Climate Change Response (Zero Carbon) Amendment Bill

Yeah, thank you, Mr Chair. I thought I’d just start off the committee of the whole House process by thanking members for their support through the entire process to this point. The end is within sight, and I think the stage that we’re about to enter into is extremely important because we get to really address some of the, I guess, unaddressed concerns that have been raised during the passage of the bill into and through the House.

Just very briefly, Part 1 of the bill inserts the main content of the bill, which is related to the Climate Change Commission and emissions reductions and adaptation. The purpose of the bill is to provide a framework by which New Zealand can develop and implement clear and stable climate change policies that contribute to the global effort under the Paris Agreement to limit the global average temperature increase to 1.5 degree Celsius above pre-industrial levels to allow New Zealand to prepare for and adapt to the effects of climate change. The intent of the bill is to help to keep our planet safe for future generations.

To achieve this purpose, the bill includes four key elements. First of all, a Climate Change Commission will be established to provide independent advice and to monitor progress. Second of all, a target for 2050, set in the legislation, which gives certainty about how much New Zealand’s emissions must reduce by. Third, a system of emissions budgets and emissions reductions plans to act as stepping stones to the target and to provide a framework for planning. And fourth, adaptation measures to assess and address the risks from a changing climate.

Thank you, Mr Chair. I’m pleased to take a call at the committee stage of the zero carbon bill. I’d just like to start by saying that I’m going to be talking about one particular Supplementary Order Paper (SOP) amendment today.

But before I do so, I just want to give a little bit of background to some of the Supplementary Order Papers that we’ll be debating today. For the most part—and I think the Minister in the chair, James Shaw, will agree—there was very good cross-party consultation that went on between Mr Todd Muller and the Hon James Shaw for the most part of a year. I think even the Minister will agree that it was unfortunate that there was a period of silence before the bill was introduced to the House, and I know that the Minister apologised for that. Notwithstanding, it did mean that there were some things in the bill that were unexpected, that we hadn’t discussed, and that we weren’t ready for.

I think it would also be fair to say that in the Environment Committee, National Party members were in disagreement with some parts of the bill. There were changes we wanted to make but, obviously, we didn’t have the numbers and we weren’t able to do that.

So here we are at the committee stage, and we have a number of Supplementary Order Papers that we will be speaking to today.

The first one that I want to talk about, SOP 404, is in the name of Todd Muller. In clause 8, after new section 5ZI, we insert “5ZIA Review of … forestry assets”. This amendment comes from the many submissions that we had around the rapid buy up of farmland and whole-of-farm conversion to forestry.

I want to talk about one particular submission that relates to this SOP that I’m going to be debating, and it was from 50 Shades of Green. They had a concern around monocrop planting of pine trees on fertile land. They talked about the 30,000 hectares that have been planted in pine alone this year on the East Coast. They spoke about the Overseas Investment Office changes which have been smoothing the pathway for overseas companies to purchase land for forestry.

We’ve all seen reports in the media of the amount of farms that have been purchased by overseas companies and turned into pine forests. He spoke of farms in his area that were completely locked by forestry. He spoke about a tipping point in rural communities, where there are only 20 to 30 kids left in schools, which means that closures are potentially imminent and the nearest school is 50 to 60 kilometres away. He spoke about the decimating of rural communities, the pressure on farmers, and the attractiveness of the price that farmers were being offered—up to 25 percent above normal market value—and sales to what they call “carbon cowboys”, which has led to sales of tens of thousands of hectares now planted in pine.

He spoke specifically—and this is the bit where he was very emotional and cracked up—and said that they had recently lost 15 families in Pongaroa. That’s massive for a small community. With this in mind, our amendment—section 5ZIA(2)(a)—talks to the monitoring of the commission. And we would like to see that the commission must consider “the social, economic, cultural, and environmental impact of activities undertaken for the purposes of generating offsets from removals from land use, land use change, and the forestry sector;”. And given Shane Jones’ answers in the House today, and the complete, I would say, misunderstanding of how the rising price of carbon credits will affect the increase of whole-farm conversions, this amendment is very important.

