Climate Change Response (Emissions Trading and Other Matters) Amendment Bill

I move, That the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 17 October 2012, and that the committee have the authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): Order! Would members leaving the Chamber please show some courtesy to the member trying to address the business of the House.

—thank you, Mr Speaker—and to meet outside the Wellington region during a sitting of the House, despite Standing Orders 188, 190, and 191(1)(b) and (c).

The Climate Change Response (Emissions Trading and Other Matters) Amendment Bill includes major amendments to the New Zealand emissions trading scheme that the Government intends to make in response to the recommendations of the New Zealand Emissions Trading Scheme Review Panel in 2011, as well as international developments, and a number of technical and minor amendments that aim to improve the operational effectiveness of the emissions trading scheme. Although the Government has chosen not to implement all of the recommendations of the review panel, I do want to acknowledge the considerable work of the panel in framing the issues in a way that has helped the Government address the issues in question.

This bill will ensure that the emissions trading scheme effectively supports the Government’s economic growth priorities by keeping carbon costs at a level that is appropriate in the light of the current economic climate and other countries’ climate change actions. The amendments will mitigate the short-term costs for businesses and households, and will ensure that the emissions trading scheme is flexible enough to cater for a range of future international scenarios.

Let me briefly examine and outline the major changes to the bill. Existing transitional measures reducing the impact of the emissions trading scheme on households and businesses will be extended beyond 2012 without an end date, subject to a review in 2015. This will facilitate New Zealand’s ongoing economic recovery by ensuring that there will not be significant increases to emissions trading scheme - related costs for businesses and households until at least 2015.

The entry date for surrender obligations for biological emissions for agriculture will be deferred and will not be specified in primary legislation. The Government’s current intention is to re-examine in 2015 the entry date for surrender obligations for biological emissions from agriculture and the continuation of the transition phase.

The bill introduces offsetting for pre-1990 forestry in the emissions trading scheme. This will give owners of pre-1990 forest land more flexibility. This bill also introduces a power to allow auctioning within an overall cap on the supply of New Zealand Units—NZUs. Auctioning will mitigate the risk that New Zealand businesses would buy too many international units, and will give emissions trading scheme participants more certainty about supply of units in the scheme.

This bill makes a number of technical changes so that the scheme is more workable and flexible. For example, it improves the current treatment of the synthetic greenhouse gases sector in the emissions trading scheme. Equally, it removes deforestation liabilities where forest land cannot be re-established because a natural event prevents it. Some of these technical changes will also address issues arising from the interaction between the emissions trading scheme, multiple-owned Māori land, and the Te Ture Whenua Maori Act 1993.

Because of the complex nature of the emissions trading scheme, a couple of technical issues have arisen subsequent to consultations, which we believe do merit further consideration at the Finance and Expenditure Committee. The first relates to the very detailed and complex offsetting rules around pre-1990 forestry. The second relates to the Crown’s ability to manage its Kyoto Protocol obligation for the first commitment period. Further amendments to the Climate Change Response Act may be necessary to ensure that the Act can be certain to meet its first commitment period obligation in an efficient and effective manner by setting aside emission units required for that obligation now. If the committee considers that these issues do need to be addressed, then it may wish to make recommendations on the bill.

In conclusion, this bill will keep carbon costs in New Zealand at a level similar to the current level, which is appropriate in terms of the current economic climate and international progress. It will make sure that our businesses remain internationally competitive and that households are not weighed down by rising costs. I commend this bill to the House.

I think the Minister has forgotten why we are doing all this. He has talked a lot about carbon costs and the cost to business and a lot about the cost to industry. He has not talked at all about the cost to the environment and the cost to our planet of doing nothing. I think that the Government has completely forgotten why we have an emissions trading scheme in the first place.

Frankly, if this is the kind of legislation that we are going to be passing in this House we might as well get rid of it—because we do not have an emissions trading scheme. The emissions trading scheme we have in place is “all sectors, all gases”. That is how it was designed. It does not work if all sectors and all gases are not in the scheme, and when 50 percent of this country’s emissions, which come from the agricultural sector, are excluded from the scheme it simply does not work. We are seeing the impact in the forestry sector at the moment. We have a lot of carbon foresters who would like to be able to sell the units they get from growing their forests to someone, but half of the country’s emitters are not in the scheme. So the market for their credits is not there.

We are going to be facing massive liabilities in the future when, I believe, there will be a successor agreement to the Kyoto Protocol. When that will be I do not know, and I know that the Minister is part of those negotiations and has a decision to make very shortly as to whether we enter into the European second commitment period or whether we enter into a voluntary period with non-binding targets. That is a decision the Government has to make and we await that decision with bated breath. But the fact is that if we are not going to do this properly, then why are we putting everyone through the pain of doing it at all? This further undermines the scheme that Labour put in place when we were in Government. It further undermines any efforts—

💬 Jacqui Dean: Yeah.

Jacqui Dean is really pleased that we are not doing anything about climate change. She is really pleased that we are not taking our climate change commitments seriously. Does Jacqui Dean realise how much exporters in her electorate rely on our “clean, green” branding? Does she realise the value of that branding to this country? If she does, then she should be very concerned about legislation like this added on top of a pile of policies that are consistently undermining the very branding that we rely on to remain internationally competitive, as the Minister said in the first place.

That is one of my biggest concerns about this Government and about this piece of legislation. It is the “say one thing, do another” approach of the National Government. Government members go out there and they tout our “clean, green” and “100% Pure New Zealand” credentials. John Key, when he went on HARDtalk on the BBC when he was in the UK, got absolutely done over when some actual hard investigative journalistic questions were put to him about just how clean and green New Zealand really is—about just how clean and green New Zealand really is—and he could not answer the questions.

Labour members say we should actually start walking the talk and living that brand, rather than just paying lip-service to it, which is what the National Government is doing—which is what the National Government is doing. It has relied on an economic downturn to provide a reduction in the growth in emissions, but our emissions have continued to grow. When Minister Groser was asked at the Local Government and Environment Committee when New Zealand’s gross greenhouse gas emissions were projected to peak, he did not know. He had to come back to us, and the answer was never—the answer was never.

So instead of actually having a scheme in place that starts to reduce our gross greenhouse gas emissions, we do not. We have one that is going to allow them to continue to grow, and is not putting any carbon price at all on the very people we want to drive that behaviour change—the very people we want to drive the behaviour change that we need if we are going to, one, actually take our commitments seriously internationally in terms of global climate change, and, two, protect the very brand that has been built up over decades. I will tell you what: reputations are hard-earned, but they are very, very quickly lost. This National Government, with its single-minded focus on oil and gas exploration whilst putting in no support for low-carbon or renewable technologies, now with pieces of legislation like this is doing a very good job of undermining our brand, which is so important to our economy.

I want to give an example of the kind of “do as I say, not as I do” contradictory statements that we are getting out of the National Government. Minister Groser is very, very keen on promoting his involvement in the scheme of a group called the Friends of Fossil Fuel Subsidy Reform. This is a group that has very, very laudable objectives, which are to go around this country and to talk to countries that have subsidies in place for high-carbon industries and for fossil fuels about the benefits of getting rid of those subsidies, which are often costly to the Governments that provide them and also very, very costly to the environment.

If you go to the Ministry of Foreign Affairs and Trade website, there is a whole page on this particular scheme. It is all very grandiose, it has got quotes in big fonts, and it is on a very appropriately environmentally friendly green background. The quote from Minister Groser is this: “It is completely incoherent for the world to be tentatively coordinating actions to put a price on carbon, while simultaneously massively subsidising consumption of carbon”. Agreed. It is a very good quote. So why, then, Minister, are you introducing a piece of legislation into the House that entrenches for perpetuity, for ever, subsidies that come from emitters of carbon? We have this one-for-two surrender obligation, which the Government put in place after the last election, where basically for every 2 tonnes that are emitted, the emitters have to surrender only one unit instead of two—so that has halved their costs.

The review panel, which the Minister referred to, said that that should be phased out and gotten rid of because it is expensive. Instead of doing that, the Minister, who goes around the world telling other countries that we should not have these subsidies, has just entrenched them in legislation for ever—for ever. It says “maintain the 1-for-2 surrender obligation after 2012, without specifying an end date in legislation:”. Not only that but also the Government subsidises and has tax credits for oil and gas exploration, for people who want to engage in that activity. As I said, there is nothing for those who work in the renewables area, in terms of that kind of assistance. Again, how can the Minister hold his head up high and go preaching to other countries that they should get rid of subsidies for fossil fuel extraction and for fossil fuel subsidisation, when we are doing exactly the same thing in New Zealand? It is this kind of activity, it this kind of contradictory behaviour, that does New Zealand no favours on the international stage.

