Climate Change (Emissions Trading and Renewable Preference) Bill

I rise in opposition to Part 2 of the Climate Change (Emissions Trading and Renewable Preference) Bill, just as I did to Part 1, and I do so on a number of grounds. First, I want to pick up on the parting comments of the co-leader of the Green Party, when she said the agricultural sector had been excluded from this bill. I just could not believe what I heard. I think what she meant was that it does not take effect on agriculture until 2013. But what she forgets in that discussion and in that debate is that the agricultural sector is one of the biggest users of energy in this country: of electricity, fossil fuels, and many, many other types of energy affected by the passing of this legislation today, if in fact that happens. I am speaking on behalf of those industries now.

The forestry industry, for example, has a huge opportunity to develop co-generation on site at the various processing sites around the country, but it has been denied that opportunity under the leadership of this Government over 9 years, because the kind of development it proposes would never get through the Resource Management Act. Now the Government is to put in place this legislation, which offers another imposition on those industries that want to develop electricity generation. I am talking specifically to Part 2, because I would have thought that in this bill there could be some amendments to take account of that very fact.

The irony is that the forestry sector has the opportunity, like no other industry has, to actually achieve the goals that the Government states are its objectives in this legislation. The first, of course, is growth, because the forestry industry is the third-largest exporting industry in this country, and, secondly, it has a carbon sink value that no other industry has, or has the capability to achieve.

But what have we seen? Let us have a look at what has happened under the term of this Government. We have seen deforestation on a scale that we have not seen for a long time. From 1951 until 2003 New Zealand built up a forestry resource of 1.9 million hectares of trees. That is what happened during that period. Under successive Governments, Labour and National—although if one looks at the figures, one will find that the forestry sector grew much more strongly under National than it did under Labour—the forestry sector grew throughout that time to a massive resource of 1.9 million hectares. In 2006, 12,900 hectares were cleared, with no intention of being replanted. There are no intentions at this stage, unless there is a major change in policy, for that land to be replanted. Clear-felling has peaked at 13,600 hectares, which is the latest figure I have of clear-felled forest that will not be replanted.

I want the Minister in the chair, the Hon David Parker to stand up tonight and tell us how that is going to be addressed in this bill, because the single best thing that could happen in terms of climate change policy in this country would be to reverse that trend and get those trees planted again. The Minister has no answers. We have asked that question over and over tonight, and there is no answer to it.

I notice that the Chairperson is indicating that I should come back to Part 2 of the bill.

The CHAIRPERSON (H V Ross Robertson): Amendments to the Electricity Act.

Well, in new Part 6A, inserted by clause 67 of the bill, section 62A, “Purpose of this Part”, states: “… to reduce the impact of fossil-fuelled thermal electricity generation on climate change by creating a preference for renewable electricity generation”. I talked tonight about the co-generation plans of the forestry sector that are completely renewable, but this Government has stopped that development from taking place. So why does the Minister not take a call and explain to us why at least five or six major players out there that wish to invest in major processing in New Zealand, and another five or six that have looked at doing so, have been denied that opportunity? When they look at the amount of compliance that they would have to meet—and here is another layer of compliance right here in this bill that they will have to meet—they have said things are just too tough, so they are going to Australia. They do not want to do it here, because things are better for them in Australia than they are in New Zealand.

There is little doubt in my mind that this part of the bill was very much an afterthought, and it is interesting to note that the line “10-year moratorium on new” thermal baseload is now altered to read “10-year restriction on new baseload fossil-fuelled thermal electricity generation capacity”. I have no doubt that the harsh reality of our current electricity difficulties have impacted on the Minister and have encouraged him to require this particular change.

This year we have had an extraordinary sort of year as far as reliance on renewable sources is concerned, with the low lake levels, and it has meant that at times up to 50 percent of the electricity consumed by New Zealanders has been generated from thermal plant at various points around the North Island. The likelihood of there being a continuing problem, with lake levels not meeting expectation or, effectively, storage running out too quickly, and of that situation continuing for some years is, I think, very, very high.

