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 second time. The 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 includes a number of technical and minor amendments that will improve the operational effectiveness of the emissions trading scheme. The bill was referred to the Finance and Expenditure Committee on 23 August 2012. The committee received 758 written submissions from interested groups and individuals, and heard from 73 submitters who indicated that they wished to appear before the committee in person. I would like to take the opportunity to thank the chair, Todd McClay, and members of the Finance and Expenditure Committee for their work in considering this piece of legislation. My thanks go also to the submitters for the effort and thought that went into their submissions.

The emissions trading scheme is New Zealand’s main mechanism for meeting its international commitments to reduce greenhouse gas emissions. The emissions trading scheme was originally designed in the context of New Zealand’s pledge under the first commitment period of the Kyoto Protocol, which finishes at the end of this year.

💬 Rt Hon Winston Peters: How about some excitement?

There is still much uncertainty—this is exciting enough—in international negotiations over how progress towards reducing global emissions will play out, especially during the transition period from the existing Kyoto Protocol framework to a new framework covering emissions from both developing and developed countries, which is expected to come into force in 2020. The Government’s main objectives with these amendments are to ensure that the emissions trading scheme supports the Government’s economic growth priorities more effectively, to ensure that the emissions trading scheme is flexible enough to cater for various potential international outcomes in the period from 2013 to 2020, and to improve the operation and administration of the emissions trading scheme.

I am pleased with the committee’s recommended changes to the bill to build more flexibility into the emissions trading scheme—specifically, the proposed changes that give the Minister for Climate Change Issues the ability to retain the exportability of units generated by the forestry sector in response to possible future international scenarios, and greater discretion in setting the levy rate for synthetic greenhouse gases. I also note that the broadening of the eligibility criteria applying to the use of pre-1990 forest land for offsetting will create greater flexibility for pre-1990 forest owners.

I would now like to address another couple of topics that were raised by submitters and considered by the Finance and Expenditure Committee. Many submitters raised the option of putting restrictions on the type and quantity of international units that can be used in the emissions trading scheme—specifically, where they had concerns over the environmental integrity of certain types of units. It is important to note that the Government reserves the right to restrict access to units that have specific environmental integrity concerns, and it has already done so in some cases. Minister Groser has recently asked officials to look into the environmental integrity of certain units so that their eligibility under the emissions trading scheme can be reviewed. I would also note that, overall, the emissions trading scheme is designed to ensure that New Zealand can meet its international climate change obligations at least cost to the domestic economy. A key part of this is ensuring that the scheme is open to international units so that the price emitters pay reflects the international carbon price, which in turn reflects the level of international ambition to reduce emissions.

Another topic that was raised by a number of submitters was the limited time allowed for consideration of the bill in the select committee. I note that although the time allowed in the select committee was short, the committee fully considered all of the 758 written submissions it received, and it heard from all of the submitters who indicated that they wished to be heard in person. In addition, there were two rounds of consultation on possible changes to the emissions trading scheme before the select committee process: the first in relation to the 2011 review of the emissions trading scheme, and the second in April in relation to the Government’s proposed response to it.

The amendments proposed in this bill will support the Government’s growth priorities, ensure New Zealand is in a position to cater for various potential international climate change negotiation outcomes, and improve the operation and the administration of the emissions trading scheme. For these reasons, I am pleased to commend this bill to the House.

Only a National Government could pass a piece of climate change legislation that will actually see our gross greenhouse gas emissions, as a country, dramatically increase. Apparently, on “Planet Key”, you have not only its plentiful golf courses but also an emissions trading scheme that will result in mass deforestation, the death of the carbon forestry sector, and increasing gross greenhouse gas emissions. Apparently, on “Planet Key”, that makes good environmental and economic sense. Well, it does not at all, and Labour will be opposing this bill, the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, all the way through.

What I think people need to realise, and what the Minister for Climate Change Issues clearly does not understand, is that we no longer have an emissions trading scheme once this law is passed. We have a fig leaf. A fig leaf—that is all we have. I want to comment on the process as well, because instead of going to a select committee for what should have been 4 to 6 months, this bill went to a select committee for 7 weeks—7 weeks. The Minister did take on some consultation before the select committee process, but he did not consult with environmental organisations, he did not consult with Opposition parties, he did not consult with concerned New Zealanders, and, in fact, there was a lot that ended up in the legislation that was not actually part of the consultation. The select committee process was a rubber-stamping exercise from start to finish. I do want to thank the officials who worked on the bill, because they were put under really unfair time pressures and time constraints.

One of the things this bill does is it extends indefinitely the subsidies the Government has put in place for greenhouse gas polluters, and it removes indefinitely agriculture from the scheme. I want to start with agriculture. New Zealand’s emissions trading scheme is designed to be an all sectors, all gases scheme. It does not work if all sectors and all gases are not in the scheme. When agriculture represents half of New Zealand’s greenhouse gas emissions, and the Government says that agriculture is never going to come into the scheme, then the emissions trading scheme simply does not work. The Government needs to ask itself whether or not, in that case, the emissions trading scheme is actually an appropriate instrument for dealing with New Zealand’s climate change commitments. If it wants to keep agriculture out then that is its choice, but in that case this emissions trading scheme is not the instrument that is going to help New Zealand meet its targets and the Government’s own targets.

I want to be quite clear, because the reason the Government says it is keeping agriculture out is that the cost would make agriculture uncompetitive. Well, let us talk about that, because no one is suggesting that agriculture should face the full cost of its emissions on day one of entering the emissions trading scheme. Under the Labour Government’s proposal, which was a lot tougher than the National Government’s, at a carbon price of $10—a carbon price of $10—the average dairy farm, a typical dairy farm, in New Zealand would have an annual cost of around $1,000 per year, per typical dairy farm, and that is at a carbon price of $10. As of this morning UN offset units could be purchased for $1—$1. So if the Government were to bring agriculture into this scheme under this piece of legislation, with its one-for-two surrender subsidy, where UN offset units can be purchased for $1 and then subsidised a further 50 percent because of the one-for-two subsidy, we are looking at an average cost to a typical dairy farm of $57 a year. If the agriculture sector is going to be driven over shore and made uncompetitive by an annual charge of 50 bucks a year, then I would suggest that the agriculture sector has much bigger problems than the price of carbon. And it does—it is called an uncompetitive exchange rate. If the Government was really serious about helping agriculture, it would do what Labour and the Greens have been talking about and look at monetary policy and the tools the Reserve Bank has for helping to control an uncompetitive exchange rate. This is not going to destroy the agriculture sector in New Zealand, and agriculture should be coming into the scheme.