Moving on to section 5ZIA(2)(b), we heard from many submitters about the monoterpenes that are released from pine trees. I have to say I’m not a scientist, but we did hear this from many submitters, and they talked about how this gas interacts with methane in the atmosphere and potentially makes the warming effect of methane far greater. Subsection 2(b) would require the Climate Commission to consider scientific and technical research into the warming and cooling impact of pine forests. So given the amount of submitters that we had who were concerned about that, we wanted to insert that into the new section.

And finally, in section 5ZIA(2)(c) the commission must consider the degree to which offsets from land use change and the planting of pine forests reduce any incentives created by the 2050 target for the New Zealand economy to transition away from fossil fuels. Now, this is a very big and important point. I mentioned in my speech yesterday one of the comments from the submitters. One of the comments in particular stayed with me from one of the submitters. She said, “Why should the polluters continue to pollute and transfer their dirty problem to the agricultural sector by having rural communities destroyed by the mass planting of pine trees?”

The National Party position is that we are concerned about the level of planting required and what that will mean for dirty polluters to actually change their behaviour and not just continue to offset that with planting. And as the Minister knows, I’m sure the Parliamentary Commissioner for the Environment shared our concerns and he prepared a number of papers that I’m sure the Minister has read. But he noted that it was a key concern for him—that is, the absolute absence of any effective mechanism for managing the risks of forestry and, in particular, that they may be overused at the expense of achieving reductions in gross emissions. And the risk of the relative impermanence means they will not actually provide the climate mitigation hoped for. He went on to say that, in his opinion, these risks were serious and would fundamentally compromise the purpose of the framework.

Now, we heard from a lot of submitters in this area. We share their concerns. The Parliamentary Commissioner for the Environment shares our concern as well, which is why we believe that this section 5ZIA(2)(c)—the amendment—is so very important in that the commission must consider the degree to which these offsets are going to potentially not change the behaviour of our big emitters. As I said earlier, many of them were saying, especially the farmers, it is not fair for companies to continue to pollute, continue to emit and just transfer that problem to the rural sector. And so that is why we’ve popped that provision in there.

I’ve got a number of other Supplementary Order Papers that I will speak to. But I’ll leave that one there so that my colleague, Mr Scott Simpson, I think, can have a go.

Thank you, Mr Chair. The National Party has made it clear throughout the progress of this legislation that, in fact, what has occurred is an attempt—an honest attempt, I think—on this side of the House to engage with the Government in terms of a true bipartisan, cross-party process. Having said that, notwithstanding the negotiations that I and my predecessor Todd Muller have had with the Minister for Climate Change and others in the Government, there are still some outstanding issues that we seek to resolve at this stage of the legislative process—the committee of the whole House—by way of Supplementary Order Papers (SOPs).

It is not the intention of the Opposition to filibuster, to load this debate up with a myriad of SOPs that achieve little but time-wasting. What we have sought to do is to bring to the committee, by way of SOPs, five thoughtful, considered changes that we think will not only add value to the bill but add comfort and security to the wider New Zealand public, to businesses, and to communities. One of those areas that is of great concern to us is the establishment and setting of the methane targets in the bill. We accept and acknowledge the wisdom of a split-gas approach and we’re very happy with that, but what we do have difficulty with is the 24 to 47 percent target for 2050 reductions.

It’s been our view right from the outset that the best way to handle this is actually to use the advice that is available and will be accessible to the Minister in making recommendations about targets and will be available from the newly established expert-led panel of commissioners that we are about to appoint if this bill is successful and makes its way through the House. So we think that at the first opportunity that the Climate Change Commission has, they should actually apply their minds and their thinking to the 2050 methane target and then make a recommendation to the Minister, who should then consider it and adopt it. We think that it’s the science-based, independent, expert-led commission that actually is in the best position to provide an analysis of what the methane target should be for 2050, which, of course, is a long way out.

One of the things I suspect we know as legislators is that anything, any number, that we legislate in this bill this year, come 2050, that number is almost certainly going to be different from the number that enters the legislation today or this year. So my Supplementary Order Paper 405 provides an opportunity to make some changes that would allow for the provision of the commission to set a recommended methane target for 2050 and that the Minister could then consider it and adopt it. We note that in new section 5P(1)(b), inserted by clause 8, there is an opportunity for the Minister at any other time to request a review. Now, the problem with that provision is that by setting a review, the Minister then would have to come back to change the target by way of legislation. So what my SOP does is provide an opportunity, should a situation like that occur, for legislation not needing to be amended but actually for a change to be put in place by Order in Council. We think that would be a suitable, adequate, and efficient mechanism for achieving the objectives of SOP 405 in my name.