The other question that we would have to ask is why we would ban thermal fossil-fuelled generation completely, as was the Government’s first intention, and then have so many out clauses for the possibility of that generation being granted approval by the Government. I think one of the reasons is that it just makes good sense to take the worst of our fossil-fuelled plants out of service and replace them with other plants that can not only fire up very quickly but also make greater use of the energy fed into them in the first place.

If one were to look at the e3p plant at Huntly, which is fed by electricity and is a three-stage electrical generation plant, then it is an extremely good—

💬 Hon Trevor Mallard: It is fed by gas.

That is right, I say to Mr Mallard—well done! It is fed by gas, that is right. And if the member took off the cloth ears, he would know that I said it is much more efficient at using the energy fed into it. I tell Mr Mallard that gas, when it is burnt, is energy. That poor fellow indicates to us why the Labour caucus has been so compliant in allowing the Minister to get away with the sort of nonsense represented in this particular part of the bill.

Let us look for a minute at what would happen if the electricity industry was encouraged to replace the capacity of the Huntly coal-fired plant with gas as a fuel source. Over a very short period of time New Zealand’s emissions from the electricity sector would substantially reduce. It would have the same amount of output, yet it would have a much, much reduced carbon dioxide emission. I see the Minister of Finance over there saying: “Ah, the member has got it.” Because that would be new, that is banned. Replacement is not banned. Oh no, those members are shaking their heads again.

What we are finding is that this is a policy on the hoof type of deal. Those members do not want to tell New Zealanders that, or want to say that if our electricity demand continues to grow at its current rate, if we ban the use of fossil fuels and new plants, and if we rely entirely on the wind always blowing, the rivers always flowing, or the lakes always filling, then we will have more years of the sort we have had just at the moment. Interestingly, I tell Mr Parker that no one in the industry would disagree with that. Everyone says that if we want to have the opportunity to get anywhere near the 90 percent renewable target, then it will have to be backed up by good thermal capacity for those days when the weather lets us down.

So I would like a bit of clarification from the Minister in the chair, the Hon David Parker, as to how, if he were the Minister of Energy, he would exercise his opportunities under section 62F, which is to be inserted in the Electricity Act by clause 67. This part of the bill states that the Minister of Energy can grant an exemption from what is effectively a ban—although in this bill it is now called a moratorium—with all sorts of outs in it. If the Minister is able to indicate to the Committee why he thinks this makes the whole ban, or moratorium, more palatable to the industry, then we would be very interested to know.

No area of public policy around climate change is as big a mess as what we have in respect of thermal generation. Let us just look at the Government’s own record over the last 9 years. Despite all the talk of increasing the amount of renewable electricity, every year that Labour has been in office we have actually seen a decrease in the amount of renewable electricity. When Labour became the Government it was 72 percent of New Zealand’s electricity. Last year it got down to just 66 percent. The latest prediction for this year is that it will be as low as 56 percent. Why on earth should anybody believe that this Government will get to 90 percent renewables when it has been going backwards for 9 years?

Then there is the absolute contradiction in public policy. The Government came along in 2002 and used public money to build the new Whirinaki diesel power station. This Government is supposedly the carbon neutral world leader on global warming, and it is spending our money building a dirty, great, fat diesel power station. A few years down the track it actually provided a Government guarantee to build the biggest new thermal generator since Huntly was built. Now, is it not extraordinary that it would do that and then, 6 months later, put a ban in place? One minute the Government is intervening in the market to build more thermal electricity, and the next minute it does a backward flip and puts a ban in place. That is the sort of mixed bag of confused public policy that has got the New Zealand electricity sector into the awful mess that it is in, and it has seen greenhouse gas emissions, from that one sector where one actually can do something about it, grow faster than ever.