Federated Farmers often make the point—and it is a fair point—that the agriculture sector is already paying a carbon cost through fuel and electricity. That is true. Well, I want to know why Federated Farmers are not holding this Government to account and asking why the benefits of the low carbon price as well as the benefits of the Government’s transitional subsidies are not being passed on through fuel and energy prices, because they are not. The Acting Minister for Climate Change Issues confirmed that today. He said that he just went out and asked a random man on the street in Tauranga whether or not the benefits of the low carbon price were being passed on at the petrol pump and in energy prices. He must have been talking to John Banks, as that man on the street, because they are not.

I want to read to the Acting Minister the submission that we got from Gull Petroleum. What it said was “Gull notes that when it tendered to make fuel purchases from opposition oil company terminals in the Wellington Region, as recently as October 2011, one of the companies priced carbon at $25 per tonne despite the market at that point being at $14 per tonne … This $11 per tonne difference between response to tender and actual market is approximately 1.5 cents per litre … Note if the same deal was offered now with the market at under $7 per tonne the effective price difference would be 2-3 cents per litre.” That is for the consumer. Well, the price now is $1. No one seriously believes that those benefits are being passed on to consumers. They simply are not.

Why is that important? It is important because this bill has serious implications for the forestry industry in New Zealand. There are two things that affect the forestry industry: one is what the bill does, and one is what it does not do. Mr McClay can roll his eyes, but I know that the forestry industry in his electorate is very, very angry about this piece of legislation, as it told me when I recently visited. The first thing it does is restrict the market for New Zealand forestry units, because now agriculture does not have to purchase any units to offset its emissions, and those who do have to purchase units have to purchase only half because of the one-for-two surrender obligation subsidy. So suddenly there is a much smaller market for these credits. That is not what the National Government promised the forestry industry when it was elected in 2008. It said it was going to support the industry. It said agriculture was going to come into this scheme, and it did not talk about all these subsidies.

The second thing is what the bill does not do. What the bill does not do is put any restrictions on the UN offset units, which are currently priced at $1. I do not know whether the Acting Minister, who gave the first speech in the second reading debate, understands that there is no international price of carbon and that there is no international market. They are a series of schemes, which have their own units, and we accept all of them in New Zealand. All those other schemes that are currently being planned or are currently in place have restricted these units. What they have said is that a percentage has to be domestically sourced from within their own scheme, and then people can go outside of the scheme. There are further restrictions. For example, in Australia, the next 35 percent can be sourced only from Europe or Australia, so only 12.5 percent in Australia will be able to come from these UN offsets, which are currently priced at around $1. So all this talk about how we just need to leave the market ignores the fact that there is no market. I am not sure the Acting Minister, who answered questions in question time today and who spoke in the second reading, actually understands that that is the case.

The problem we have is that New Zealand’s gross greenhouse gas emissions are increasing. The Government is going to get up and say “Well, you know what? We have met our Kyoto Protocol targets. We are on track.” Well, yes, we have, but only because of the forestry sector. It is only because it planted enough trees to offset our growing emissions that we met the target. Without the forestry sector we are in serious, serious trouble. We have the added problem that the forests that were planted in the 1990s are due to be harvested in 2020. The wall of wood, as it is so called, is coming down. Because of the long lead-in time for forestry—it takes a couple of years to secure the investment and go through the consenting phases, then it takes 4 to 5 years for trees to start sequestering carbon at any real rate—we need to be planning and planting trees and forests now in order to undercut that wall of wood coming down, and that is going to be very difficult even without this piece of legislation.

This bill is devastating for the carbon forestry industry. I really hope that Peter Dunne does a little bit more consultation beyond the National Party on his position. I understand that he can vote for the bill—that is in line with his party policy; that is fair—but he can still support the amendment in my name that would restrict international units. That would not be out of step with his own party policy, and it would be literally a lifeline for the carbon forestry industry. He needs to talk to more people than Tim Groser on this issue. He needs to talk to the very foresters who are going to be laying people off, shutting down, and exiting the emissions trading scheme before he puts his vote in this House to kill off the carbon forestry industry in New Zealand.

You know what is even more bizarre about this? This restriction of international units, which the National Party is battling against so hard now. Tim Groser promised that he would do this in April. In a speech to the Climate Change Iwi Leadership Group in April this year he said “The government proposes to enable in legislation the introduction of a mechanism that would place a restriction on the proportion of international units a participant can surrender to meet their ETS obligations. Under current settings, there is a serious danger of NZ essentially exporting capital for no good reason resulting in a loss of economic welfare.” That is very true, and the mechanism does exist. When will it kick in? If the Government is saying that at some point it will intervene—we currently have an effective carbon price of 50c, you can buy UN offset units for $1, the Government will subsidise you for 50 percent, and that is 50c—how much lower can the carbon price go before this Government intervenes and realises that it needs to live up to the promises that Prime Minister John Key made to the forestry sector back in 2008?

It is a pleasure to rise and speak on this bill, the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. It is hard to sit here and listen to the observations made from the other side, when it comes to records around deforestation. Indeed, I ask the last speaker in this debate, Moana Mackey, what Labour’s record around deforestation was—deforestation before we came to Government. It was absolutely appalling—absolutely appalling; the worst it has been in the country since records began.

So now that they are saying what we are going to do, well, I am happy to speak to this. This piece of legislation meets a commitment we made to New Zealanders in the election last year, to make sure that we did not impose greater cost upon New Zealand households, that we protected New Zealand businesses, that we continued with an emissions trading scheme that does our part—does not lead the world, but so that New Zealand is doing its part—and that it secures jobs.

You see, during the select committee consideration of this bill, when we were hearing submissions, I remember members opposite talking about their great concerns. At the same time different parts of the Labour Party were screaming and yelling about power prices and the effect the emissions trading scheme was having upon jobs, or could have upon jobs, at the Tīwai aluminium smelter down in the very south of the South Island. So on the one hand you have got the Labour Party saying: “Do something about the prices of electricity, we are losing jobs in the manufacturing sector.”, and then somewhere else in the Labour Party, they are coming to the select committee and saying: “Make these changes. Ramp up the cost upon New Zealand businesses. Forget about the jobs.” Well, you cannot have it both ways, unfortunately. We made a commitment to New Zealanders during the election last year that we would modify the emissions trading scheme to secure jobs, to hold down the cost upon businesses, and this piece of legislation does that.

We have also heard from members opposite about the great rush that was going on at the select committee hearing. I want to give the House some facts around this, as opposed to the rhetoric we hear so often in this place. The Finance and Expenditure Committee met and considered this piece of legislation on nine occasions. There were 803 submissions received from 758 submitters. We heard 19 hours of evidence. So for 19 hours the select committee sat and heard evidence from submitters—73 submitters in total. Some of those submitters were able to take up to 45 minutes of time with the committee, because the committee was keen to have a full, frank, and open discussion. In total, our consideration—after the submissions were heard—took, therefore, 8 hours, and we met the time line that was imposed by the House to report back within 7 weeks.

