect of economic growth on greenhouse gas emissions and energy use is indicative of the changing relationship over time between economic activity and its environmental effects, including resource use. Figure 2.2 contrasts the change relative to 1990 levels for a range of performance measures – economic performance (measured as GSP), population growth, carbon (greenhouse gas) emissions and total energy consumption.

Since 1990, real GSP has grown at an average annual rate of 2.4%. Over the same period, population growth has occurred at a slower rate than economic growth, averaging 1.1% (ABS 2020a, cat. no. 3101.0, Table 4).

While the key drivers of economic and population growth have continued to grow steadily, total carbon emissions fell sharply from 1990 to 1993 and have fluctuated since then, rising till 2007 before falling back to the 1995 level by 2019 (see Figure 2.2). The pattern is less regular for energy consumption which has largely grown at about the same rate as population, before declining steadily from around 2011.

Figure 2.2: Relative change in economic performance, population, energy consumption and carbon emissions in NSW, 1989–90 to 2018–19

ABS 2020a (cat. no. 5220.0), ABS 2020a (cat. no. 3101.0), Department of Industry, Science, energy and Resources, National Greenhouse Accounts 2019 and Australian Energy Statistics, Table F

Figure 2.3 shows the change over time in the intensity of carbon emissions and energy in the NSW economy: that is, the emissions produced or the energy used for each dollar of GSP.

Relative to economic activity, overall carbon emissions and energy intensity have both declined notably since 1990. Carbon emissions in tonnes per dollar of GSP have fallen below 40% of their 1990 levels. Meanwhile, energy intensity as measured by energy consumption per unit of GSP fell to a lesser extent than carbon emissions to about 60% of 1990 levels. The emission intensity of road transport has improved (emissions/PJ) due to improved fuel efficiencies and lower fuel consumption per unit of load carried. However, the growth in transport task has outpaced this improvement with transport emissions continuing to increase.

Figure 2.3: Emissions and energy use relative to the NSW economy, 1990–2019


Revised energy consumption data

ABS 2020a (cat. no. 5220.0), Department of Industry, Science, energy and Resources, National Greenhouse Accounts 2019 and Australian Energy Statistics, Table F

Sustained economic growth relies on energy for the production of goods and the delivery of services. While the NSW population and economy have grown, energy consumption has fallen (see the Population and Energy Consumption topics). Electricity consumption and generation has been and continues to be affected by many, including:

  • adoption of more energy-efficient technologies (see the Energy Consumption topic)
  • a significant, industry-led transition towards low-emission renewable energy sources in NSW to generate electricity (see the Energy Consumption topic)
  • greater consumer engagement and attention to energy use and cost, including increasing the amount of generation for own use.

As noted above, the economy has been restructuring away from the production of goods towards the delivery of services, which typically requires less energy per dollar of value added. Figure 2.3 shows that emissions from the energy sector per dollar have also fallen since 1990, with this decline closely matching the reduction in energy intensity.

Figure 2.2 shows that total energy use has fallen from around 2011 of this decade, while Figure 2.3 indicates that energy emissions per GSP also dipped below energy intensity from about this time. This corresponded with a downturn in economic activity due to the global financial crisis, but more significantly the rapid uptake of energy from renewable resources in NSW from about this time.

Energy pricing

Electricity prices are driven over time by several key factors including:

  • changes in network costs
  • wholesale costs (that is, the costs of generating electricity from an energy source)
  • environmental costs (such as feed-in tariffs for solar panels)
  • retail costs and margins.

The Australian Energy Regulator reported that in 2020–21 spot wholesale energy prices in NSW had fallen to their lowest levels since 2015–16. The increased market penetration of renewables is primarily responsible for this reduction in wholesale costs. One consequence of the increase of renewables in the energy mix is that the state’s coal-fired electricity generators may be retired early due to their reduced profitability. Without further investment in renewables and dispatchable power, this may increase wholesale costs as supply is curtailed.

New sources of energy

Renewables are now the cheapest source of new energy (IEA 2021). The Australian Energy Market Operator (AEMO) prescribes the uptake of renewable energy and investment and related infrastructure as an integral part of its 2020 Integrated System Plan designed to deliver the lowest cost, secure and reliable energy system to meet consumer needs.