I have talked to a number of people recently who have said that New Zealand’s standing internationally has declined dramatically since this Government took over, and that is something we should be concerned about. National used to accuse us when we were in Government of being world leaders in climate change. We thought, yes, we were trying to take a stand and that we were trying to be principled on this. John Key, when he was elected, said: “We are not going to be world leaders, but let us be fast followers.” He said we will be fast followers instead. Well, what we have actually become is apathetic spectators—that is what we are. We are standing on the sideline, waiting for Australia to do something, so then we might or might not decide what to do. And it has been noticed that for New Zealand, the clean, green country at the bottom of the world, which people respect and look up to internationally, our reputation is in sharp, sharp decline. Members of this House should not be in any doubt about how dangerous that is to our economy.

I want to come back to the issue of agriculture. The Minister could have done something very simple. If the issue with agriculture is price, the cost to farmers, and not the principle of bringing agriculture into the scheme, which is what we are always told, then he should bring them in but not put any price obligation on them. Bring them into the scheme so that they are in the scheme and they know that in the future they will face a price cost. Why can they not come in? The Government can subsidise them 100 percent if that is what it decides. We would not agree with that, but that is what it could do. I remember that back in 2009, John Key was telling the agricultural sector that it had to come into the scheme or risk the loss of export markets. He was quite adamant. He said that the cost to agriculture would be about $300,000 a year, and that was when the carbon price was much higher. It is very low now. The cost would actually be minimal to bring some of these people in. You could argue that this is a good time to bring people in, if they are worried about the cost.

I want to raise one very important point, which is that I do not think you will find a single farmer who will say that getting rid of the subsidies in the 1980s was a bad idea. They hated it at the time. They absolutely hated it, but they had to then become innovative and responsive. They had to respond to market signals. They had to respond to consumer demands. They had to be aware internationally of what was going on. That is what has made our farmers the best in the world. That is what has made them the most innovative. They have not been shielded from these kinds of market signals. So I am stunned as to why the agricultural sector and the National Government would now argue that we should bring back subsidies, that we should now blunt those market signals, and that we should now shield the agricultural sector from the very signals that in the past it has responded to phenomenally, which has made it the greatest farming industry in the world. I would like an answer to that question from the next National speaker. Thank you.

I would like to endorse the points made by the Minister for Climate Change Issues in his speech. National is committed to creating a cleaner, greener, brighter future for all New Zealanders. National believes that New Zealand, as a responsible international citizen, must do its fair share and act to reduce its greenhouse gas emissions.

The emissions trading scheme is driving investment in renewable energy, energy efficiency, and tree planting. By maintaining incentives to reducing emissions, without loading costs on households and businesses, our emissions trading scheme is helping to contribute to a stronger and more productive economy. These changes reflect the balanced approach the National-led Government is taking towards reducing greenhouse gas emissions. The purpose of these changes is to maintain the costs that the emissions trading scheme places on the economy at current levels.

The Climate Change Response (Emissions Trading and Other Matters) Amendment Bill also makes a number of changes designed to improve the operation of the emissions trading scheme. This will provide more flexibility and ensure that the scheme is fit for purpose after 2012. As outlined by the Minister, the main provisions of this bill include keeping the one-for-two obligation in place until after this year. This means participants in this scheme will continue to surrender units for half the carbon they emit. Other provisions include maintaining the $25 fixed price option until at least 2015, which caps the price firms will face if carbon prices begin to rise internationally; introducing offsetting for pre-1990 forest land owners; and allocating the full second tranche of compensation where offsetting is not taken. We are leaving agricultural emissions out of the emissions trading scheme until at least 2015, and reviewing the emissions trading scheme in 2015.

The bill provides much greater certainty for businesses. This is important because of the challenges the global economy continues to face, and the range of possible international climate change frameworks. The bill provides certainty to businesses in three key ways. Firstly, businesses will not face additional costs due to the continuation of the transition phase measures. Secondly, businesses will continue to be able to meet the emissions trading scheme obligations by surrendering international units. This will mean the price of domestic emission units will continue to reflect the prevailing price of international units. Thirdly, the amendments ensure that future reviews of the emissions trading scheme happen only as and when necessary. This should also reduce the concerns about emissions trading scheme review fatigue that have been expressed by some.

I commend the work and leadership of Minister Groser on what is a balanced and responsible approach. This Government is not willing to heap further costs on households and businesses, but we are committed to doing our fair share.

That last speech came from Mr Bridges, who I think is probably stronger when he is doing agricultural vehicles. I think he is probably stronger when he is talking about them. To finish his speech by talking about a fair system and a system that is going to help New Zealand’s reputation is unbelievable coming from that Minister.

I want to start my contribution by referring to the climate change issues Minister’s announcement during his speech that the report-back date for this bill is to be 17 October—17 October. That is just how seriously the Government treats this issue and the views of New Zealanders and the people who will be affected by the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill—rush it through, get it back here on 17 October, and not have a proper select committee process, a proper analysis, a proper opportunity for New Zealanders to comment on this. The Government is doing that because the transitional period runs out—December is coming upon us—and there need to be decisions made. That is the fault of this Government. That is the fault of this Government for not getting this legislation to the House earlier to allow a proper process, so that people can actually—

💬 Paul Goldsmith: So you want to take the farmers’ prices they’re paying, do you?

What is that sorry, Mr Goldsmith? Oh! He suddenly is very quiet—suddenly very quiet. He is suddenly very quiet because he knows that it is taxpayers in New Zealand who bear the brunt of the fact that polluters are let off the hook. Yes, right, the good people of Epsom are sitting there today knowing that Mr Goldsmith is prepared to subsidise polluters to carry on damaging New Zealand’s reputation overseas, and ultimately making New Zealand taxpayers pay and be responsible, because the Government has mucked around and not put a bill in front of this House at the time that it should have.

New Zealanders’ integrity on the issue of climate change and on our clean, green image is built on the fact that we are prepared to do our bit and that we are prepared to stand up as a country for the environment. Our credibility on climate change comes from the fact that we have an all-sectors, all-gases scheme. Step by step, since this Government has come into office, it has put that idea on the back-burner, it has put that off, and we now have an emissions trading scheme that, as my colleague Moana Mackay has said, we may as well not have, under the conditions that this Government is creating. It is a market mechanism with 50 percent of the market not even showing up. It is a joke for this Government to even call this an emissions trading scheme when half the market is not even there to participate in it.

But, moreover, there is the damage to our wider global brand. It is worth billions of dollars to New Zealand that we are seen as clean and green. We know that we can do better to meet the reality of that image in a number of sectors in a number of places in our country. But what we can definitely do globally is be able to say that we take our obligations seriously in the area of climate change. This Government is simply not doing that. What we have here is simply a delay into the never-never for two key elements of the emissions trading scheme. We have got the delay of the entry of agriculture. Let us be absolutely clear: this is not even a delay in the way that was recommended by the review panel. This is a delay indefinitely. There is no date set for the entry of agriculture into this scheme. So there goes the all-gases, all-sectors scheme in one hit. There is no date for agriculture’s entry into this scheme.

As Moana Mackey said, when subsidies were taken off agriculture in the 1980s, it hurt rural New Zealand. It was an incredibly difficult time. The rural sector, the agricultural sector, responded by becoming the most efficient agricultural sector in the world. That is what we have now managed to create.

We now have this Government saying that we should keep those subsidies on, while parading Mr Groser around the world at all of the conferences he goes to, claiming that he is in some Friends of Fossil Fuel Subsidy Reform group. I was actually very confused by that title, because I assumed that he was a friend of fossil fuels, but it turns out that the group actually has a different goal. But he is a friend of fossil fuels. What he is doing is subsidising now the polluters in New Zealand in a way that means New Zealand will be seen internationally as a friend of fossil fuels, not a friend of ending fossil fuels.

It is important to note that the extension of the one-for-two carbon credit subsidy really puts the nail in the coffin of New Zealand making an actual difference in the way that we reduce our carbon emissions. Let us be absolutely clear: for every one credit that is handed in, it counts as two. That is what happens here. So this bill does nothing to actually start reducing New Zealand’s carbon emissions. And as my colleague Moana Mackey again said, Tim Groser, at the Local Government and Environment Committee, could not tell us when emissions would peak, and that is because they are not going to because there is no actual effort to do that. Climate change is not some abstract policy. Climate change is about the protection of our environment.