Then we have the botched provisions of this bill. David Parker talks about the importance of market instruments—getting a price on carbon—and the moment he has got a bill to do it, he says: “Oh, I don’t trust the market. I’ve got to slap some regulations in there, as well.” We say he is mistaken. We say it is confused, and the overwhelming evidence to the Finance and Expenditure Committee was that it is confused. The Minister talks about it being a ban; it is a Clayton’s ban. There are so many outs in this ban that it is exactly what Business New Zealand has today said it is—cynical politics and a political circus. It has said that there has been no listening, and that these latest politically driven changes will mean the scheme and this bill will not work.

This bill is not about what is best for New Zealand. It is not about what is best for the environment or about New Zealand doing the responsible thing. This bill is about crude, simple, Labour Party branding. The branding of the Labour Party is far more important, it seems, than the interests of New Zealand. What National has said—and we said it in our document A Bluegreen Vision for New Zealand over 2 years ago—is that we want to get a market price through an emissions trading scheme and then let that market operate—but it is just nuts, just foolish, to then extra-regulate.

I put it to the Minister in the chair, David Parker, this way. During this Government’s term the amount of electricity produced from coal has trebled. I tell members that during the 1990s the Huntly power station operated for an average of 2 hours and 20 minutes per day, and under this Government it has operated on average for 8 hours and 40 minutes per day. And the Government wonders why New Zealand’s greenhouse gas emissions have gone up by over 26 percent and we are miles away from meeting our Kyoto targets.

I simply say to any New Zealander who is concerned about climate change: “Look at the Government’s record.” It can pass all the silly legislation it likes, and it can build as many diesel or gas generators as it likes; its record is awful. This bill is poor public policy. We do not need all these extra instruments; what we need is a price on carbon. I know there are rumours all around that Dr Cullen has never supported this stupid thermal ban. We know that a large number of other Ministers do not support this policy.

Part 2 of the Climate Change (Emissions Trading and Renewable Preference) Bill amends the Electricity Act 1992 and inserts new Part 6A, which restricts new fossil-fuelled thermal electricity generating capacity. If we look at new section 62A in Part 6A, we see that the purpose is to create a preference for renewable electricity generation. I do not think anyone would have any problem with that, but it is the matter of how it is done. Section 62A also places a “10-year restriction on new baseload fossil-fuelled thermal electricity generation capacity, except where an exemption is appropriate”. That sounds very much like a New Zealand First reaction to any questions about donors—saying “yes”, then “no”. This legislation creates a number of exemptions to a policy, but I think it can be done in a number of other ways.

Everybody needs and understands the requirement for renewal electricity generation in our country. We have a proud history of being a renewable electricity generator, and previous generations of New Zealanders have invested heavily in hydro-electricity generation. That investment put us in a very good position, leading into this modern time when renewable energy has become such an issue of the day. That investment set New Zealand up in a very good position where we could have that “clean, green” image that we have portrayed around the world. Something that New Zealand probably needs to have a good, hard look at is how we make that renewable capacity in the future, because that is the real answer for our ability to deliver in this area. It is not an issue on which we can change our focus quickly; these are long-term goals, they take long-term investment, and they need to have Government support—not necessarily financially but certainly support in the concept of renewable electricity generation. I think we are seeing that in New Zealand at this time, just as we are seeing it worldwide.

Will Part 2 of this bill actually achieve the goal of achieving that renewable energy capacity? That is the question. National believes it will not. We say there are other ways and other mechanisms that will be more appropriate to achieve that goal. New Zealand definitely has to move in that direction. With such a high percentage of renewable energy available, we have an opportunity to get back to the even higher percentage that we had in many past generations. That is something that would achieve our goals long term as a country. This legislation, which we are debating today under such strict time conditions, does not give New Zealanders the ability to look at those options and discuss them. This legislation is being debated for the reasons of political expediency. It is being passed as part of the scorched earth policy of the Labour Government in its last weeks in office. It is being passed in an attempt to kick the guts of the New Zealand heart of agricultural and industrial growth. It is being passed at a time when New Zealanders are struggling financially, and the implications of this legislation on the budgets of ordinary Kiwis are yet to be seen. Many New Zealanders will pay the consequences of this legislation in the future, and at a time when they can least afford to do so. New Zealanders are in a very dire predicament at the moment. We have a recession, we have a Government that has no intention of lifting us out of recession, we have high interest rates, and we have high fuel costs and high primary costs of production for raw materials and foodstuffs. To put more costs on to New Zealanders at a time when they are struggling is something that is not in their best interests.