The NSW Electricity Infrastructure Roadmap (DPIE 2020) is a plan to incorporate the state’s renewable energy and pumped hydro resources into future energy generation, replacing the coal-fired generators scheduled to close, lowering energy prices and improving competitiveness. This roadmap includes establishing the renewable energy zones recommended by the AEMO.

Current use of economic analysis

Economic analysis is used to support policies and make decisions that either improve environmental outcomes at least cost or provide the greatest net benefit to the NSW community. These assessments help the NSW Government meet its commitments to industry and the community by:

  • reducing the costs of regulation
  • providing conditions that increase the competitiveness of doing business in NSW
  • safeguarding the environment and the people of NSW.

By harnessing financial incentives, market-based economic instruments can provide policymakers with an alternative to conventional regulation by delivering environmental outcomes at minimal cost to business and the community.

Cost-benefit analysis: regulatory review and environmental evaluation

Cost-benefit analysis (CBA) is used to enable the trade-offs between economic activity and environmental outcomes to be appropriately weighed. Analyses are required for all new policies and programs, ensuring that environmental initiatives and regulations are properly evaluated and the desired environmental goals are achieved through measures that provide net economic benefits to the community. Environment-related benefits in cost-benefit analyses could include greenhouse gas emissions reduction or savings, lower health costs from reduced air pollution and improved water quality.

In its NSW Climate Change Policy Framework (OEH 2016), the NSW Government committed to developing a benchmark value for emissions savings and applying this consistently in government economic appraisal. This means cost-benefit analysis for all new policies and programs will use the same value for any emissions savings benefit.

Data collection on conservation programs and the ex-post CBA evaluation data collected by NSW Treasury’s Centre for Program Evaluation will continue to contribute to insights about the potential environmental impacts of different types of development that can be incorporated in future CBAs. New data may also enable the quantification of environmental impacts where the availability of an appropriate metric does not currently exist. For example, the spot price for ecosystem and species credits issued under the NSW Biodiversity Offsets Scheme (which is one proxy for the value of the ecosystem or species concerned), may be used to indicate the economic value of species conservation, and associated benefits from ecosystem/species conservation. This approach was used to quantify species conservation benefits in the NSW Saving Our Species program CBA.

Use of economic instruments in environment protection

Economic instruments encourage behavioural responses to market forces that help address the environmental concerns of the wider community in a more flexible way with less cost and government intervention. Economic instruments include taxes, subsidies, offsets, tradeable permits and financial incentives.

The ultimate goal of economic instruments is to provide incentives for businesses and the community to consider the wider social impacts of their behaviour. This allows economic growth while at the same time achieving more efficient allocation of resources.

In NSW a range of economic instruments are used to improve both economic efficiency and environmental outcomes. Examples include:

  • the waste levy, which provides financial incentives for residents and businesses to reduce the amount of waste they send to landfill
  • solar feed-in tariffs, providing an incentive for investing in household solar generation capacity
  • the Biodiversity Offsets Scheme, which provides for development impacts on biodiversity to be offset by gains secured through stewardship agreements using the robust and repeatable biodiversity assessment methodology.
  • the Hunter River Salinity Trading Scheme, which allows industry participants to trade with each other for the right to discharge saline wastewater, without placing excessive pressure on the river’s ecosystem
  • load-based licensing, which imposes a charge on industrial facilities for each tonne of pollution they emit, encouraging these businesses to incorporate the wider social costs from pollution into their production decisions
  • risk-based licensing, which matches the degree of regulatory oversight with the level of environmental risk posed by licensed operations by targeting poor performers and creating a financial incentive for facilities to improve their systems and performance
  • the Return and Earn container deposit scheme’s financial incentives which encourage the return of used drink containers for recycling
  • the NSW Energy Savings Scheme, which creates an incentive to reduce the consumption of electricity and gas by requiring electricity retailers and some large users to meet targets for energy savings certificates that are created on a voluntary basis by private sector service providers.

Rationale and history

Environmental-economic accounting is a systematic framework for collecting, managing and integrating environmental and economic data to enable reporting, analysis, strategic policy and decision-making, and program monitoring. Environmental-economic accounting expands the boundaries of the System of National Accounts, the conventional method of recording and tracking changes in economic activity at national and state levels.