Interestingly, this is not the first time an emissions trading scheme has come before the House, nor a review. When last the Finance and Expenditure Committee and the House considered legislation in this area, in fact it did have longer to consider it, but the number of submissions was about the same, and the period of time to consider the number of submissions, the hours to hear submissions, was less. So I would suggest to this House that actually the select committee gave as much time as submitters wanted. There were 803 submissions received, and 19 hours of evidence heard in parts of the country. We have taken this issue seriously, we have listened to New Zealanders, and we have given them the chance to come forward and discuss this issue with us—and this is not going through in urgency.

I think this is quite different from the first piece of legislation, which was put in under a Labour Government with the support of the Greens, which we now know has been of great effect to the New Zealand economy, did much more than they said it would at the time, and has now imposed great, great cost upon New Zealanders and upon New Zealand households.

I want to touch upon just one part here that has been raised by submitters—and certainly the forestry industry and the last speaker in this debate—and that is around overseas carbon credits and their effect upon the New Zealand carbon market. Last year the price of carbon was much higher than it is now. I think it was around, more or less, $18 to $20 a unit. Today, certainly, it is down to around $3 to $4. It has moved; it has fluctuated a little bit. It is there for a number of reasons here in New Zealand. They include that we have a recession; the world’s economies are down. But it is also around overseas credits, and their availability within New Zealand.

The select committee looked at this in detail and considered the issue, and our report says—and the report is correct—that it is possible to have an effect upon foreign credits entering the New Zealand market. That currently exists in legislation. It still is there in legislation and we believe that is an appropriate mechanism. There is an example where, under this Government, we have already limited some credits coming into New Zealand. So what I say to the member opposite who spoke last, and the forestry sector, is that we have ensured that the tools are here in this legislation to have an effect, to have an emissions trading scheme that will be robust for the future, and there will be more discussion around this. I commend this bill to the House. We have done our job properly.

Every now and again colleagues around the House get the opportunity to make contributions on debates that they feel really matter. I am the proud dad of two wonderful young sons, and every week when I come down to this place, like many other colleagues, occasionally I feel a little wistful about leaving them behind in Auckland, or wherever members come from. But the reason that I am keen to take a call in this debate is actually for them, because climate change is a fact—not a philosophy, not a political statement; a scientifically verified fact.

There is debate about whether we are going to get 1 degree or 6 degrees’ difference over the next century or so, and that may make the difference between the continuation of the human species or not. It is a small point, extinction—for us. It just happens to be in the lifetime of my two little boys or their children. So we have the bizarre and, frankly, disgusting picture of a Government so craven to its traditional agricultural and big-business backers that it is selling out the future of my children, and your children, and even their own children because it is somewhere between being confused about science that puts a 95-plus percent confidence in this change and being craven to the business interests that it serves in this House. Neither reason is good enough, neither reason is right, and, actually, neither reason is even in the long-term interests of this economy.

Weakening the emissions trading scheme to the extent that there is no minimum floor on a carbon price, to the extent that half of our emissions—the agricultural and primary sectors—are left out, and to the extent that there is a one-for-two giveaway subsidy on our carbon debits are changes that gut the emissions trading scheme. They are going to result in clear-felling of more timber and the destruction of more sinks. They are going to result in an under-investment in clean technology. They are going to result in New Zealanders paying more in our lifetime, and our children’s lifetime, to adjust to the climate change that is certain—not probable, but certain—to come. We have a choice. We can use integrity, science, and a dash of political courage to say what we know to be true—that our future will not be easier than our present.

Our future, in relation to climate change, will be a damn sight more difficult. New Zealand, it is true, and others have said it, will be relatively—relatively—less affected than many other countries, but it is little cheer to know that we will be relatively less affected than countries like Chad or Somalia, which are going to face mass famine. People will die in their millions. Here we will just put up with tornadoes, thunderstorms, droughts, floods, reduced agricultural production, and, may I say, more turbulent flights into Wellington. That is known as a First World problem—more turbulent flights into Wellington. It is not one I enjoy particularly, but, hey, no one is going to die, we hope. But people are going to die around the rest of the world and we are going to face refugee flows into New Zealand as a result. We are going to find our markets contracting on us. And we are going to find it more difficult to export to people who have far bigger problems than we do.

So what can we do? In the face of a party that has rolled over and said “tickle my tummy” to traditional business interests, that has flown in the face of established science, Labour is proposing four important Supplementary Order Papers. The first of those is to restore the entry date of agriculture to the legislation so that it will continue to enter in 2015. That will provide certainty, it will provide some incentives for proper investment in clean technology, and it will help agriculture to adjust by giving it a longer time period to adjust over.

Nearly 70 percent of submitters to the Finance and Expenditure Committee were opposed to excluding agriculture from the emissions trading scheme. Bring it in on schedule, all sectors, all gases, and let us have an emissions trading scheme that actually achieves its objective, which is to achieve a given level of carbon reduction at the minimum economic cost. That is what an “all gases, all sectors” scheme will do.

The second Supplementary Order Paper is to restrict international limits to 50 percent so that New Zealand units are preferred over international ones, thus protecting sinks in New Zealand like the forestry industry. That is the same standard that is applied to the Australian scheme. It is well known that many of the carbon credits that are sourced from offshore—particularly, one might say, Eastern Europe and other places—are perhaps worth less than the paper that they are milled on.

To make the transition period changes recommended by the panel, the carbon price cap would increase under Labour’s Supplementary Order Papers by $5 each year to $50, rather than remaining at $25. The one-for-two deal would be phased out over 3 years, rather than being continued indefinitely. Finally, our Supplementary Order Papers would have the Environmental Protection Authority publish annually the amount industries charge their customers for carbon, and that would allow the public to know when they are being overcharged.

We acknowledge that both the world and the domestic economies remain weak. We understand that there is turmoil in world carbon markets and that the carbon price has substantially declined. But if people look closer than today’s price, they will see that the price of carbon futures is high relative to the current price—that is, the markets are betting that carbon is going up again. When it does, New Zealand will face substantial international debit liabilities, because the current Government has failed to take the opportunity to put in place a scheme that is robust, workable, and coherent, let alone comprehensive. Instead, what is happening here is we have a Government that is knowingly selling out the future of all our children. It is knowingly flying in the face of established science.

The Intergovernmental Panel on Climate Change is the largest research body behind climate change. It involves thousands of scientists. It is mandated by the United Nations. Its fourth assessment report in 2007 found that the probability that the climate change that is already well documented is simply natural is less than 5 percent—that is, we know with a 95-plus percent confidence interval not only that it is happening but that human endeavour is causing it. Therefore, human endeavour has to change unless these lovely kids up in the gallery are going to pick up the price tag for stuff that we failed to do—that we failed to do. We look them in the eyes and we say: “Kids, I’m sorry. Your life is going to be more difficult, because adults today failed to have the foresight and the courage to write laws that would make our economy and our environment better when you grow up.”