I think the leadership on this issue from John Key is something that we should look at, because he told farmers in 2009 that they needed to get into the scheme to be able to make sure that they could be internationally competitive. But I am not sure that he is totally committed to it. We have to remember that John Key named George W Bush and John Howard as his mentors on climate change. That is what he said. He named them as his mentors on climate change. He actually said in the House, admittedly before he became our Prime Minister, that “even if one believes in global warming—and I am somewhat suspicious of it … we will see billions and billions of dollars poured into fixing something that we are not even sure is a problem.” That is what John Key told this House. So the Government is completely lacking leadership when it comes to the question of climate change. What Mr Key needs to face up to is that the Intergovernmental Panel on Climate Change—I think Mr Key might just call them “some scientists”, and he can find another scientist, but I think the Intergovernmental Panel on Climate Change has probably got something to say about this—has told us that the probability that climate change is natural is less than 5 percent, world temperatures are going to rise between 1.1 degrees and 6.4 degrees during the 21st century, sea levels will rise by 18 centimetres to 59 centimetres, and the level of greenhouse gases is higher than it has ever been, due to mankind.

Climate change is real. This bill tries to pretend that it is not. It tries to pretend that New Zealand can hide away from its responsibilities when it comes to addressing issues of climate change. But that has been the attitude of this Government from day one. The very first days that I spent in this House as an MP involved the National Government removing the Labour Party’s ban on baseload thermal generation, removing the subsidy on biofuels—

💬 Moana Mackey: No, the obligation on biofuels.

The obligation, sorry, not the subsidy—that is what they put in. It removed the obligation on biofuels, and subsequently in Budget after Budget it has not invested in public transport and not invested in schemes for clean energy. And in terms of the big drivers outside of agriculture in terms of energy and transport, not enough actual work is being done to say that we can reduce our emissions. So this Government is failing to introduce agriculture, as a sector, into this scheme and failing to undertake the work in the key areas of transport and energy that will actually make a difference to our emissions.

This bill fails completely in terms of New Zealand’s obligations under the Kyoto Protocol. But Mr Groser seems to think that we can simply sit back, and wait and see what happens at the international level. Once upon a time New Zealand was a leader in these things. I know how much Mr Groser likes to be a leader on the international stage. He loves it. He loves being in the green room, the white room, the blue room—any room that is going on at an international negotiation—and makes sure—

💬 Hon Parekura Horomia: The bathroom.

The bathroom, as Mr Horomia says—any room that is going on at a negotiation. This is the opportunity and the chance for Mr Groser to be a leader on climate change. We want New Zealand to be a leader, because it supports our brand and it supports our exporters. We do not want to be a fast follower, and, far worse, we do not want to be the spectator that this Government is making us become on climate change. There is huge opportunity for New Zealand to show leadership here. There is huge opportunity for exporters if we do. There is huge opportunity for people creating and promoting new technologies inside New Zealand if we get on board with this, especially in the agriculture sector. This bill is a giant missed opportunity and a huge step backwards for New Zealand in terms of climate change and our clean, green image.

The Green Party will vote against this bill, the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, on the grounds that it weakens an already weak emissions trading scheme to the point of irrelevance. The deliberate weakening of the emissions trading scheme reflects a fundamental misperception of the nature of the climate change challenge. The primary objective in the bill, as stated, is to “ensure that the emissions trading scheme more effectively supports the Government’s economic growth priorities”. This one sentence reveals the multiple errors in this Government’s flawed world view. It subordinates climate change to economic growth. It reflects a 20th century understanding of economic integrity. It implies that economic growth is the principal criterion of the quality of life. It asserts a narrow and myopic view of the nature of climate change.

To appreciate the way in which this trader Government has proceeded down the wrong path, we need simply to have regard to the global context. Let us be clear. Climate change is not just another tough problem today and a potential crisis tomorrow. It is part of an ecological crisis today. It is the first of the nine planetary boundaries we must stay within if human civilisation is to continue to flourish. It is 20 years now since we agreed to avoid excessive carbon concentration in the atmosphere that would cause dangerous anthropogenic interference with the climate system. It took 18 years to identify a 2-degree temperate rise and a 450-parts-per-million concentration as the limit for avoiding that danger.

The global carbon budget for the climate boundary is 1,600 billion tonnes of net greenhouse gas emissions for the period 1990 to 2100. In 20 years we have used almost half of that. The remaining budget from now to 2100 is 870 billion tonnes, about one-third of the remaining fossil fuel reserves. We have to learn to say no to fossil fuel extraction. Such a global budget allows future annual global emissions of 9.5 billion tonnes. This is 20 percent of current emissions, so the global emissions reduction curve will need to be steep if we are to avoid dangerous climate change. This requires global emissions to peak before 2020, and to drop by 8 percent in 2020 and by some 56 percent by 2050. The developed countries—the Global North—are required now to reduce their national emissions by about 35 percent by 2020 and 80 percent by 2050.

These are not matters of choice. This is not the stuff of currency speculation, dealing with toxic debt, or hedging risk through derivatives and futures trading. We do not hear breathless talk about such antics these days, yet the Government is still acting as if we have free choice over macroeconomic policy with the climate. This is not a matter of choice. Emissions reduction is an ecological imperative. Nature does not do deals, other than with itself, and certainly not with humanity. Nature is what it is. Human notions of choice will prove as ephemeral as a feather in an evolutionary storm if we court dangerous climate change, yet this is what we are doing.

The United Nations says the current global emission level of 48 billion tonnes needs to drop to 44 billion tonnes by 2020—some say to 36 billion tonnes—yet our voluntary pledges adopted at Cancun will see emissions rise to 50 billion tonnes, resulting in an emissions gap of 6 billion to 12 billion tonnes. Clearly, the international community is failing to prevent dangerous climate change.

So where does New Zealand stand? We are called upon to reduce national emissions by up to 40 percent by 2020 and 80 percent by 2050. What have we pledged? We have promised conditionally a mid-point of 15 percent by 2020 and 50 percent by 2050. It is simply not possible for New Zealand to achieve even these weak targets with the spineless market instrument it has fashioned for the purpose over these past 3 years. The 2020 mid-point of 15 percent means 51 million tonnes of net New Zealand emissions. The current projection for 2020 is 63 million tonnes, a reduction of 12 million tonnes within the next 8 years. For 2050, a 50 percent drop means 30 million tonnes, a reduction of 33 million tonnes from today.

These are significant reductions, yet they are nothing compared with what is required for the 2-degree boundary. An 80 percent reduction by 2050 would mean a drop from 63 million tonnes to 13 million tonnes. How might we conceivably achieve this? Not by the 2008 Labour emissions trading scheme, not by the weakened 2009 National emissions trading scheme, and certainly not by this limp legislative construct masquerading as a model of responsibility and balance that is before us today. Today’s bill will defer the inclusion of agriculture indefinitely, defer any increase in the price cap, defer the one-for-one surrender obligation, allow a greater switch from forestry to dairying, and enable importers to increasingly use dangerous synthetic gases. What remarkable, steel-like resolve!

We need a Green plan for achieving the scale of reduction required. When National was busy moralising about the impossibility of achieving a 40 percent reduction by 2020, the Green Party was compiling a practical plan to do just that. The document, titled Getting There, identifies opportunities for reducing emissions across all sectors, in ways that transcend the emissions trading scheme. These supplementary measures include 5 million tonnes off electricity, 2 million tonnes off industrial and manufacturing fuels, 5 millions tonnes off transport, 3 million tonnes off agriculture, and 22 million tonnes through enhanced forestry sinks. All up, this totals 36 million tonnes taken off domestic emissions in 2020. The remaining 12 million tonnes required to reach the 40 percent reduction would be met through the purchase of international credits.

National has been disposed to cast aspersion on our plan. This absolves it, it believes, of the need to develop a plan itself. Others have queried some of the details. That is fine. No doubt the details can be refined; we are dialoguing with experts as we go. The point is that the Green Party alone in this House has the foresight and the gumption to draft an ambitious and positive plan. It is possible to develop a plan for New Zealand that would allow us to achieve the national reductions required to do our fair share in avoiding dangerous climate change. The Green Party has prepared a draft.

National complains about the inability of New Zealand to achieve deeper cuts. Its reasons are twofold: first, we have a large agricultural sector whose emissions are hard to reduce; second, we have a high renewable portion of our electricity. This ignores the fact that both arguments are accommodated in the Kyoto allocations, so there is a limit to how often we can unveil this monument to inaction. It ignores the fact that comparable countries like Sweden and Ireland have reduced agricultural emissions by 10 percent and 7 percent whereas New Zealand has increased them by 16 percent. Here we are, trumpeting our determination to help the rest of the world reduce agricultural emissions through the Global Research Alliance on Agricultural Greenhouse Gases. I have nothing against the global research alliance, just do not use it as a smokescreen for inaction on agricultural reductions here that can be achieved now.