The Australian System of National Accounts uses a range of indicators to show changes in an economy over time, including changes in industry production, income, investment and household consumption. However, economic indicators only tell part of the story of how a society is progressing and generally do not include information on changes in environmental quality or resource conditions. By focusing only on changes in economic activity, conventional accounts can overlook pressures on land and other environmental assets, often referred to as ‘natural capital’, which includes renewable and non-renewable resources. Individuals and communities obtain benefits from the use of ecosystem service flows derived from these environmental assets.

Data from environmental-economic accounts can be used to show linkages between economic activity and various aspects of natural resource use, including the generation of ‘residuals’ (such as waste products and pollutants). Data from accounts can be used to explore trends in the use of natural resources, how these trends affect the extent and condition of remaining stocks and patterns of pollution and waste discharged to the environment. This helps decision-makers explore relationships between the economy and the environment (for example, see UN 2012).

System of environmental-economic accounts

The System of Environmental-Economic Accounting (SEEA) Central Framework was developed by the United Nations Statistics Division and adopted as an international statistical standard by the UN Statistical Commission in 2012.

The SEEA Central Framework uses a systematic approach to linking environmental and economic information to describe the stocks and flows of natural resources. Individual accounts are relevant to the analysis of a specific resource or issue and a related set of environmental and economic policy issues.

A major development in the environmental-economic accounting field in 2021 was the UN Statistical Commission’s endorsement of SEEA-Ecosystem Accounting (SEEA-EA) as an international statistical standard. SEEA-EA involves the concepts of ecosystems as assets (that is, natural capital) and ecosystem services as flows of goods and services to users derived from these assets. Accounts can be expressed in physical and monetary units.

Adoption of SEEA in Australia and NSW

Since the endorsement of the SEEA Central Framework as an international statistical standard, the Australian Bureau of Statistics (ABS) has produced national-level environmental-economic accounts, including experimental accounts, for the resources and issues discussed below.

Water consumption

Water Account, Australia 2018–19 presents information on the physical and monetary supply and use of water in the Australian economy and was released in November 2020.

The water account consists of supply and use tables for both physical volumes and monetary values which describe water flows from the environment to the economy, within the economy and from the economy to the environment

Energy consumption

Energy Account, Australia 2018–19 presents estimates of energy asset and physical/monetary supply and use. It also presents key indicators to support data users.

Direct greenhouse gas emissions

Direct greenhouse gas emissions is presented in Australian Environmental-Economic Accounts (AEEA), 2019 as one of the accounts for key environmental themes released in July 2019.

Estimates of direct greenhouse gas (GHG) emissions presents direct emissions produced from sources within the boundary of an organisation and as a result of that organisation’s activities.

National waste accounts

The National Waste Account which covered three years from 2016–to 2019 and provided time series data on waste materials, management and economic indicators was updated in November 2020.

Waste accounts provide an economy-wide view of how waste and recycled materials are managed and re-used in Australia. They includes information on the types and volume of waste generated by industry, government and households; the management, treatment and disposal of various types of waste material; amount recycled and economic indicators for the waste sector.

National land accounts

The first National Land Account for Australia was published by ABS in June 2021.

The account provides a foundation of knowledge on Australia’s land for better decision-making in the future.

It will help in monitoring changes in vegetation and land cover and understanding when and how they occurred; evaluating policies and programs to see if they are having the intended impact; and understanding the environmental economic outcomes of land use.

National EEA Strategy

Following meetings between Commonwealth, State and Territory environment ministers, the jurisdictions agreed to collaborate to progress a common national approach to environmental-economic accounting, including data-sharing between jurisdictions. This agreement led to the National Strategy for Environmental-Economic Accounting (Commonwealth of Australia 2018), which was endorsed by environment ministers in April 2018. The strategy sets out priority actions and timeframes to progress environmental-economic accounting at national and jurisdictional levels. Development of individual pilot and experimental environmental-economic accounts is now underway in several jurisdictions, including NSW.