I look to every parent in this House and I ask you to ask yourselves whether that is right. Is that the best we can do? Is that why we get up on a Monday or a Tuesday morning and fly to Wellington? I hope not. I hope that all of us, whatever our party, whatever our persuasions in this House, have the foresight and the courage to ask ourselves how, as a country, we should respond to this challenge, which is inevitably coming at us like a rushing freight train through a tunnel. We can see a light ahead. We know the noise. We know we are in a rail tunnel. We know that climate change is happening. We know that half of our emissions are from the agriculture sector. Yet this Government wants to leave agriculture out.

We know that in the long term it is better for the economy as well as the environment if business has appropriate prices signals, but this Government is giving a one-for-two discount and seeing the carbon price go to zero. We know it is going to be in our fiscal interests—that is, it is going to cost New Zealand less as a country—if we build up our carbon sinks so that we have a positive net balance; our sinks outweigh our sources. This bill does not do that; it does the reverse. By gutting the carbon price and leaving out agriculture it leaves our foresters with no incentives to plant.

We know that it will be better if business itself invests to mitigate the worst challenges and to give itself a decent, long adjustment curve. This bill does not contain any incentives for any chief executive to go to their board and say they want to install a scrubber on their smokestack, they want to invest in clean technology, they want to invest in research and development that will help their processors work better as well as being better for the environment, or they want to become a clean, green exporter and help New Zealand to be a clean, green, and clever country. There are no incentives. In fact, it will be harder and harder for businesses to do what is right. Think of our children; think of these children. Government, you should be ashamed.

I commend David Cunliffe for his impassioned speech—something that is conspicuously lacking from the Government. The Finance and Expenditure Committee has held its foreshortened hearings and deliberation. It has returned its report, by majority only, to this House. The Green Party still opposes the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill and explains why in our minority report. Part of the reason has to do with the global reality out there that David Cunliffe has just spoken about: the gathering reality of climate change, already better termed climate disruption, possibly turning to climate chaos sooner rather than later. But I will address that later in the final reading. Today we focus on the intense unreality that is the New Zealand emissions trading scheme and the sad irony and sad history that have led up to the mess that we are now in. My purpose is not to damn the past for its own sake, but to seek what we can learn from the experience before it is too late.

In understanding this amendment bill and why the Green Party opposes it so strongly, it is necessary to recall what has gone before: the litany of bold pronouncements, faint-hearted gestures, deliberate self-deception, and downright chicanery. It is breathtaking in its political cowardice and it brings no credit to New Zealand as a nation. It reveals governmental failure on a monumental scale. We find over the past two decades eight about-faces in the history of New Zealand’s renunciation of its fair share of climate change obligation. In 1990 the Government declares an interim goal of a 20 percent drop in gross emissions below 1990 by 2005. We would explore a goal of 35 percent by 2005—a brave new world, long since abandoned.

Feint No. 1: in 1992, just after signing the Framework Convention on Climate Change, the Government drops the 20 percent target, promising only to reduce emissions to 1990 levels, with no specified period. No. 2: in 1994 the Government moderates its ambition again, to a target of equalling 1990 levels by 2000—this time not gross emissions but the new concept of net, using forestry sinks to help meet our emission obligations. No. 3: in 1997 New Zealand signs the Kyoto Protocol with the legal obligation to cut our total emissions to 1990 levels, not by 2000 but in the period 2008 to 2012, a whole decade later. Fast-forward 5 years to No. 4: in 2002 the Government implements the Kyoto Protocol on the understanding it will meet its obligation on a net basis, not gross. This accords us freedom to increase gross emissions without constraint. No. 5 is coming up. The Government, having declared in 2002 a goal of peak gross emissions by 2012, revises that 3 years later by predicting continued growth in emissions after 2012. The goal is now simply reducing the rate of growth by that year. Here comes No. 6: in its 2008 legislation the Government takes the goal of reducing the rate of growth by an unspecified amount over an unspecified period. The target year of 2012 drops from sight.

Enter the Key Government and No. 7: in 2009 the Government accepts the 450 part per million threshold of carbon atmospheric concentration, with the associated 2-degree limit, but announces a mid-point target for 2020 of 15 percent—half of that required to meet the threshold. No. 8 coincides: the 15 percent will not be a mitigation target in which we actually reduce our gross or even our net emissions, but rather a responsibility target that can be met also by the unlimited purchasing of international credits, and it is qualified by a number of essentially unattainable conditions. Bravo! It is an exquisite irony that the European Union is committed to an unconditional 20 percent target by 2020, which is virtually what New Zealand declared as a goal for 2005 back in 1990.

The history of the 22 years has shown New Zealand to have now become a laggard in climate change. We have downgraded our promises to make things easier in the short term, forgoing the opportunity of switching to a smart, green, low-carbon economy that would benefit us all in the medium term, and ensuring dangerous, perhaps catastrophic, climate change in the long term. What we have constructed over 20 years is a madhouse of self-deception, of which this amendment bill is the latest shiny model.

The select committee received 803 submissions and heard from 73 submitters. Many reflected corporate self-interest. That is valid enough as far as it goes, even if it is occasionally myopic on its own terms. But it is never the national interest, and it surely is not the global interest. Others reflected the broader interests, expressing alarm from the most recent scientific findings of polar ice melt. That has in no way derailed the Key-Groser regime in fudging the matters further. The result is an emissions trading scheme that will celebrate the end of the first Kyoto commitment period, 20 years after the Framework Convention on Climate Change, by encouraging emissions. The amended Act will not respond to the challenge of climate change. It will busy itself with transfers of monetary coupons circulating with near total futility inside New Zealand, as the planet’s climate begins to wreak its havoc upon us. What titanic stupidity.

The Government has come to regard the Kyoto commitment period as a transition period—a 5-year transition period that is a prelude to an 8-year transition period to a global agreement that begins too late. With its weakened emissions trading scheme New Zealand is becoming a safe haven for dirty emissions. Carbon leakage may transform into carbon importation. The emissions trading scheme, originally designed to be a stimulant to behavioural change, has become a prophylactic against that change. Our gross emissions continue to rise and we are saved in Kyoto accounting terms by the forestry sector, which, incidentally, has been given a bad deal. The Government fails the child’s test of logic that today’s forest sinks are tomorrow’s emissions—not too bright on the IQ scale for intergenerational justice. This Government plays up the free market as its ideological underpin, then interferes with the market at its political discretion. The price gap, a 50 percent surrender obligation, sectoral favouritism, free allocations, and non-convertibility of most local units—not too bright on the IQ scale for socio-economic harmony.