However, we must also address the issue of climate change, and we must address the issue of renewable energy and electricity generation. There are better ways of doing that than this bill. This bill is a sort of last-minute reprieve by the Labour Government in its dealings with some of the minor parties. It does not show a lot of confidence in the political system. It does not show a measure of dedication to get the debate going or to have constructive ideas. There is no need to pass the biggest piece of legislation this Parliament will have seen this term, in the last week of the term of the Parliament. There has to be an opportunity for debate, for people to put forward new and constructive ideas. There has to be an opportunity for some compromise in legislation like this, as we move forward and deal with these issues. We cannot have a Government and political party supporting it that are passing legislation just on a whim, just on what they feel will look good on a piece of paper, without actually reflecting on the detail of it or reflecting on what it could mean for New Zealanders in the long term, and also reflecting on what it means to the country as we try to promote renewable electricity generation in the future. So we have some major problems with Part 2. It is something that has not been thought through by this Government.

I appreciate the opportunity to take a call on Part 2. I want to pick up on a comment of my colleague Dr Nick Smith that National certainly supports the 90 percent renewable energy target, but, of course—and it will not be a surprise—we would have a different method of reaching that target. I must say that this is an area in which the Government’s climate change policies have failed.

I ask the Minister in the chair, David Parker, to clarify this particular issue. From our point of view it seems that the Government’s interventions in the electricity industry have been contradictory. I challenge the Minister to stand up and refute that. Far from moving New Zealand towards the goal of 90 percent renewables, which I think was the Government’s aim, the proportion has fallen—

💬 Hon Annette King: An estimation.

It might have been an estimation, as my colleague says, but if I recall correctly, the Government put it forward as a definite aim. Whether it was an aim or estimation, the Government has failed. Far from the Government moving New Zealand towards the goal of 90 percent renewables, the proportion has fallen from 72 percent in 1999 to 66 percent in 2007. That is a long way, after 9 years, from 90 percent. I did not have the opportunity to sit on the select committee considering this bill. I would like the Minister to take a call to explain why, with all the Government’s trumpeting, hurrahing, and what have you over these last three terms, it has failed dismally in that respect.

The Government’s interventions have been contradictory. Renewable developments, like Project Aqua and the Dobson hydro project, were stopped by Government decisions. Thermal projects, like the new oil-powered Whirinaki power station, have been directly funded by a consumer levy, and the massive new 385-megawatt e3p combined-cycle gas turbine built by Genesis was, unusually, underwritten by the Government. Of the new generation built by this Government, 75 percent has been thermal. So the moratorium proposed here represents a radical shift in policy. How long is the moratorium for?

💬 David Bennett: 10 years.

That is an eternity, frankly, given the way that things are moving, particularly in an area where we want to take the lead. We certainly have a record of doing that, on a number of important things. It would seem that, on this issue, we might at least have waited to see what Australia does with its emissions trading scheme, but, no, this Government wants to push us out in front, with no proper structures at all being proposed. Am I right in saying that the Government proposed to put off the scheme for 2 years in order to design it properly? Maybe not. In any event, after 9 years the Government, fewer than 2 months before the end of its third term, is pushing it through. It is not being done under urgency—although I am sure the Government would like to do that—because the Greens, I understand, would not allow it to happen, even though they are supporting the bill. There are 785 amendments. That is nearly unconstitutional, quite frankly, I say to the Minister. He should hang his head in shame. [Interruption] I certainly was a Minister, but I was never as arrogant as that.

National Party members have a concern about security of supply. Many submitters from the industry, I understand, believe that the moratorium will put security of supply in jeopardy. We can see why that would be. If we put a moratorium on something, people do not know where they stand. Things tend to come to a bit of a standstill, the Government hums and ha’s, and those who would make the investment do not know where they stand. The second concern is the effectiveness of the moratorium. It is a very blunt instrument, as most moratoriums are, and it does not seem to be part of any coherent policy.