The amount of cant that National has injected into the climate change methodology is breathtaking. The difference between National and Green climate policy is driven by different underlying perceptions. National calibrates its policy in light of what other countries are doing. The Green Party calibrates its policy in light of what the science indicates is necessary. National then shapes its policy as a mechanism for deferring what it terms a financial burden on selected economic sectors. The Green Party shapes its policy as a societal opportunity to move to a high tech, low carbon, green economy.

National sows fear and loathing about future emissions scenarios of the Global South, with no acknowledgment of a historical responsibility or per capita differential. The Green Party acknowledges both historical and future responsibility. It embraces the need for contraction and convergence, and for international equity, and thereby global legitimacy, to evolve. Above all, the Green Party adopts ecological economics in its approach to macroeconomic planning and climate policy. This is a qualitative change from the traditional neo-liberal economics of National. We embrace a different cognitive framework from that of National. We have a different world view, and thus, employing the same logical reasoning we are all endowed with, we emerge with different policies. We shall oppose this bill, and when in Government, we shall introduce a vastly different and more effective Green climate policy. There is something new under the sun. It is imperative that we act now.

Hello? Hello? Have you heard what I have just heard? I have never listened to so much claptrap in this Parliament since the last century, when there were not any Green Party members in this Parliament because they could not get elected to this Parliament in the last century. They are here in this Parliament because they are on a party list in this Parliament. That member we have just heard from, Dr Kennedy Graham, would never get elected anywhere. I challenge him to stand in Epsom in 2014 and take his chances.

I think that this bill, the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, should be changed to the “Climate Change (Common-sense Emissions Trading and Other Matters) Amendment Bill”. After listening carefully to the bogeyman tirade from that Green list member of Parliament I could be forgiven if I went to the 11th floor of Bowen House and opened the window. That is how bad it was. Even if the Green Party ever got its hands on the lever of power, New Zealand emits 0.2 percent of global emissions. Can the Minister for Climate Change Issues confirm that? We could not influence the climate one way, or even another. I say to the American list member for the Green Party that if the USA put as much effort into climate change as this common-sense piece of amendment legislation this afternoon does, the world would be a better place. Is that true, Minister? [Interruption] The Minister says that it is true.

Most of the debate perpetrated by a Labour Government in a previous era and supported by New Zealand First—supported by New Zealand First—is humbug. That is why this Government has had to come in and tidy this up with an 80-page amendment bill that will minimise the worst costs of the emissions trading scheme on New Zealand families—the worst costs of the emissions trading scheme on New Zealand families, New Zealand farmers, New Zealand mum and dad businesses, and the New Zealand economy. But it will have negligible effect on the environment—negligible effect.

Not even the Greens campaigned in my electorate of Epsom on climate change in the election last year. The Green candidate whom the Green Party parachuted in from Ōtāhuhu or some other place did not ever raise climate change in any of the debates, because it was a dead duck issue in Epsom because the Epsom people know that most of the debate coming from the Greens is humbug. It is humbug. And the New Zealand First list MPs opposite—none of them elected—all those list MPs opposite, are responsible for this bill in the first place. Market research should tell the Labour Party and tell the Greens that this issue is a dead duck.

I am pleased to be supporting the emissions trading scheme amendment bill, because the emissions trading scheme is a monstrosity. It is a monstrosity, given that New Zealand emits 0.2 percent of global emissions. Even if the Labour Party wanted to, with the support of New Zealand First and any of the others in this Parliament—the bogeymen in this Parliament—it could not influence international climate change anyway.

So the conclusion is that the ACT Party supports this bill, at least to minimise the scheme’s worst effects on New Zealand business and households. We owe a great deal of debt, do we not, National Party colleagues, to the Hon John Boscawen and his tireless push-back of these bogeymen opposite: the Greens, New Zealand First, and the Labour Party. I have got to say that in a perfect world we would not be wasting the time of this Parliament—$6,000 a minute—changing an Act that never should have been a statute, and that never should have existed. Even the American list member for the Green Party will tell you that if America wants to lead in this, let America do it. And to the co-leader of the Green Party, the Australian member, if Australia wants to do something, do something sensible.

But the scheme is costing small business, small families, people stretched for cash, and the economy a lot of money, and this bill ameliorates that, and the Government is to be congratulated. I congratulate the young Minister in charge of this bill on the work that he has done on this. He has steered a very careful course, and my advice to him in the early days was “Get rid of the legislation, Minister, and do the country a favour.” But given that that is not politically correct, even on the centre-right of politics in this country—and I say to the leader of New Zealand First that I have learnt a few things since he wrote my first speech. But even if it did do something, this country cannot afford it.

I know that we are on the right track on this side of the House when there is howling and wailing from the Labour Party and from the Greens. Particularly when, before me, you heard that speech, which was better than Mogadon, from Dr Graham about what is going to happen and how the world is going to close in because of this bill. This bill is a recipe for common sense. The existing legislation should not exist in this economy at this time. We should be followers, not leaders—followers, not leaders—because it is too expensive for a country that is very stretched for cash.

And so let us hear from the Labour Party members what they would do if they were on this side of the House to help small business, to help the current account, to help the tradable sector, and to help the farmers. Do they deny the farmers the help that they need to keep this economy flowing?

Well, anyway, this is what I call the “Climate Change (Common-sense Emissions Trading) Amendment Bill”, which the ACT Party supports because it goes a little way to getting some common ground and common sense on this whole argument, laced in humbug and bogeymen, from the other side of Parliament.

Some people have 30 years of experience, and some people have 1 year’s experience 30 times over. I will leave it to you to decide which category we just heard from John Banks. But where is this place called “Oh-ta-huhu”? You know, there is a suburb in Auckland called Ōtāhuhu, but it is not “Oh-ta-huhu”. After all this time, in 2012, we really should be doing better than that. I want to say that, whether a believer or a sceptic, what matters to New Zealand as an export-dependent nation is how the world sees us on this issue, and, more particularly, what our international customers’ and markets’ perceptions are of this country. That means an irrational response to international concerns could cost New Zealand dearly.

But let us be honest. What you get in this Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, all 79 pages of it and its size and its complexity, leads you to conclude one word: Kafkaesque. This is the master of the absurd. Have a look at it—79 pages. This will keep an army of lawyers busy for years. Anybody in the legal profession or at Victoria University, Canterbury University, Auckland University, or Otago University law schools, be assured you have got a job, certainly, when you leave university, because if we have this sort of mishmash of nonsense, then it will be a lawyer’s lifeline. Whether it will help stop climate change is entirely doubtful. You have heard about the law of unintended consequences, and that law of unintended consequences comes through on every page. Climate change is happening, it is a serious issue, and New Zealand First is not in denial about it, but all strategies to address the climate change issue must be practical, fair, clearly understandable, and comprehensive. This emissions trading scheme as amended here falls well short on every count. Trying to patch up the emissions trading scheme is not the answer to climate change.

We maintain that the role of the State must be to strike a balance between economic progress and appropriate environmental goals. The climate change response debate is about where that balance should be and whether the emissions trading scheme is the best tool. Our policy, as we campaigned on with the last manifesto, is that we are against the emissions trading scheme in principle because it does not decrease emissions; it just moves them around to those economies that can afford to buy carbon credits. That is all it does. It does not decrease emissions; it just moves them around to those economies that can afford to buy more carbon credits. It is like making petrol more expensive instead of funding the technology to make cars that are more fuel-efficient, or making cars that do not use petrol in the first place. The emissions trading scheme devised by this Government is unsustainable. Adopting an approach of market forces on this issue will not work. The emissions trading scheme is just another tax on people and production.

I want to ask my friends in the Green Party: why have you gone for a scheme where all the capitalists get to run the whole show? How foolish can you be—to give it to a bunch of New York people to run. How silly is that? Will we be advantaged as a nation? No, we will not be. We do not subscribe to a Wall Street takeover of the environment and profiteering out of just one more distortion of market forces. Carbon credit banks that turn environmentalism into a speculative business is not the pathway for New Zealand. New Zealand First advocates that this serious issue be handled by Government and industry working together. Industry and agriculture would be far more cooperative with a fair domestic regulatory regime. Why are we paying a fortune to some other country? In this well-understood situation—

💬 Hon John Banks: Are you going to support it?