The New Zealand scheme has become a magician’s trick: self-deception by numbers. The presiding officer is Minister Groser, chief wizard of neo-liberal orthodoxy in trade—an art translated directly into climate change, as if the climate is a tradable commodity. His devolved Prime Minister looks on, not entirely familiar with the drama, or cognisant of the content, knowing enough not to want to know more, careful not to read the documents or recall what might have been said. Like the blighted captain of the Rena, Mr Key sails on courting disaster, but hopeful that his tenure will run its course before nature exacts its revenge. In the greatest brain fade of a career, he said in 2005 he was “suspicious” of global warming. That was 13 years after all the Governments of the world had agreed to a binding legal obligation to avoid it. Eighteen months later, he said “I firmly believe in climate change and always have.”—as if science is a matter of belief.

Our emissions trading scheme has become so degraded relative to the original theory of cap and trade that some think it is beyond rescue as a framework for a real climate change policy. What we need is a policy regime that effectively prices carbon and thereby reduces emissions—something above the UN offset price, which fell 30 percent 2 days ago, with certified emission reduction units and emission reduction units below €1. That is a carbon price here of NZ$1.30 or NZ65c after the one-for-two deal. Brilliant! It may be time now to visit the whole edifice of New Zealand’s climate change policy. Whatever the future holds, it is critically important we strengthen, not weaken, the New Zealand policy, for we are now lagging behind other countries. The Green Party will oppose this bill all the way through, and we shall, before long, advance new ways of restoring New Zealand’s climate change reputation through a strengthened national mitigation policy.

It was very interesting to hear that latest speech on the emissions trading scheme from the member from the Green Party Kennedy Graham. It was interesting. On the emissions trading scheme, the Greens are not interested in what the rest of the world is doing; New Zealand should strike out on its own regardless of what the rest of the world is doing. At the same time, a couple of days ago, when it came to other issues like—

💬 Dr Kennedy Graham: I raise a point of order, Mr Speaker. The member just incorrectly alluded to the Green Party not being interested in other countries. It—

The ASSISTANT SPEAKER (H V Ross Robertson): Order! [Interruption] Order! The member is an experienced member. He knows that that is a debating point.

They are very happy to see us strike out on our own on emissions trading scheme issues. Then, when you come to the issue of quantitative easing, for example—watering the milk or debasing the currency—the attitude is that everybody else is doing it, so we should just go along with the flow and do what the rest of the world is doing. It is funny. There is no need to be consistent on these things, but that struck me as unusual.

I was fortunate enough to go the Kyoto Protocol meeting in December 1997—I was working with Simon Upton at the time—and it was a very interesting conference that they had there, and a hugely ambitious thing that the world was trying to achieve. It was the first time we were getting a whole set of countries across the world to accept something that would materially lower living standards today in order to ameliorate a problem in the future. That was a heroic undertaking, and there was always a tension between those in, mainly the developed world, and those out, mainly the developing or growing economies.

Sadly, 15 years later there has not been much progress internationally. The first period is coming to an end at the end of the year and no agreement is in place thereafter. The tension between those in and those out has become much more relevant now, given the epoch-making shifts in the global economy in the last 15 years. It was hard in 1997 to justify New Zealand taking significant actions when China was not doing anything. In 2012, it is absurd. The Government has always said that New Zealand should do its fair share, and New Zealanders expect us to be positioned on the green end of the spectrum, but few would support New Zealand striding out on its own, riding its little pony, while the rest of world hangs back.

It is interesting to hear everybody talking about what Europe is doing, as if it was the role model for everything in life, but that is not where we live. We live in the Asia-Pacific region, and when we look amongst our trading partners in the Asia-Pacific region, where do we fit in? What is China doing? Not much—nothing. What is the US doing? It does not have much of a scheme. Canada—nothing; it has pulled out. I think Japan has a little scheme that involves about 1 percent of the economy. Korea, Singapore—nothing much there. Australia has something, but there is a huge question mark over its scheme politically.

I found it very difficult when, for example, we had the Parliamentary Commissioner for the Environment coming in and being very critical of our legislation, but admitting to the Finance and Expenditure Committee that she had given no consideration whatsoever to what the rest of the world was doing. I am afraid I do not think that is good enough. New Zealand does operate in a competitive global economy, and we need to know where we sit in the world and to adapt to the situation.

The options are that we could just carry on in the direction set in 2007, and become the only country in the world where agriculture is directly drawn into an emissions trading scheme. That seems to be somewhat reckless. We could drop the scheme entirely, like Canada, but we have decided to hold more or less steady in the meantime, not doing too much damage to the New Zealand economy, but having an emissions trading scheme still in place, ready to ramp up if and when the rest of the world joins with us in combating what is a real issue for the globe. It is true that the Government will not get some of the income that it expected, but it is absurd to call that a subsidy, as some members of the House have done.

When we look at the other side of the House, we have the Greens really wanting New Zealand to immolate itself on a pyre of self-righteousness on our own, and I do not think anybody who is concerned about New Zealand’s jobs and the productiveness of our economy in an open world of competition can stand up for that line of reasoning. On that score, I commend the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill to the House. Thank you.

I rise on behalf of New Zealand First to take a call on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. As we have already said in this House—and our leader, the Rt Hon Winston Peters, spoke on this a couple of months ago—New Zealand First does not support this emissions trading scheme or this Climate Change Response (Emissions Trading and Other Matters) Amendment Bill.

Basically, the emissions trading scheme is just another tax on the people of New Zealand and the businesses of New Zealand. New Zealand First does not subscribe to a Wall Street takeover of New Zealand. The Merrill Lynch money traders of this world should not be standing to gain hugely from any sort of emissions trading scheme. We have money-launderers around the world, in the likes of New York, London, and Shanghai, and they are the ones who stand to make more money from any emissions trading scheme that is put in place. I can recall that when I was in the export field the big thing at the time was international standard ISO 9000, another scheme that was going to supposedly be the big bee’s knees of everything. New Zealand companies and corporates—and corporates all over the world—were going to become international standard ISO 9000 accredited. It was going to mean that you met all these new various standards and schemes in terms of all sorts of things, including environmental controls on your companies to ensure that you were a good corporate citizen in the environment.

Again, it was a bit of sham, because everybody did it but at the end of the day nothing really came out of it. It was just a way for the people who were running the standards scheme, who were also the people who were coming and doing the audits on the companies and the corporations, to make a huge amount of money. But at the end of the day, it really did not have any great outcome for New Zealand, New Zealand exporters, and New Zealand corporates. We said at the time that it would simply have been better if New Zealand companies had had better internal audit systems, rather than having to spend a huge amount of money on this tradable scheme around the world in order to have international standards.

This emissions trading scheme and what we are looking at today serve to turn environmental protection into a carbon credit bank; to make environmentalism a speculative business. In other words, they are issuing tradable credits, verging almost on a Ponzi scheme, so that good money that is taken from New Zealand ends up paying for the wrongs of other countries and other polluters around the world. There are much better mechanisms for New Zealand than uncontrollable financial machinations such as an emissions trading scheme. This could end up costing this country more than $2 billion—$2 billion that New Zealand simply cannot afford—again, to be a supposed world leader in the emissions trading scheme. Why would New Zealand put itself out on a limb, put more than $2 billion into something, when we simply cannot afford it at this stage, and when so many other countries are not having a bar of it?