The ABS accounts can be used for national-scale planning and can be used by NSW to identify differences in resource use and impact between the states and jurisdictions. For policy and planning purposes, however, NSW requires accounts at a regional level. To this end, NSW is exploring the development of pilot accounts that relate to NSW’s key environmental management priorities, including trade-offs between urban development and conservation values, sustainable land use based on soil capability, and socio-economic pressures on threatened species habitats and populations. An important input into several of these exploratory and pilot accounts will be the use of the ABS Land Account for NSW, which comprises regional data for some 575 regions of NSW for land use, land cover and land tenure for 2011 and 2016 (National Land Account). This suite of accounts will provide a valuable foundation for subsequent accounts that can be used to inform NSW environmental policy development and program management, by identifying links, interactions and dependencies between natural capital, ecosystem services and economic development.


The State of the Environment Pressure-State-Response model of reporting treats the topics of Population and Economic activity and the environment as drivers of environmental change. Unlike pressures, which have a direct impact on specific environmental outcomes, these drivers of environmental change are broader and more diffuse in their effects. These effects are mediated through a multitude of pathways and at a range of scales, facilitating:

  • the processing and use of resources
  • the production of goods and services
  • the generation of waste.

Economic growth

A healthy environment provides ecosystem services and resources that underpin a thriving economy. Economic growth is widely regarded as critical for improving societal living standards, but it is debatable how much environmental damage or degradation is either inevitable or acceptable in order to generate improved material wellbeing. The decoupling demonstrated in this chapter between economic growth and environmental impacts, in particular carbon emissions, indicates that economic growth does not necessarily need to be achieved at the cost of significant environmental harm. Actions to further reduce carbon emissions may in fact increase economic growth.

Conversely, slowdowns in economic growth are not necessarily accompanied by improvements in environmental outcomes. Extended recessions can lead to improved environmental outcomes (reduced economic activity resulting in reduced emissions, for example) but it can also result in additional damage/degradation as business enterprises struggle to maintain viability. This may result in pressures for short-term exploitation of available natural resources or less care and attention paid to the generation and management of waste.

The COVID-19 pandemic has had an impact on environmental outcomes. Economic activity has contracted in industries impacted by border closures, lockdowns and venue capacity restrictions, with an easing in economic growth and related environmental pressures. Travel restrictions and decreasing tourism have reduced impacts from transport- related carbon emissions, event waste and allowed the regeneration of surrounds at popular tourist sites.


Population growth is often seen as a pathway to promote economic growth and has been identified by the NSW Treasury as a key variable that underpins the outcomes for such growth. Over the past 40 years, population growth has been fairly stable with overseas migration a significant contributor to that growth. Due to ongoing COVID-19 border restrictions on immigration and access to NSW as an international education and working holiday destination, the state is predicted to record zero population growth in 2020–21 and -⁠0.1% in 2021–22, before returning to 1.2% by 2024–25 (see the Population topic).

Population growth has a direct effect on the economy and the environment with bigger populations consuming more goods and resources for food, clothing, housing, water, energy and transport and generating additional waste. However, not all the economic performance and growth stimulated by population growth is directly dependent on the throughput of natural resources.

Human capital is one of the most important inputs to the economy, converting labour into goods and increasingly services, with greater efficiency and productivity. Hence, population growth can stimulate economic growth through other pathways which have only an indirect or limited effect on the use of natural resources and the environment. The environmental impacts of growth will also vary depending on factors such as:

  • policy settings
  • technological progress and efficiencies
  • improved management of natural resources
  • changing social behaviours.

There is a stronger relationship between population growth and its environmental effects, than between economic growth and environmental effects. This is reflected in the observation that the economic growth rate is higher than the population growth rate. It is especially evident in comparing the per dollar trends to the per capita trends for emissions and energy use described earlier in this topic. The relationships between population and a range of other measures of environmental pressure, such as transport use, urban water consumption, energy consumption and waste generated, are described elsewhere in this report and summarised in Figure 1.4 in the Population topic.

Climate change

Both mitigation and adaptation responses are required to address climate change. It is important to act quickly to both reduce greenhouse gas emissions and adapt to the climate impacts that are already occurring and which are forecast to increase in frequency and severity. The earlier that mitigation action is taken, the less adaptation will be required later. However, for mitigation to be effective, concerted action is needed at the global level.

Major economic analyses commissioned by governments – Stern 2007 and Garnaut 2008 – have recommended prompt action to mitigate emissions. Their work is supported by findings that effective mitigation could be achieved at a cost that would be justified based on the estimated future costs of climate impacts under business-as-usual scenarios, provided such mitigation action is part of coordinated international action (Commonwealth of Australia 2008). Deloitte Access Economics (2020) estimated that unchecked climate change could reduce Australian GDP by 6% or $3.4 trillion by 2070.