The member says that if we put a moratorium on generation, people do not know where they stand. Actually, the reason we do that is precisely so people do know where they stand and we have some clarity about the future. There are three issues that we need to deal with here, and I want to cover all of them briefly. Firstly, can we maintain security of supply while building only renewable power stations? Secondly, why will just putting a price on carbon not achieve that all by itself, without any further action? Thirdly, if we do want to do it, will this legislation achieve that purpose?

I will start with the question of security. The Energy Efficiency and Conservation Authority and the Ministry for Economic Development modelled very carefully how far we could get with renewable energy before price and security started to be compromised. The clear end point was 90 percent. We could do 90 percent with very little effect on the electricity price, because there are a lot of low-cost renewables available, and we could do 90 percent without compromising security of supply. If we simply look at what is being built at the moment, we see that we have 4,000 megawatts of electricity capacity under construction, consented to and about to start, or in the consenting process. That is a huge amount of new capacity, and all of it is renewable. Large parts of it are geothermal, which are baseload and are more reliable than any of the other technologies, including gas, and a considerable part of it is wind, which is backed up by our very reliable old hydro. Security of supply, once the Cook Strait cable is fully operating again, is simply not an issue. Actually, to the extent that the Cook Strait cable compromises security at the moment, that is not a matter that we can fix by building thermal power stations.

When we look at why we need this part at all, we have heard people say—and I know that Treasury is also of this view—that as long as there is a price on carbon we do not need any restriction. People will simply do what is cost-effective. Let us have a look at this. There are hundreds of millions, if not billions, of dollars of opportunity in the New Zealand economy to reduce energy consumption at less cost than the cost of buying it. But it does not happen. If a price is all we needed to incentivise action, why is it that for the whole of my lifetime—and still—there have been huge opportunities for saving energy that cost nothing, but people still do not take them? In fact, it is well known in the international literature that a price on carbon is part of the equation, and the rest of it is what are called complementary measures, which in my view are the majority of the measures that we need. It is a mixture of information, regulation, codes, standards, and all the rest of it. Clearly, if we have an interest in building gas-fired power stations and we do not have a lot of expertise in geothermal deployment, and we happen also to be involved in drilling for gas, and there is a gas supply and gas consumption issue to resolve, then we are going to build gas-fired power stations, even if they are not the most economical thing to build. It might pay one’s company personally if it has interests in gas, but it will not be the most economical thing for the country. That is the sort of reason why we need a clear policy direction that from now on, until we get to 90 percent, we want to build only renewable electricity.

The real question, though, is whether Part 2 of this bill will achieve that. With that, I must say I have some problems. Part 2 states that we cannot connect a new baseload power station unless we meet one of this very long list of exemptions. I asked three different submitters at the select committee—two of them were power station owners—whether there is anything we could not build, under Part 2. They said: “No, that’s not the issue. The issue is it’s a nuisance to have to go and get consent to do it.” Three different submitters admitted that the exemptions in Part 2 are so great that we can actually build anything we like. So the Green Party tried to get them tightened up a little bit. We did have some success, at least around defining what is baseload and what is a peaking plant. We now have, in the bill as reported back, issues around the amount that a plant would run, its efficiency, and its start-up time, which define a peaking plant.

The section we could not make any progress with, and which is the out clause for Genesis, is new section 62G(1)(e), which says that if one is retiring some other fossil-fuelled plant then one can build a new one. Well, everybody knows that Huntly is a very old plant. Huntly is the biggest greenhouse gas emitter. Huntly will eventually be phased out, probably one unit at a time. It will probably be providing back-up or reserve capacity for quite a while but hardly running, and it will eventually be phased out all together. We have already built two gas-fired plants in this country on the promise that they would replace Huntly. The first one was the Taranaki combined-cycle power station, and everybody said it would improve greenhouse gas emissions because we would run efficient gas in Taranaki instead of coal at Huntly. Of course, we ran both. The next one was e3p on the same Huntly site. We were told that that would reduce emissions from the Huntly site because we would run the gas plant instead of the coal plant. What are we doing? We are running both—and flat out too, I must say. So let us not pretend, if Genesis builds a 500 megawatt plant—which would be the largest gas-fired plant in the country—up on the Kaipara in Rodney, that it will be doing it to back up Huntly on coal. It will only back up Huntly on coal either when it is told to or when coal gets so expensive that we cannot afford to run it any longer.