These funds should be retained in New Zealand, as is New Zealand First’s policy, in order to provide funds to tackle our own emissions and our own pollution here in this country. We should be applying environmental levies here in New Zealand to ensure that New Zealand is kept 100 percent pure.

I lodged a written question today to the Associate Minister of Transport, as an example. It asked what the percentage breakdown is of New Zealand’s bus and truck fleet in each of the Euro 1, Euro 2, Euro 3, Euro 4, and Euro 5 engine categories, and what initiatives the Associate Minister is taking to introduce available technologies to reduce diesel emissions from the older Euro 1 and Euro 2 powered buses and trucks.

It is amazing, the response from the Minister. This was a response to a letter from a constituent last week. It said “I understand that air pollution is important, but I am currently looking at the process of amending the 2007 vehicle exhaust emissions rule. However, I understand the previous Minister of Transport and officials of the Ministry of Transport have already advised you that it is not the role of the ministry to test products, regardless of their potential benefits. I am also told that you have been advised that there are no funds available to carry out any testing or research in this area.”

So here we have New Zealand citizens, New Zealand corporates, trying to look at ways that emissions can be controlled and trying to get on top of something like that. Diesel emissions are a major problem for this country, and old buses and old trucks are polluting our environment. We are basically being told that it is not really something that the Government has any interest in. So in other words, what we are seeing is that on the one hand the Government wants to get into all these various schemes to send New Zealand’s money offshore to Ponzi schemes around the world in emissions trading. But here in this situation, where people come out with practical solutions to address our own emissions in this country, the Government really does not want to give much credence to it at all.

New Zealand First maintains that the State must strike a balance between economic progress and appropriate environmental goals. The emissions trading scheme does not decrease emissions; it just trades them and moves them around to those economies that can afford to buy carbon credits. The emissions trading scheme devised by this Government is totally unsustainable. It is nothing more than another tax on the people and production of New Zealand. New Zealand First does not support this bill, and once again we are seeing good New Zealand money going down the drain.

Can I say to the public listening to this debate on the Climate Response (Emissions Trading and Other Matters) Amendment Bill that if you want to have an argument, talk to your neighbour about whether or not they think climate change is real. It is an issue that polarises people. The issues are complex, and at the centre of the debate is a conflict between First World environmentalists and those in developing countries who want to leave poverty behind.

What I think is interesting as we have listened to the debate this afternoon is that everybody has a view, but very few people have the technical understanding of the issues. People seem inclined to hide behind their prejudices, and, as you can hear from across the House, they shout at those with a different point of view. Anger inevitably becomes the currency of debate.

Well, there is a broad consensus that we need to slash greenhouse gas emissions, but there are many points of view on where the knife should fall. The Greens and New Zealand First want to cut back our lifestyles, but they underestimate the value of economic progress, advancing health, advancing education, creating wealth, and creating opportunity in our daily lives. What they want to do is draw all that to a halt.

I think it is crucial to recognise that the cost of decarbonising our economy will be a function of available technology. With effective technology—more efficient clean-energy alternatives, better batteries, electric cars, and cheaper and safer nuclear power—the cost of decarbonisation will be relatively low. Without technological change, however, the costs are going to be high. That is why the Government is exercising leadership and that is why it has created the global science partnership, involving 25 countries, to try to find new technology to lead us forward in a cheaper way. There is a link between climate change and development—the twin challenges of our age. Making energy costs more expensive in our country is simply going to reduce incomes.

I support this legislation. It is very sensible and it is going to cause least economic damage to communities in the situation we are in at the moment of global recession. Thank you.

There have been some interesting contributions in this debate on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. I think it would be useful if we just reminded ourselves of where we have been in this topic before. What we should do is go back and remember what we were told by the experts about what the evidence actually is.

Way back in 2007 the Intergovernmental Panel on Climate Change, which is the body that Governments from across the world appointed and which was filled with experts, met and was then asked to report back to the Governments about what the issues were. This is what it said: “… world temperatures will rise between 1.1 and 6.4oC [during this century] … sea levels will rise between 18 and 59 cm …”. There will be more frequent warm spells, heatwaves, and heavy rainfall, and probably an increase in droughts, tropical cyclones, and extreme high tides. Those are big ranges in those numbers, but that is what the evidence says is likely to happen. That is the challenge that we are asked to meet.

How have we tried to meet this challenge? First, there was the Kyoto Protocol, which preceded the intergovernmental panel. It recognised that there was an extremely important issue here that needed to be met, and 191 countries came together to seek to do so. New Zealand signed the protocol in 1998, when the Rt Hon Jenny Shipley was the Prime Minister, and New Zealand ratified it some years later under the leadership of the Rt Hon Helen Clark. If the protocol is not replaced by an international agreement this year, there will be a lapse in international obligations, and that lapse could be permanent, despite the challenges of the science that we were told about only 5 short years ago.

My colleague David Cunliffe, when he made his contribution, spoke a bit about the sorts of challenges that New Zealand will face if climate change of the scale predicted by the expert scientists becomes a reality. I know he did not mean to downplay the issue—he talked about First World problems—but we actually have some serious issues that we do need to concern ourselves with. There will be higher temperatures in the North Island; the risk of new pests and diseases for plants, animals, and humans; more frequent droughts and floods, more rain in the west, and much less in the east, and that will affect our farming; and retreating snow lines in glaciers and changing river flows in the South Island, which will have an effect on hydro generation.

There will be concerns that we need to very much worry about in New Zealand, and in our region, in our neighbourhood, the Pacific, there will be major problems, such as rising salinity in the water table, rising sea levels—issues in an area where already there are major issues around the economic viability of the nation States of the region. Guess who is going to have to pick up both the tab and the responsibility, if we are going to be good neighbours, as we like to say that we are, in this region? New Zealand, and Australia, and our friends and allies. These are the problems that we are going to have to face.

How did New Zealand begin its legal response? After a number of attempts to forge cross-party consensus, Labour in 2008 passed the emissions trading scheme. We nearly got to consensus between the two major parties, but in the end—and I chaired the Finance and Expenditure Committee that heard the evidence on this bill—the National Party decided to stand apart from the 2008 legislation. But that was, I think, a genuine attempt to bring about an emissions trading scheme, to create an economic instrument that would cover the major causes of greenhouse gas emissions in New Zealand. It was an attempt to extend an economic mechanism to all those gases in all the sectors that mattered. Polluting industries would basically pay one carbon credit per tonne of carbon equivalent gas produced. De-polluting industries, like forestry, would get carbon credits that they could sell on the international market to polluters and, as we hoped, the international market would assist us to provide a mechanism where we could start to reduce New Zealand’s carbon position over time.