Look, we are not going to support what the ACT Party says. And fancy mentioning John Boscawen! Ha, ha! Boy, I have heard of a few John the Baptists, but not John Boscawen.

Back to my point: in this well-understood situation, and with many sustainable energy sources being available, negotiated performance standards, Government-assisted research and development, and a carbon tax incentive to change are much better options than the uncontrolled financial machinations of an emissions trading scheme, where there will be no opportunity for a long-term plan of managed change and improvement. The bottom line is it is going to cost about $2 billion - plus. That can be much better used to pay and repay debt. We are in need of a national understanding of the importance of climate change, but we say to those sceptics and cynics, your customers will decide what you do. You can take the arrogant attitude and you can forget about it, but if your customers internationally say “Sorry, we won’t deal with you.”, then you will change overnight.

We are against having a Wall Street - type of operation on this critical issue. It was all in the manifesto at the last election, and we did do—what—seven times better than the ACT Party, with no resources, no financial resources, and no man in a yellow jacket running around spending money like an eight-armed octopus. No, we did it all with a simple appeal to the ordinary people of this country, and if we had got a fair go, we would have hosed in. We all know that.

💬 Hon John Banks: Where are the real members?

Where are the real members? Well, I tell you what: we packed, in our opening, a hall of 800 people, and that party had a telephone booth for its launch. There were 800 at our meeting, and in its telephone booth—in fact, it was a disgrace.

I want to say something. One of the reasons that I personally pushed for and established the New Zealand embassy in Stockholm, Sweden, was that we have a lot to learn from the Scandinavians on these issues. They are light years ahead of us on the environment, and they are light years ahead of us in terms of economic performance. They have managed to do both, so I sought to establish a connection with the Scandinavian countries—all the four successful ones: Finland, Norway, Denmark, and Sweden—in the biggest city there, in Stockholm, and there we got under way with a lot to learn from them, and now they have the Government keeping on saying “Oh, look, Norway does this. Why don’t you people agree with that?”. But here is the point. In its petulance the Government shut it down—just got in and shut it down, all of a sudden. Now it mentions Scandinavia, like any port in a storm, on the issue of development because it suits it. And Mr Groser will know full well that whilst he might be travelling around the embassies, they cannot wait to put arsenic in his tea, or in that of the Minister of Foreign Affairs, because they are enraged at what is going on in that department. Scandinavian investment would have been very, very sound for this country, and when we get back, which will be very, very soon, we are going to re-establish the embassy.

💬 Hon John Banks: Ha, ha!

Oh, do not worry about that. I would not laugh. Mr Banks, the last person I would laugh at is New Zealand First, because our track record is to have been within one seat in nearly every election of either having the balance of power or holding the balance of power.

💬 Hon John Banks: I’ve got the balance of power.

Within one seat—within one seat. No, no. Mr Banks says he has got the balance of power. Look, a bought man is never going to have any power. A bought man is always powerless. When John Key says: “Jump.”, John Banks says: “How high?”. Where is the power in that? Where is the power in that? No, there is no excitement-filled majesty. It has actually destroyed the steel and the spirit of that ACT Party. It is on a rollercoaster to oblivion. I am so sad that Mr Banks decided that it was a good idea to come back to this Parliament, because it must be oh, so lonely—oh, so lonely.

💬 Hon John Banks: The caucus meetings are easy.

Now some of us—I know caucus meetings must be easy, but every now and again when you are rattling around the office all by yourself, you must think to yourself: “What on earth did I ever do coming back here? First of all, I am a bought man; second, I’ve got to do what I’m told; and, third, I have nothing to contribute any more because nobody in the country is interested in what the ACT Party has got to say.” On all three things—

💬 Hon John Banks: I’m here to keep you there, Winston.

—on all three things—that is a sad indictment.

But back to my point on this legislation. We are against a scheme where the operators of New York can use a critical issue like the environment to their personal advantage. I know why the ACT Party would support it, I know why the National Party would support it, but I have got no idea why anyone on this side of the House would support that. There is one party in this Parliament that knows what is going on, and we have set our mind against this because it is against our national interests and it does not advance the cause that it seeks to address in the first place. Thank you very much.

The irony of that contribution from New Zealand First is extraordinary when we look at the Hansard in September 2008, in the dying days of the Labour Government—and I see New Zealand First’s new MPs are looking on in interest. I challenge them to read the Hansard in September 2008. Far from championing against international instruments for dealing with climate change, the only reason the emissions trading scheme made it on to the books of the New Zealand legislator was the five votes recorded by New Zealand First to back Helen Clark’s bill at that time. That bill made broader instruments and had less control on international carbon units than the very bill we have before the House right now, the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, which actually puts greater restrictions on the use of those. I can only conclude that Alzheimer’s is taking hold far worse than I thought within the New Zealand First caucus, and I would just love Mr Peters to explain how it was that his decision to vote for that legislation was the only reason that an emission trading scheme made it on to the books.

I also want to contrast the contribution that was made by Labour, because in the 9 years that Labour was in Government it campaigned on New Zealand becoming carbon-neutral. Remember the carbon-neutral speeches? Remember every single bit of rhetoric we got in the House? I just want—

💬 Dr David Clark: And there was a plan.

Mr Clark, I think, from Dunedin says there was a plan. Well, there might have been, but let us talk about the results. When Labour came into Government in 1999, New Zealand’s emissions were 59 million tonnes per year. I would be interested to know how close it got to zero in its 9 years in Government. Well, it actually went from 59 million tonnes a year to over 70 million tonnes in its 9 years. In fact, the most interesting fact is this: New Zealand’s emissions during Labour’s years grew faster than those of any other OECD country. New Zealand’s emissions under Labour’s jurisdiction grew faster than those of any other developed country, and we on this side of the House will not take Labour seriously on climate change until we hear some apologies for its appalling track record.

The two factors that contribute to Labour’s record have both been turned round by this Government. The first is that New Zealand has greater opportunities around renewable energy than any other country, yet during Labour’s years, in each and every year, the proportion of our electricity that was produced by renewables dropped. I have to say I think this Government should be hugely encouraged that over our 4 years we have seen an increase in the proportion of renewables, and the figures that have just been published for 2011 show that it is at the highest level. For those who want to bag New Zealand’s record, I say let us be proud of the fact that New Zealand has a higher proportion of renewable electricity—levels that any European country would be jealous of—with only one exception, and that is Iceland.

The second point that was absolutely tragic in the Labour years was the huge levels of deforestation. In Labour’s years there was more deforestation than under any Government since the Great Depression—

💬 Dr David Clark: Before the emissions trading scheme.

—more deforestation. We have turned that round. The deforestation has stopped. The New Zealand forest area is growing, and that can attributed to the sensible climate change policies that this Government has been adopting.

I want to commend the work of Tim Groser. I say this quite honestly to members of the House: New Zealand has never had greater influence internationally around climate change negotiations than under Tim Groser’s leadership. Anybody in this country who recognises that on this global environmental issue what New Zealand does is quite small should be hugely proud of the contribution that Tim is making to those international negotiations. I have been privileged to be at a couple of those with him. The way in which he has been successfully getting the big players—the Indians, the Chinese, and the Americans—to make progress on this issue is something that, frankly, every New Zealander should, and, certainly, members of this side of the House do, take pride in.

On this issue New Zealand needs to take a balanced approach. That is one in which we are doing our fair share as a country but one where we are also realistic about the sort of pressure business and households are under. This bill does that. I look forward to working on the Finance and Expenditure Committee to ensure the detail of this complex issue is worked through, but I cannot tolerate some of the double standards that we have seen from both Labour and New Zealand First members in this debate.

I am happy to take a call on this Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. We have been sitting here on this side of the House hearing the members opposite chanting generic National Party lines about the brighter future and making business easier to do, and not a lot of substance on this bill, particularly from their second speaker, Simon Bridges. A lot of what we have heard today is, frankly, unbelievable, as my colleague Grant Robertson said. We have just heard from the last speaker, Nick Smith, about how emissions grew under Labour but shrank under National, and what a proud record National has in this area.

Let us actually look at this. Let us unpack this and let us look at some reality. What we have is an emissions trading scheme that Labour introduced at the end of its term, the bones of which National has been able to amend and reap the benefits of. But one of the real drivers of the drop in emissions under this Government is that this is a Government that has presided over a recession, and with a recession comes a drop in emissions. The members opposite should look to Russia. I know they have a problem with this part of the world—Gerry Brownlee certainly does—but they should look at Russia and the staggering drop in emissions that Russia has experienced, largely due to the fact that it is an economy in recession.