The section that says that as long as one is retiring some other plant, one can build a new one—new section 62G(1)(e)—will not take us to 90 percent renewable, because to get to 90 percent renewable we actually need to close down both Huntly and another existing gas-fired plant and not replace them, assuming the normal projections of growth and demand up to 2025. We can do it—the renewables are there, the renewables are cost-effective, and the renewables are being built. But if we let people come in and build thermal plants in the meantime, they will crowd those renewables out of the market. If there is a great, big, ugly gas-fired plant just sitting there waiting to run, nobody will build wind power plants and nobody will build geothermal power plants. We need to intervene in the market from time to time to make sure we send it in a direction that is economic for the country—secure for the country—but not necessarily in the private financial interests of whoever wants to build power stations.

The Green Party supports the renewable preference provisions. We are very sad that we were not able to tighten them up a great deal more than what is here now. We are sad that Genesis, when it came to the select committee, expressed an obvious intention to just go ahead and build the thing and run it anyway, and we hope that its shareholding Ministers will put the brakes on when it gets to that point.

I am pleased to speak to Part 2 of the Climate Change (Emissions Trading and Renewable Preference) Bill, which includes the moratorium—what is now being called a restriction. Last winter I urged many people to go out and get back-up energy systems because of a potential shortage of energy going to their households. I suggested they get gas back-up and lighting back-up, and make sure they were prepared. I thought it was hugely important that, particularly, our over-65s were ready for an energy shortage. We are concerned about a potential lack of energy for domestic users in this country—not taking into account a lack of the energy required for business use.

Let us look at what is happening with the moratorium. The Government’s climate change policies have failed the electricity sector. Far from the Government moving New Zealand towards the goal of 90 percent renewables, the proportion has fallen from 72 percent in 1999 to 66 percent in 2007. That is an incredible indictment on the current Government, and particularly on a Minister in the front row, Michael Cullen. The Government’s interventions in the electricity industry have been contradictory. Oh, I am getting a little moue of the lips from him! Renewable developments like Project Aqua and the Dobson hydro project were stopped by Government decisions. The Dobson decision was an appalling decision on the part of the Government. That project was an absolutely viable concept, and it was well supported by all the community leaders and all of the community right across the board—but, no, not by this particular Government. A golden opportunity was lost for the sake of a bit of scrubby, gorse-covered Department of Conservation estate that the Government, incredibly, felt was worth protecting. The Government made the decision to can a project that everybody wanted, because it thought it knew best. That is pretty typical of the current Government.

Thermal projects like the new oil-powered Whirinaki power station have been directly funded by a consumer levy, and the massive new 385-megawatt e3p combined-cycle gas turbine built by Genesis was, unusually, underwritten by the Government. Of course, the current Minister of Finance, Dr Michael Cullen, thinks that is incredibly amusing. Of the new generation built by this Government, 75 percent has been thermal. So the moratorium proposed here actually represents a radical shift in policy.

National’s first concern is, of course, security of supply, and it was very much at risk over the last winter; hence the need to highlight to our over-65s the need for them to have back-up. I can tell members that I find quite astounding the number of over-65s at Grey Power meetings who tell me they had back-up systems and were prepared. That sent a signal that they do not have confidence in the current Government to provide for their energy needs, and feel they have to be prepared to provide their own energy. They took the initiative and they were resourceful. They had gas cookers and gas heaters, they stayed with relatives, and they had back-up lights so that they could see in the dark. They were well prepared. I was very, very impressed with our over-65s; they were not placing any confidence at all in the current Government to address their needs. When one sees the likes of this legislation with its moratorium on non-renewable energy resources, one can understand why.