We said that we would get sectors in over time. Forestry went in from January 2008. Agriculture, our single biggest emitter, would come in in January 2013. The big trade-exposed industries were given 90 percent subsidies by what we termed a free allocation of New Zealand Units that they could rely on, instead of having to buy carbon credits. We said we would phase that out at 8 percent a year—a very, very gentle phase-out, ending in 2030.

So that was the world-leading emissions trading scheme that Labour brought into being. It was actually a pretty moderate measure, and yet it could not survive the onslaught of the incoming National Government in 2008-09. Again, there was an attempt to get some consensus across the House. National came in, having campaigned on—as it put it—moderating the scheme. We sought to negotiate with National so that it could achieve its aim, but in a way that did not completely wreck the emissions trading scheme. Despite that, and despite discussing with Nick Smith in good faith ways in which the scheme could be moderated, National ended up relying on the Māori Party on that occasion and managed to introduce some changes that diminished, yet did not completely gut, the scheme. It did things like postpone agriculture’s entry until 2015, water down the carbon price on what was called a one-for-two deal, basically bring in subsidies for New Zealand Units at either 60 or 90 percent, and bring in an intensity-based allocation model.

What the experts said at the time was that the emissions trading scheme would certainly fail on the basis of those emission reduction targets that would be brought into place as a result of those modifications. But just when we thought nothing could get worse, we now see the present bill.

I just want to put on record what the Parliamentary Commissioner for the Environment said about what this legislation will do, if it manages to pass, but before I do that I actually want to praise the Māori Party for pulling its support from the bill. Those members made a big political mistake back in 2009 by writing a blank cheque for National and allowing it to do the first gutting of the emissions trading scheme. But they are not making that mistake now, and good on them. And this is why. The Parliamentary Commissioner for the Environment said: “The ETS is the main system New Zealand has for reducing our greenhouse gas emissions. Hollowing it out like this makes a farce of our climate change commitments.”

If the best that we can do now is trade slogans, the way we heard in question time, when Simon Bridges talked about lowering petrol and electricity costs at a time when the carbon price is at an all-time low and the emissions trading scheme is simply irrelevant to that exercise—if the best we can do is hear that Acting Minister perform his audition for the front bench in the mid - next year, post - John Key reshuffle—if that is going to be climate change policy in New Zealand, and if we are going to have to rely on Peter Dunne to do the right thing and not vote for this legislation, then this Parliament deserves an absolute F for meaningful action on climate change.

That speech from Charles Chauvel deserves an absolute F for failure to actually deliver any arguments around the issue. It is pretty pretentious of the Labour Party, the Green Party, and New Zealand First in this Parliament here this afternoon when they come in here and do not actually talk about the real issues. The real issues are that they want to increase the costs of living for ordinary New Zealanders. That is what the Opposition wants to do.

💬 Charles Chauvel: That’s absolutely right!

It is. It is. It is exactly what the Labour Party wants to do. They will hide behind the guise of the international price of carbon, but the reality is that the Labour Party, Green Party, and New Zealand First Party want to set a price for carbon. They want to set a price at $10. They do not want to have the international price at $1; they want to set a price at $10, because they have been going—

💬 Charles Chauvel: No, we want the market to do it, actually.

Yes, they agree. They say that they are going to set a price. That is the whole reasoning behind why they want to do it, and that will put costs on ordinary New Zealanders. If this Parliament was to set a price at $10 or $12, or whatever those parties think is satisfactory to promote the forestry industry and to make them go to bed at night thinking that they have saved the world when they actually have not, that will hurt ordinary New Zealanders in their power bills and in their cost of living.

Look at what has happened in Australia. In Australia you have got inflation at 2 percent now. The Government there has gone and put these kinds of carbon taxes on its communities, and it has delivered high inflation. Ordinary Australians who are trying to make a go in very difficult times are finding it very, very difficult. That is what you would get under the Opposition parties here, because the direct impact of their policy would make it harder for ordinary New Zealanders to get by. That is a real disgrace for those parties in this House. None of them talk about the price, and none of them talk about the impact on New Zealanders; they talk about these high and mighty ideals of saving the world and how we need to do that. Well, get in the real world. Get out there and see how it is to earn some money, and see how it is to actually pay the bills, because you will not be so high and mighty there; you will be looking at what is the best and the balanced way to deliver for your people. Thank you.

I understand this is a split call. I call Dr David Clark.

Goodness! What a speech. What a load of nonsense from the previous speaker, David Bennett. It was disappointing, even by his own standards.

This is a shameful piece of legislation. I have heard members in this House in previous speeches describe it as a fig leaf. I think that that is too much to say. This piece of legislation, the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, is dangerous. It gives greater assurance to emitters. It is not a neutral thing; it is not simply a cover-up. It is actually giving those people who are engaged in the industries of today and of yesterday greater assurance about their prospects than those businesses that are engaged in the business of today and tomorrow. This is the wrong thing to be doing. You cannot use prices to influence behaviour without having a price. That simple fact seems to be lost on the Government. It is not really clear why it wants to do this for any other reason than political expedience.

This scheme when it was originally designed was a modest scheme—a very modest scheme. It was designed to send an investment signal for future endeavours. In one sense it was bold, because it included all sectors and all gases, and it was the first in the world to do that. But it began modestly. It wanted to make sure that all businesses could adapt, that New Zealanders were not put out of work, but that we could start on the road to reducing emissions for the good of New Zealand, and for the good of the planet.

The National Party when it came into power immediately weakened it. At the same time it removed the renewable preference legislation, which would have seen no new baseload generation built and no unnecessary baseload fossil fuel generation built. National also removed the biofuels sale obligation, which meant that the biofuels industry has all but departed from New Zealand. Instead, it has given greater and greater assurance over time to polluters that the taxpayer will subsidise them.

The taxpayer currently pays for 100 percent of emissions in the agricultural sector. That is for agricultural emissions. The system as it was originally proposed would have seen polluters paying for 5 percent. After they had paid 5 percent, it would have seen the taxpayer still pick up 95 percent of the bill. I think that is modest, but it sends a signal. But that was too much for the National Party. It has pulled back from that position. It has continued to water down the scheme and now it is indefinitely suspending agricultural emissions from the emissions trading scheme. It sends all the wrong signals.

There are plenty of other ways we could be looking out for industries in New Zealand. We know that we need pro-growth tax reform. Research and development tax credits would make a big difference to this industry. We know that we need better savings policy so that businesses have access to the capital they need to expand. We know that the Reserve Bank needs stronger tools and a stronger mandate for ensuring that the economy is in favour of our businesses. But, unfortunately, the National Government is using this tool, wrongly, in order to achieve friendship with some industries. It should be, instead, focused on making a difference in the climate change space, and addressing the issues for industry through progressive policies that support those who want to grow business in New Zealand. And it can reduce other taxes. There are ways of going about making positive change without watering down this scheme and making New Zealand an international embarrassment.