But this is a piece of legislation that is absolutely critical to us as a nation. It is a piece of legislation that is absolutely critical to our future, and I do not think it is being treated with the seriousness opposite that it deserves. This is a piece of legislation that is about New Zealand doing its bit as a global player and addressing one of the key issues of our time and of our generation.

We have the member for Epsom opposite who tells us that New Zealand is but a tiny contributor to this world problem, and challenges other nations to do it. Well, I am proud to stand in this House as an heir to the tradition of a party that has seen itself as internationalist—as a party that can make a difference. I look to forebears on this side of the House like Peter Fraser, who certainly did not think that New Zealand was too small to make a difference. Again we saw our last Labour Government realise that New Zealand could actually lead the world in this area.

What we have had is the Hon Nick Smith telling us that New Zealand has never had a greater reputation internationally than under the leadership of Tim Groser. Well, actually, we are falling behind other nations. We are not a world leader. We are falling behind Australia, we are falling behind the Europeans, and we are no longer seen as someone who is leading the world, whereas we were proud of the legislation that we passed in 2008. That was legislation that was passed with the support of other parties in this House, like the Green Party.

But one of the other important things that we cannot decouple from our discussions around having an internationally regarded piece of legislation to reduce our emissions is its importance to our trade, and to our reputation, and to our ability to sell our products at a premium into global markets. Our environmental record and how we fit into the global environmental system is absolutely crucial to us as an exporting nation.

We just need to look at the campaign that European supermarkets ran against New Zealand in terms of air miles to see what an impact that perceptions of New Zealand’s ability to be an environmental player and to produce environmentally sustainable goods actually have. New Zealand had to put a lot of thinking and a lot of resource into countering this argument that a very cunning group of European supermarkets put together and came up with the idea of carbon miles. It actually was only because of our sustainable food production methods in this country that we could counter the air miles argument and we could protect our access into a number of key markets. We will continue to have access, we will continue to get premium, and we will be able to move beyond being a commodity producer only if we protect our reputation globally as a producer of clean and sustainably produced food.

Labour opposes this legislation for many reasons. One that we would like very much to address today, and my colleagues Moana Mackey and Grant Robertson have touched on it before me, is that this is rushed legislation. This was rushed to meet a December deadline, and, again, to quote Grant Robertson, that is unbelievable. There are significant changes that should be subject to proper scrutiny in this House. This is serious legislation and those changes should not be rushed through.

Labour also opposes this legislation because it simply will not work. We were told ad infinitum by the Hon John Banks that this was common-sense legislation. Well, I prefer not to take my scientific advice from a man who is pushing the teaching of creationism in our charter schools. But what I am also told and what I would like to remind that member is that his colleague John Boscawen and ACT actually voted against the National legislation, putting paid to a lot of what was contained in that member’s speech. It was incomprehensible to us, because it just did not gel. But, actually, it fits with what we are seeing before this House, which is a whole lot of revisionist history from that side of the House. My colleague Moana Mackey would just like to assure the honourable member opposite that John Boscawen was actually a pleasure to work with in the last term when they worked on this legislation.

All this piece of legislation does is chip away at legislation that was put in place. You know, it is kind of the back-door way of throwing the whole thing out, because it is going to be so meaningless. This is the obsession with tinkering that this Government has. Rather than fix something, it just tinkers a little bit around the edges, and does not actually confront any of the fundamental problems that are facing us as a nation. This achieves absolutely nothing.

But what it does achieve, and what I am not looking forward to going back and telling the good people of Wigram—and I am sure my colleagues, whether they be list or constituency MPs, are not looking forward to going back and telling the people who elected them—is that, actually, they are going to be subsidising the polluters in this country. Taxpayers in this country are going to be shouldering the burden for reducing the cost of emissions from our polluters. That is not something that I am particularly comfortable about telling people with already stretched budgets in my electorate, and I look forward to a progress report from members opposite on how the people who elected them feel about that.

Another key thing that this bill does that is, in fact, dangerous is to reduce regulatory certainty. The flexible review positions that are contained in this bill do nothing to help business. It just creates a climate of uncertainty. Labour recognises that businesses need stability and certainty around their costs, and that they need to know what they are going to be facing as a cost of the emissions trading scheme. The ability contained within this bill to allow for not only a 5-yearly review but also an at-a-whim review does nothing to create that certainty. The Government really should have worked to find a bipartisan or a multipartisan agreement around this legislation and these changes. This is too important. This is something that we all need certainty on.

What we have talked about, and what I am going to address for the remainder of my speech, is the exclusion of agriculture and the fact that it should have an entry date. It is just ridiculous. It is just unfair to other industries that agriculture is getting the treatment within this bill that it does. What it does is leave other parts of our economy shouldering agriculture’s share of the cost. We have a manufacturing sector at the moment that is bleeding jobs, but a Government that has no idea of the drivers of this. It has shown us in recent weeks in this House that it has absolutely no idea what is driving it, and this piece of legislation is only going to make it worse.

It is going to be damaging to the forestry industry and the jobs that are contained there. Forestry will be worse off as a result of this bill. There is a clawing back of the second tranche of compensation within—

The ASSISTANT SPEAKER (Lindsay Tisch): Sorry to interrupt the honourable member. Her time has expired.

The last member who was on her feet speaking, Megan Woods, has done more for global warming and increasing the temperature of the world through that speech than anybody else I know. You see, what we heard there was a lot of huff and a lot of puff. [Interruption] What was that member’s name? It probably does not matter, because nobody is interested. Megan Woods said that it is OK to use the global financial crisis as a reason that emissions have dropped but it is not OK when one considers that GDP is down and recessions have been hitting different parts of the world. Far too much of that speech was in contradiction with what is important to New Zealanders.

I want to commend our Minister for Climate Change Issues, Tim Groser, for bringing a responsible piece of legislation to this House. The Climate Change Response (Emissions Trading and Other Matters) Amendment Bill is responsible because it does our fair share on behalf of New Zealand but it keeps down costs on New Zealand consumers, on New Zealand businesses, and on New Zealand mums and dads. You see, it is a responsible piece of legislation from a responsible Minister who is committed to a cleaner, greener, brighter future for all New Zealanders, and again I commend him for bringing this bill to the House.

It was interesting to hear the honourable member John Banks speak earlier. He spoke of the confused position of the Green Party. He also told us that New Zealand’s emissions are 0.2 percent of the world’s emissions—0.2 percent of the world’s emissions. He mentioned the Australian member of the Green Party, and that if Australia did more it would have a greater effect than anything that that party suggests New Zealand should do. He spoke of the American member of the Green Party, and that if America did its bit, it would achieve more than anything that that party suggests New Zealand could do. He did not mention Catherine Delahunty, the Martian member of the Green Party, or the other members of the Green Party who come from a different planet, because this is responsible legislation, and it is about making sure that here in this country we do what is right for our businesses and for our mums and dads.

I want to touch on two points extremely briefly. This legislation has come to this House following in-depth consideration of the recommendations of the Emissions Trading Scheme Review Committee. This legislation comes to the House following wide consultation with our communities, after the committee received written submissions, and following regional meetings and hui around the country. The purpose of these changes is to maintain the costs of the emissions trading scheme at the current level in our economy.

Finally, I want to say—and I am touching on something that is very important for my electorate—that what will be introduced is an offset scheme for pre-1990 forest land owners, allowing for the full tranche of compensation where offsetting is not taking place. That is extremely reasonable. There is far too much farmland that we are growing trees on, that we could be farming on, and we are farming on land that we could be growing trees on. This bill is actually recognising what is important to the economy, and bringing flexibility to a system that is also good for the economy.

I look forward to this bill coming to the Finance and Expenditure Committee. I look forward to us having the opportunity to hear from New Zealanders on all sides of this debate. This is a responsible thing for New Zealand. It is a responsible thing for agriculture in this country, and I commend Tim Groser again for bringing a responsible bill to this House. Thank you.

I understand the next call is a split call between Labour and the Greens. We will have Dr Rajen Prasad. I will ring a bell at 4 minutes.

I am surprised at how members opposite have not really defended the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, at all. They have simply made statements and assumed that—

💬 Jonathan Young: We don’t need to.

The member says we do not need to.

💬 Hon Simon Bridges: People love it.

Perhaps the Minister does all this to New Zealanders so that they can understand what your thinking is. That member simply made a few statements, hardly realising what he was saying, and he does acknowledge—

💬 Hon Simon Bridges: Don’t argue with me, you’ve only got 4 minutes.

That Minister does acknowledge that he knows nothing about this. If he did give a reasoned speech, if he did make the points, then I might have listened to him.