The likely future, and potentially substantial, costs of climate change will include the costs of disaster relief, reconstruction and clean-up, lost production and the rebuilding of infrastructure following extreme weather events, coastal erosion, bushfires and health and wellbeing. These costs are all likely to become more significant in the future, due to the more frequent and intense effects of climate change (see the Climate change topic).

A report for the Australian Business Roundtable for Disaster Resilience and Safer Communities (⁠Deloitte Access Economics 2017) estimated the average total cost of natural disasters in 2016 to be $18 billion per year for Australia and $3.6 billion per year for NSW based on climate conditions at the time. NSW Treasury projects that, under the increasing impact of climate change, the economic costs of natural disasters could rise to between $15.8 and $17.2 billion per year by 2061, up from $5.1 billion in 2020–21 (NSW Treasury 2021).

Various researchers, including Wagner & Weitzman (2015), have stressed the uncertainty involved in predicting the nature and extent of the future effects of climate change. This means that estimates of the costs of emission reductions are likely to be significantly more reliable than estimates of the damages from climate change and the costs of adaptation if emissions are not reduced significantly. Since worst-case outcomes would result in significantly harmful and costly outcomes to humanity and the environment, mitigation is seen from a risk-management perspective as comparable to taking out insurance against significant potential risks.

Insurance companies are increasingly factoring in the effects of climate change into their risk profiles. The Australian Prudential Regulation Authority advises insurance companies to assess, manage and disclose financial risks associated with climate change through voluntary frameworks such as recommendations by the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures. Moody’s includes a climate risk score in sovereign ratings because susceptibility to climate change and the increased incidence of natural disasters will weigh on productivity, economic growth and fiscal resources and thus impact credit profiles. The Centre for Sustainable Finance (2020) recommends that governments climate-proof their operations to avoid a worsening spiral of climate vulnerability and increasing debt.


Legislation and policies

It is a legislative requirement of the Subordinate Legislation Act 1989 that all new regulations in NSW undergo a Regulatory Impact Assessment, including cost-benefit analysis. This is to ensure that the regulatory options adopted deliver the greatest net benefits to society. When environmental regulations and standards are developed, they should have well-defined objectives and consider the cost of compliance and administration to industry and government as well as the economic, social and environmental benefits to the broader community.


NSW Environmental-Economic Accounts

Nationally and in NSW, the development of harmonised waste accounts has been identified as a priority for environmental-economic accounts. Waste accounts will enable monitoring of flows of waste to landfill and recycling and help to inform management and planning for waste and resource recovery. To this end, the ABS has recently released Waste Account-Australia Experimental Estimates for the 2018–19 financial year (ABS 2020b). NSW is exploring the development of state-level accounts with the ABS. ABS has published a pilot state waste account methodology statement in consultation with NSW and further exploration for developing the account is needed.

Market-based mechanisms

A range of economic instruments has been developed in NSW to provide market signals to achieve environmental outcomes, including:

These are described in greater detail earlier in this topic.

Return and Earn container deposit scheme

The NSW Government launched the NSW Container Deposit Scheme Return and Earn in December 2017 as the largest litter reduction initiative introduced in NSW.

The scheme addresses beverage container litter by providing an incentive for consumers to return their empty drink containers for a 10-cent refund. It also provides an incentive for others to pick up littered containers and obtain the refund for their efforts.

In the three years since commencement, the Return and Earn redemption rate continues to rise annually and has resulted in:

  • 5.94 billion containers returned through the network (December 2017–Aug 2021)
  • over 2.04 billion containers returned from kerbside recycling (December 2017–June 2021)
  • more than 595,500 tonnes of materials recycled (December 2017–June 2021)
  • a 52% reduction in drink container litter
  • a 63% redemption rate (December 2017–June 2021).

Alongside the positive environmental impacts of reduced litter and greater recycling, Return and Earn has delivered economic and community benefits including placing more than $570 million in refunds back in the hands of the community. The scheme has also become an important fundraising channel for many not-for-profits with over $24 million raised for charities and community groups via donations and fees from hosting returns points.