The distinction in the bill between new power stations being either baseload or peak-load is nonsensical. Ironically, New Zealand’s biggest greenhouse gas emitter, the Huntly power station, was built as a peak-load station in 1987, and, technically, another could be built under the exemptions in this bill. National sees no place in New Zealand for any new coal-fired generation until such time as carbon sequestration technology becomes viable.

The smart way to provide an incentive for renewable energy over thermal generation is through the price signal of an emissions trading scheme. That is why we have consistently advocated that electricity be the first sector to be introduced to an emissions trading scheme. That would provide a signal every day to the electricity sector to favour renewables over thermal energy—and not just when building. It would avoid the artificial distinctions between peak-load and baseload stations. The emissions trading scheme would encourage substitution for more efficient thermal generation, where possible, and the earlier retirement of old, dirty technology.

It is worth noting that renewables generator Meridian Energy and the Parliamentary Commissioner for the Environment also rejected the moratorium. Perhaps the Minister should take note. National supports the target of 90 percent renewable energy.

I move, That the question be now put.

Mr Chairperson—

💬 Hon Member: This’ll be good!

Well, it will be good. I would like to comment on Jeanette Fitzsimons’ comments about the exemptions that are able to be made by the Minister of Energy. The fact is that this legislation, which was drafted by the Minister—at least, he is responsible for it—is incomprehensible. I refer members to new section 62G(1)(b) and (c) in new Part 6A, which is in clause 67: “(b) the specified generation plant, or the increased capacity referred to in section 62C(4), will be necessary for the purpose of mitigating the effects of an emergency (whether present or future); or c) the specified generation plant will be necessary for the purpose of forming”. What does that mean, I ask the Minister.

I now refer the Minister to new section 62G(1)(i): “in respect of which fossil fuels will provide less than a prescribed proportion of the total fuel energy input for the generator or generators constituting the plant in any”. This stuff is nonsensical. I do not believe that the Minister understands what that subparagraph means, or paragraph (e) below it, or new subsections (1A), (1B), and (2) below that. This is a long way from comprehensible plain language, which should apply to any legislation being passed in this House.

I suggest to the Minister that far from the Government moving New Zealand towards the goal of 90 percent renewables, the proportion has actually fallen from 72 percent in 1999 to 66 percent in 2007. The Government’s interventions in the electricity industry have surely, I say to the Minister, been contradictory. Renewable energy developments like Project Aqua and the Dobson hydro project were stopped by Government decisions.

💬 Hon Darren Hughes: Sandra’s just squawked that out already.

That is dead right—she has—and I am repeating it. I am asking the member to understand that we are very, very unhappy about the Climate Change (Emissions Trading and Renewable Preference) Bill.

Of the new energy generation being built by this Government, 75 percent has been thermal. So the Government is suggesting here, theoretically, a radical change in policy.

The distinction in this bill between new power stations being either baseload or peak-load is nonsensical. Ironically, New Zealand’s biggest greenhouse gas emitter, the Huntly power station, was built as a peak-load station, as my colleagues have pointed out, and it was built in 1987.

💬 Hon Trevor Mallard: Seven of them.

The member has pointed out that we have another six of them, and the Government could build another one without any difficulty at all. The smart way to provide an incentive-based system for renewable energy over thermal generation is through the price signal of an emissions trading scheme. That is why National members have consistently advocated that the electricity sector should be the first sector to be introduced to an emissions trading scheme—not our farmers in the Wairarapa, not our foresters in the Wairarapa, and not our fishing people in the Wairarapa. The point of putting the electricity sector into an emissions trading scheme straight up is that it would provide a price signal to consumers and to the industry every day, every minute of the day. That would provide an incentive against further thermal electricity production, and would avoid the distinction between baseload stations and peak-load stations. The emissions trading scheme will encourage substitution for the more efficient thermal generation, and earlier retirement of old, dirty technology. I think it is noteworthy that renewable generator Meridian Energy and the Parliamentary Commissioner for the Environment have rejected the Government’s concept of a moratorium.