💬 Hon Simon Bridges: You’re not going to be able to say anything if we keep arguing like this.

The member carries on from the benches there, but he has nothing to say to defend the bill, and none of his colleagues have either. I think that Moana Mackey was right. The Government has forgotten why we are doing this, why this whole system has been designed, and why the international community is worried about this. It has forgotten the environment. Moana Mackey was absolutely right. Of course, there were no comments from the other side of the House about those things. It is almost as if those members are saying “We’re in Government. We’re saying it, therefore it must be right.” Well, I hope that at the Finance and Expenditure Committee those members get challenged by submitters for some of what is coming up. They say nothing to defend the clean, green image we have. Members opposite want to trade on it, but there is no defence of it, and in fact the scheme we currently have actually is about keeping New Zealand clean and green. So those members are undermining the brand.

The last Government member who spoke, Todd McClay, was questioning some of the figures given by my Green colleague, but what Mr McClay needs to acknowledge is that New Zealand is one of the worst polluters on a per capita basis in the world. That is what Mr McClay needs to acknowledge—and John Banks also. I think, Mr Banks, that you are now irrelevant to this Parliament, and your speech, Mr Banks, demonstrated that. Mr Banks criticised list members simply because they are list members—the Hon John Banks’ comments were that they were not elected. I do remember that member losing several elections. Auckland rejected him, and Epsom would have rejected him as well if it was not for the gerrymandering of the National Party—[Interruption] Mr Banks ought to recognise that. Mr Banks, you are irrelevant. Most speeches you give in this House and most points of order you take just do not make sense. If you were not here, Mr Banks, nobody would miss you. Winston Peters is absolutely right.

There is a lot more I could say about that member John Banks, his performance, and his history. But he is history. If changes are made to the electoral system, that member is history and I do not expect to see him back in the House. We will not have to put up with the kind of rubbish he puts forward as if he is now some kind of a god. The member’s time is over. Mr Banks, go back, enjoy life, and stay in Auckland, because Epsom will not want you again, that is for sure.

If members opposite want to know whether climate change is a problem, they should go and talk to just one or two people from the Maldives, and I have. They should go and talk to just one or two people from Kiribati, and I have.

💬 Hon Simon Bridges: What are you going to the Maldives for?

Mr Bridges, you do not have to go to the Maldives to speak to a person from the Maldives. Go back to Tauranga and you might learn something, Mr Bridges. We can talk to people we meet from other places. Many have come from this Parliament, as well.

There are two other points I want to make. One is this: the biggest polluters are being exempted. Where is the sense in that?

💬 Todd McClay: Who? Who are they?

Our farmers, Mr McClay. The agricultural sector produces 50 percent of emissions and it is our biggest polluter. Why? That does not make any economic sense. There is no logic in that.

The other point is this: why is this Government so scared of leading the world on anything? They want to follow; they do not want to lead. New Zealand is a proud country, and there are times when New Zealand has led. I wonder what that side of the House would have done in the 1930s with social security. If they were in Government in the 1930s, would they have led? No. This is a terrible bill, and we will not be supporting it.

Tēnā koe. It is with great trepidation that I rise to speak on the first reading of this bill, the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. I have to mention that the bill should probably be renamed the “Climate Change Inaction Bill” or the “Extending Subsidies to Climate Polluters Bill”, as that would be much more accurate.

I would like to thank the Hon John Banks and the member Todd McClay for raising a really relevant statistic, which is that New Zealand’s emissions are 0.2 percent of global emissions. I think it is probably relevant—and I will help the Hon John Banks with some maths here—that, actually, the New Zealand population is 0.06 percent of the global population. So that means that our contribution to emissions is over three, and closer to four, times greater than our size. Surely that is the relevant test as to whether or not we can make a difference and whether we should make a difference. We need to look at it on a per capita basis, and we are the fifth worst in the world right now.

This bill is a disaster. It is another example of National’s economic mismanagement. What is the point of an emissions trading scheme? It is to put a price on carbon, because that is how economic instruments work. I admit it is not the best way. The best way would be something much more direct and transparent that would give certainty to business. That would be something like a carbon tax, and a fee and dividend, in which case businesses could plan ahead for the increased cost of carbon, and citizens could receive that money back directly and make different choices with their purchases, and they could benefit.

I know that members on the Government side of the House, particularly the Hon John Banks, do not have a real handle on economics, but when you study economics, as I have, you learn about something called externalities. Externalities are costs that are not included in a transaction. Human-induced climate change, which is absolutely undeniable right now—no thinking, educated person could possibly deny the evidence that human activities are leading to dangerous climate chaos around the world—is going to be very costly. It is going to be very costly. It is going to be extremely bad for the economy. Even worse, it is going to be bad for people.

There is no way that New Zealand can escape the high costs of climate chaos, which are already being felt across the world. National Party members know this—or they claim to understand this reality—but what this bill demonstrates is that not only are they not going to do anything to help New Zealand’s economy transition to a smart, resilient footing; they are going in the absolute opposite direction. They are laying out the red carpet for the fossil fuel industry. They want them to come and drill, and frack, and mine, and do whatever they want to do to the precious places that New Zealanders love. They are subsidising this antiquated extractive approach so that a few foreign companies can turn a tidy profit under the big lie that somehow this is going to make ordinary New Zealanders richer or give them more opportunities. It is not the case.

The impacts of this Government’s emphasis on a dirty fossil fuel economy are already being felt in the loss of clean renewable energy jobs. I spoke to someone who works in wind energy today, and he said that with the gutting of the emissions trading scheme it is clear that there are not going to be opportunities, and that nobody is planning for future wind generation. That is the cost. That is the cost of not putting a price on carbon. Anyone who understands the basics of economics could tell you this.

The Minister for Climate Change Issues has said that this bill is about reducing costs to business and households, but what it is really doing is reducing choices for business and households. If the price of carbon is not direct, then no one can benefit from reducing their greenhouse gas emissions. Innovative clean, green business cannot compete, because it is not a level playing field.

National claims to be the party of economic credibility, but, in fact, it is completely ignoring the fundamental way in which economic instruments work. This bill guts an already ridiculously weak emissions trading scheme. We have a choice. The path is diverging, and we must choose one. We cannot develop a clean, green economy with opportunities for all New Zealanders if we are simultaneously subsidising dirty industries. This Government has chosen to put off—

I am sorry to interrupt the honourable member. Her time is expired.

Tēnā koe, Mr Speaker. Kia ora tātou katoa. I rise on behalf of the Māori Party to put just a few points before the House, to set out our support for the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill in its first reading. I want to reflect back just very briefly to late 2009. The Hon Nick Smith came to the Māori Party and worked with us on setting out, I suppose, the initial stand on the emissions trading scheme. We were able to negotiate some very important things that we thought were quite important.

I am talking about the impact of power and petrol prices. We were able to have those halved. I am talking about home insulation for thousands of low-income households. I am talking about the Treaty clause in the legislation to ensure that the Crown’s obligations to its Treaty partner were not going to be compromised by the emissions trading scheme. I am talking about the recognition that iwi have issues in respect of deforestation provisions. We were able to get a commitment from the Government that it would work with iwi and the Māori Party to find solutions for iwi with forests returned in Treaty settlements pre the emissions trading scheme period. We were fortunate enough to be able to work again with the Climate Change Iwi Leadership Group to play an ongoing role in international negotiations to allow for offsetting. The Māori Party was to be consulted closely on the review of the Permanent Forest Sink Initiative in terms of membership for that reference group.

We sought allocation of New Zealand Units to iwi quota holders in respect of the fisheries industry. The Māori Party was also able to be consulted and to ensure that iwi agricultural interests were represented in an agricultural advisory group. The Government gave a commitment to work with the Māori Party to invest in domestic research priorities, which were signalled as a part of our early speeches at that time, and an international initiative to address agricultural greenhouse gas emissions. So the Māori Party has had input into ongoing dialogue on a broader environmental policy programme, and this has been very important to us.

Can I say that Māori have a very strong interest in this emissions trading scheme. It has a substantial impact on Treaty settlements that included forestry land. It has an impact on Māori farmers, and of them there are many. It has an impact on iwi investment—in particular, in the geothermal generation area. It has an impact on petrol prices and electricity prices for poorer people. And, just as important, it has an impact on Papatūānuku and the wider environment. To cut a long story short, the emissions trading scheme impacts on Māori in almost every walk of life. We can say that we have appreciated very much the ability for us to negotiate with the Climate Change Iwi Leadership Group, and I believe that it has appreciated very much the involvement, at the highest level, with the appropriate Ministers over these last couple of years.