This bill modifies the emissions trading scheme. It weakens it by extending the transition period for polluters indefinitely along with the entry of the agricultural sector into the scheme. Aside from that, it makes a range of technical changes that will also see the forestry sector worse off. It is a disappointment and it reflects National’s delusion that the environment and the economy are contrary forces. We need both.

Kia ora, Mr Speaker. I rise to oppose the destructive Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. Climate change is the biggest global threat. It is happening faster than we expected and we are nearing those dangerous tipping points. We stand at the precipice of catastrophic climate change. But this is not a problem just for future generations any more; it is a problem now. Recently, former UN Secretary-General Kofi Annan said in a report that 300,000 people are dying every year, predominantly amongst those who have caused it the least. The fact is, though, we have a chance. The window is still ajar. We can still avoid the worst of climate change.

But in this debate I do not want to talk about the Carteret Islanders, the Bangladeshis, or the Tuvaluans—the real face at the front line of climate change. I do not want to talk about the penguins or the polar bears on the cusp of extinction. I want to talk about why I am opposing this bill. It is because of my kids. It is because when my son, Arlow, is expected to enter intermediate school, we will see the complete failing, according to experts, of the Arctic Sea ice in summer months. When my son is thinking about starting a family, we could see tens of millions of climate refugees from those countries around the world I talked about. At the time of him thinking about retiring from work, we could see the extinction and complete destruction of island countries around the world.

This is not just a political, a scientific, or an economic issue; at its heart, this is a moral issue, and New Zealand has a responsibility to act. We have to act. We have got one of the highest per person emission rates in the world. Our emissions are going through the roof—25 percent above what we promised in 1990. Under our current system, we are not standing out front. This is not a story about us marching out in front of the world; this is about us doing our fair share. Mr Goldsmith said the Greens were not looking at other countries around the world. The fact is we have got a huge document here, which we have tried to table—which National members refused—showing all the countries that are making pledges. Countries are doing stuff. We are the ones being left behind. As we debated in this debate, the emissions trading scheme is the Government’s main response to climate change. What this bill does is weaken an already weak, ineffectual scheme.

What are the experts saying about the National Party’s bill? My colleague Dr Kennedy Graham says it is weakening it to an irrelevancy. Brian Fallow says it is putting the emissions trading scheme into an induced coma. The Parliamentary Commissioner for the Environment calls it toothless and a farce. Rod Oram says it most bluntly: “You’re killing it.” This bill will see more cheap, offshore, scam credits flood our carbon markets. This bill will see only some firms covering only 5 percent of their carbon costs. This bill maintains that one-for-two deal beyond 2012 indefinitely. This bill maintains the $25 price cap indefinitely, meaning that those involved in the scheme will face no incentive to reduce their emissions. This bill defers agriculture indefinitely again, meaning that the taxpayer will continue to subsidise for years to come this industry, which is responsible for half of our emissions. This bill will see emissions rise, deforestation accelerate, and our country’s reputation erode even further.

Many of these criticisms are valid of the Government’s existing emissions trading scheme, and what it is doing here is making a bad situation even worse. The fact is there is a cost to our kids and the future generation, but also it is a cost to the taxpayer. This bill is destructive. It is destructive for our climate future, it is destructive for our carbon markets, and it is destructive for a clean economy and green jobs. Under this ineffectual scheme, the taxpayer has had to pick up the tab of $1 billion in the last financial year, and now the Ministry for the Environment predicts that this amendment bill will increase it by another $330 million over the next 4 years. What is the point of a trading scheme if it is not sending a market signal to invest in clean energy, when it is, in fact, sending the wrong signal—to keep investing in polluting technology and old-fashioned practices? What we have seen around this bill is a shocking, rushed process. Only 2 weeks were given for submissions on one of the most technical, controversial, economy-wide policy debates. If only the Government would act with the haste with which it comes to passing bad legislation when tackling climate change.

This bill is going to go down thanks to the vote of one man. That one man is Peter Dunne. He is going to go down—his legacy in this House—as the man who sold the assets, and now he is also going to be the man who sold out our climate future. The fact is the environmental bandits in our Government are selling out all of our kids’ futures. When the world is crying out for clean energy, we could be providing it. This is not a cost, this is not a risk; this is a business opportunity. It is a moral imperative to act. Tackling climate change is about investing in clean energy, it is about energy efficiency, it is about public transport, it is about smart farming, and it is about building jobs. When the world is crying out for jobs and we have got tens of thousands of New Zealanders out of work and leaving the country, let us invest in our kids’ futures. I want to look my son in the eye—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. His time has expired.

I rise as a member of the Finance and Expenditure Committee to talk about this Climate Change Response (Emissions Trading and Other Matters) Amendment Bill in its second reading.

I must say, I find it a bit rich to hear the Greens talking about chicanery, when their idea about printing money must be the ultimate piece of political trickery to achieve political gain—a piece of nonsense, much like their notions around the submitters that came before us. As our esteemed chair of the Finance and Expenditure Committee, Todd McClay, outlined earlier, we did receive 803 submissions, we heard 19 hours of evidence, and there were 73 submitters. The Greens have dismissed those who do not agree with their dogma. I would not be so arrogant, and, in fact, I reject what they have said, because we as a party and we as a select committee have indeed listened to the submitters and taken note of them.

Let us have a little look at some of them. Business New Zealand represents a mere 76,000 employers. It thought the bill and its amendments were excellent. It said that the bill reflects New Zealand’s contribution to global emissions and our specific emissions problem. It is well-balanced between the needs of taxpayers, business, and consumers. It also says that it avoids a knee-jerk, short-term fix based on current low carbon prices—something that Labour and the Greens seem very preoccupied with.

Export New Zealand also made excellent points, which, once again, were ignored by the Opposition because they did not suit its particular dogmas. Export New Zealand said that it was very concerned about maintaining the international competitiveness of our exporters and was very opposed to any strengthening of the emissions trading scheme. It commended the bill because of the increased stringency in the scheme, which if it did go ahead would increase costs and undermine our international competitiveness at a time when exporters are struggling with a high and volatile dollar. These were all excellent points, and, unlike the arrogance of the Opposition, we listened to them carefully.

In this speech I will give the last word to the sponsor of this bill, the Minister for Climate Change Issues, the Hon Tim Groser. When the bill went through its first reading he said that “The objectives of the Bill are to ensure the ETS is flexible enough to cater for a range of international outcomes between 2013 and 2020, improve the operation and administration of the ETS, and change the current treatment of the synthetic greenhouse gases sector in the ETS.” I agree with the Minister, and I support this bill and commend it to the House.

The question was put that the amendments recommended by the Finance and Expenditure Committee by majority be agreed to.