We in the National Party support the 90 percent renewable energy target. We have confidence that the pricing signal of the emissions trading scheme, as well as our proposed reforms of the Resource Management Act, will give impetus to new renewable energy generation, without any arbitrary or inefficient moratorium as proposed in this bill.

I think new section 62F, which enables the Minister to grant exemptions to this policy, is basically a down payment on future corruption, and I do not want to see it. I think a lot of work needs to be done on this legislation to turn it from gobbledegook into plain language so that ordinary people can understand it.

I move, That the question be now put.

I raise a point of order, Mr Chairperson. The Opposition has shown considerable tolerance. The Climate Change (Emissions Trading and Renewable Preference) Bill is the most important bill of the term of this Parliament. Today we have had over 785 amendments tabled by the Government—785 amendments—and it seems extraordinary to me that the Government is attempting closure motions on such a critical bill in the term of this Parliament. I ask you, in considering whether to allow this debate to continue, to consider both the importance of this bill and the fact that only this morning we received the amendments the Government has proposed.

Yet again we see the National Party misusing the point of order process. This is a non-debatable motion. You and you alone, Mr Chairperson, make the decision, and this side of the Chamber will be happy to abide by it whatever it may be.

The CHAIRPERSON (Hon Clem Simich): I thank the member for that. I myself could not quite see the connection with the quality of tolerance. But I will call one senior member, Dr Paul Hutchison.

It gives me considerable concern to speak on new Part 6A, inserted by clause 67, of the Climate Change (Emissions Trading and Renewable Preference) Bill, which has clearly been amended from its title of “Limitation on new fossil-fuelled thermal electricity generating capacity” to “Restriction on new fossil-fuelled thermal electricity generating capacity”. As my colleague the Hon Nick Smith pointed out just this afternoon in a motion to the House, it would have been sensible and responsible of this Government to send this bill back to the Finance and Expenditure Committee to undergo in-depth analysis and then a final return to Parliament.

I spoke on the first reading of this bill last year. I remember that it was the time prior to the Beijing Olympics. I totally remember something on the TV showing the spectre of Beijing immersed in smog, fog, and fossil fuel - generated particles, causing the workers on the “Bird’s Nest” stadium to have to wear breathing apparatus, and to be hardly able to go about their ordinary business. It was a spectre that demonstrated just how serious the whole issue of climate change and the response to it is.

It was with considerable hope that the National Party supported in its first reading the legislation we have before us, but it was with huge concern that I learnt that 1,000 amendments were put before the select committee by the Government. That demonstrates just how wrong the Government had it to start with. This afternoon, when the Government presented another 750 amendments, it showed how pathetically badly it has managed the process of this bill so far. How can it expect anyone in this Parliament to treat it, or this very important legislation, seriously when it treats the parliamentary process so lightly, recklessly, and irresponsibly.

New Part 6A refers to fossil-fuelled thermal electricity generating capacity. In my electorate of Port Waikato, which I am proud to represent, is the New Zealand Steel mill. It is directly responsible for about 1,200 jobs in the area, at an average of $90,000 each; and around New Zealand about 5,000 to 6,000 jobs are highly dependent on that steel mill. The thing about it is that it is world best practice, and in terms of its co-generation capacity it is also world best practice. Yet here we have a Labour Government trying to put every hurdle in the book in the way of the efficient, effective continuation of one of the best steel mills in the world—a steel mill where there is commitment to investing a further $2 billion over the next 10 years, including into a vanadium and titanium extraction component that will be very helpful for New Zealand.

We look at what is going on around the rest of the world. For instance, in Europe there is an exemption for steel mills. But this Labour Government’s hurried and pathetically poorly processed legislation may well mean that key strategic infrastructure for New Zealand, like our steel mill, will be forced to go offshore. What will that mean to emissions, greenhouse gases, on the world scene? It will only mean that they will go to places like China and India, where they will be increased.

I move, That the question be now put.