I will not go over too much of the substance of the bill, because I think that has pretty much been covered by a vast majority of the speakers today, but, more important, I will focus on the very important changes that we do support. The Māori Party is very supportive of, and pleased to support, the Government fully allocating the second tranche of the New Zealand Unit allocations to pre-1990 forests. That is with regard to Treaty settlements. We think that is important and that it protects the value of forestry settlements with iwi who own pre-1990 forests. As far as the Iwi Leadership Group support for this goes, it was able to let us know that in its regional hui throughout the country, the single biggest and priority issue for Māori and iwi has been the allocation of the second tranche of New Zealand Units. “The government decision to allocate these units is welcomed by Iwi/Maori.”—so said Dr Apirana Mahuika as the chair of that group, from memory.

We are pleased with the introduction of the forestry offsetting. It allows forestry owners to turn forestry land into better land use—farms, etc.—while setting up a forest in another parcel of land and allowing the carbon offsetting of the new forest to count. Prior to this bill, one had to pay for changes to land use, and that is no longer the case. That is important for us, and the Iwi Leadership Group came to the party by making the following statement: “The introduction of forestry offsetting as an option is welcomed too as it provides a mechanism for Maori forestry landowners to explore highest and best land use where currently our Maori forestry landowners are effectively locked into forestry forever or, bear crippling deforestation liabilities.” Those are some of the key points that we think are quite important, and are good points that have certainly come through from the Iwi Leadership Group.

One or two points that we might add just in closing are in respect of some of the key questions that we might have a few questions about, in respect of the agricultural sector not having emissions trading scheme obligations until 2015. Māori have big farming interests. In fact, the Māori incorporation Paraninihi ki Waitōtara Inc. is Fonterra’s biggest supplier in Taranaki. We believe that we need to find a balance between keeping our most important exporter afloat during tough economic times, but at the same time protecting Papatūānuku, protecting the environment. On the one hand the technology does not exist to stop carbon emissions from livestock, which means that making the agricultural sector subject to the emissions trading scheme means farmers are paying a tax for something that is a little bit beyond their control. On the other hand, agriculture causes the most emissions of any sector, and it should be incentivised to reduce emissions. Giving farmers a 3-year holiday for paying, which is subsidised by the rest of us, does not really incentivise them to reduce emissions. But over and above that, more research and technology need to happen to find a way to lessen the emissions from animals.

I want to make one or two final points. It seems to us that, in a sense, we might be actually forgetting about the environment itself. One of the most unfortunate consequences of the way the emissions trading scheme is set up is that the focus of emitters appears to be on negotiation and manoeuvring around the price for units. I am talking about things such as auctions, exchange rates for the units, where they are being bought, where they are sold, and where they are being produced. We think that those are valid questions that need to be addressed. The purpose of the emissions trading scheme was meant to be about improving the environment first and foremost. It has not necessarily played out that way—we tend to think about it in terms of business alone—but it is about that fine balancing act. We would suggest that it might be about time to consider green growth possibilities as well as the emissions trading scheme. We do support the bill at this point in time and we look forward to the discussion as it goes through the various stages. Kia ora tātou.

I move, That the Finance and Expenditure Committee report to the House on or before 17 October 2012, and that the committee have authority to meet at any time while the House is sitting (except during oral questions), during any evening on a day on which there has been a sitting of the House, on a Friday in a week in which there has been a sitting of the House, and outside the Wellington area during a sitting of the House, despite Standing Orders 188, 190, and 191(1)(b) and (c). I request a shorter than usual time frame for the select committee’s consideration of this bill as the proposed changes have been extensively debated during and through the 2011 review panel process, involving written and oral submissions, the release of the review panel report, and a series of hui organised by the Climate Change Iwi Leadership Group. A discussion document was released by the Government and discussed at public meetings around the country, including meetings with iwi, the opportunity for written submissions, of which 370 were received, and subsequent follow-up meetings with interested parties. The level of consultation to date with the public and interested parties has been extensive, and in order to ensure that the legislation is passed into law before the end of this parliamentary year, I feel it is reasonable to shorten the period available for select committee consideration.

I raise a point of order, Mr Speaker. The Minister moving the motion suggested that the report-back date should be the year 212. He is about 1,800 years too late for that motion, and he might want to say 2012 or something similar. I am only trying to help him.

I have put the motion.

💬 Hon Trevor Mallard: Point of order, Mr Speaker—

The ASSISTANT SPEAKER (Lindsay Tisch): Hang on. You brought up a point of order; I am going to rule on it. The intention of the Minister was well known, it is written down, and 20-12 or 2012, the intention was clear.

I raise a point of order, Mr Speaker. It is not written down for members of the House. You might have been included in some internal Government documentation, which would be questionable, but it has not been provided to members of the House, and for you to suggest that it has been is quite wrong. If there is a run sheet that belongs to the Government that you are privy to, then that is another issue. I suggest that if the Minister corrects his statement we do not need to have the whole speech all over again.

The ruling is that the motion has been laid on the Table, so it has been available for members to see. Even though the Minister may have inadvertently truncated the year, the intent is clear. It has been available to members, and so we will proceed as per the debate.

I want to officially put on the record that despite the long speech of the Minister for Climate Change Issues on the referral motion, our concern at the very, very short report-back time for this very significant piece of legislation, the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill—17 October 2012—is that it does not give the Finance and Expenditure Committee the time to do the job that it is supposed to do. The Minister may well have done consultation outside of the parliamentary process, but that does not mean that he has the right to truncate the parliamentary process in the way that he is, or that he has the right to undermine the parliamentary process in the way that he has by giving a report-back date that is less than 7 weeks away from where we are today. Normally, we would take 6 weeks to receive submissions at a select committee.

💬 Peseta Sam Lotu-Iiga: Not really.

The member says not really. I know under National that has not been the case. That has been the convention, and a 6-month time period at the select committee. We are being given a 7-week time period in which to advertise the bill, call for submissions, review the submissions, call submitters in to hear before the committee, have the officials do a summary of those submissions and a departmental report, make amendments to the bill, go through the amended bill, deliberate, and report back to Parliament. We cannot do that in 7 weeks.

The fact is that although the Government went out and consulted, as the Minister said in his speech, on a raft of proposed changes, what he has not consulted on is the actual final legislation that has landed in the House. That legislation differs not only from what the Minister said in the consultations that he outlined but also in some cases from what he promised would be in it. Some people who may have felt that they were consulted outside of the parliamentary process were led to believe that there would be things in this legislation that the Minister promised them would be there, such as some kind of restraint on the number of international units that can be brought into New Zealand. That was promised; it is not there. I do not think it is fair for the Minister to argue that a 7-week process on a significant and technical piece of legislation is OK when he actually has not produced a piece of legislation that follows on from the consultation that he outlined before.

So Labour is very concerned. The fact is that we will not be able to do the job. The fact is that it shows that the Government has absolutely no intention of making any changes at the select committee. It is just paying lip service to it. It is a waste of time. We are very, very disappointed.

Just speaking to the earlier point of order, I want to add my voice in support of the expression of concern. I do so for two or three reasons.

Less than 4 months is an inadequate amount of time for the House to consider this particular bill, the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. It is well known, and should be well known to the Minister for Climate Change Issues, that there is a qualitative difference between the process by which a bill is developed by the Government through a series of hui and meetings and listening to submitters, as the Minister said, on the one hand, and the parliamentary process by which the Government brings the bill into the House for it to be digested and debated by colleagues on all benches. They are completely different processes. To cite the first process and the length and comprehensiveness, as he put it, of the first process as a reason to truncate the second process is wrong and irrelevant. It is surprising that a Minister of the Cabinet should produce such a weak argument.

Secondly, on points of substance there is arguably no greater issue of moment before society and New Zealand, and, therefore, this Parliament, than climate change. To suggest that we can truncate that issue, of any issue, within a 4-month period is also erroneous.

Thirdly, on substance, we heard in all glorious technicolour this afternoon a full range of views, arguably from mine on the one hand to the Hon John Banks’ immediately following on the other. Unless we regard the parliamentary process as simply mindless, unhearing, unthinking legislative machinery, then we would have regard to seeing whether there is any scope for either getting complete common ground between the Opposition and Government, or at the very least identifying areas of disagreement that have been expressed this afternoon that we could at least shave off to move towards some common ground. Common ground on this issue, as farmers, business, and other sectors have said, is an essential criterion of predictability for investment purposes. To suggest that we just do not give a damn about that and that we will just run this thing through with the numbers as fast as we can is unedifying in the extreme and is not doing justice to the importance of the issue.