During the course of this debate, my colleagues will speak to the other SOPs that we have, but we want to emphasise again that these are not political point-scoring SOPs. They are the kinds of SOPs that we think add value to the bill, and we put them forward on the basis of genuine good faith, but we also hope that the Government will take notice of our clear intent in producing and preparing these SOPs. It’s likely that if the SOPs that we put forward are not accepted by the Government, then the potential for change at a future date remains high, and I’m sure that’s not the purpose of the Minister’s intent in trying to get cross-party support. So on that basis I will finish this call here and allow my colleagues and the Minister to respond.

Thank you very much, Mr Chair. I rise to commend to the committee Supplementary Order Paper 406, a really simple amendment in my name but, I will try and persuade the committee, quite an important one. It replaces new section 5W set out in clause 8 in this bill, and just to give background, new section 5W currently says that as far as possible, reductions in overall carbon emissions must be met from New Zealand credits or removals. It says “as far as possible”, with no question as to what the cost might be. Now, actually, it’s difficult to conceive of a scenario where it is not possible to remove or reduce emissions from New Zealand; it’s just a question of what price or sacrifice New Zealanders are prepared to make. So what we have in this bill is a requirement that New Zealanders are prepared to pay any price to ensure that they reduce or remove carbon emissions from domestic sources.

One of the impacts of that—we’ve already heard from Erica Stanford—is that we might get land-use change that wasn’t really an intention of this bill. We might see whole areas of New Zealand planted out in a monoculture of forestry that is actually environmentally damaging. But a more likely outcome is that New Zealanders pay more than their international competitors, perhaps in the same industry. So an ironic outcome of requiring the use of New Zealand carbon credits and New Zealand reductions is actually carbon leakage. What does that mean? It means that, actually, emitting activities that emit carbon dioxide or equivalents end up getting done outside New Zealand because the requirement to use New Zealand credits makes it more expensive to do here, in so far as carbon credits are an important cost, than doing it overseas.

There’s another principle at stake here, I would have thought. The objective of this bill should be for New Zealanders to be able to meet their obligations to reduce their contribution to the climate at the lowest possible cost, or, put another way, for a given financial cost New Zealanders are prepared to pay, they should be able to make a maximum reduction in their contribution to carbon dioxide - equivalent emissions. That sounds like a good goal. Given that this is a global issue—because last time I checked, the sky is all connected all the way around the world—surely it makes no difference if the reduction in emissions occurs in New Zealand or elsewhere, because if things get a little bit unbalanced, maybe the wind will blow. It seems to me that we are shooting ourselves in the foot with this bill by requiring New Zealand reductions only.

So what does this amendment on Supplementary Order Paper 406 do? Well, it says that emissions are to be met through domestic emissions reductions and domestic removals or offshore mitigation. The next thing people say is—and we heard it in the House from Shane Jones at question time; he said there might be “dodgy Ukrainian credits”. First, he goes after the Indians, now the Ukrainians. Where will he stop? Well, the fact of the matter is we should be focusing on the quality of the credits, not where they come from. So I’ve said in this amendment that the Government, by Order in Council, can stipulate what a quality credit is, but it must be neutral in its origin. That’s the kind of values I would expect the Green Party and the Labour Party, even if not New Zealand First, to stand for—that it’s not your origin or your nationality that matters, but, actually, the quality of the credits.

So I hope that the committee will support my amendment on Supplementary Order Paper 406 to make this scheme more efficient, to make it less discriminatory, to make New Zealand economically competitive, and to ensure that New Zealanders can meet their climate change policy obligations at the least cost, or meet them as well as possible for a given cost. And if it was to be done, then who knows? With a few more amendments, the ACT Party might even support this bill. Thank you, Mr Chair.

Thank you, Mr Chair. It’s my privilege to speak in support of this bill in the committee stage, and I want to briefly outline the principles in the bill as I see them and why I think that they are themselves the perfect rebuttal to Mr Seymour and Mr Simpson’s contributions and their Supplementary Order Papers (SOPs). I do think that whilst they are intended to be constructive contributions, and I don’t doubt that for a second, the fundamental principles in the bill itself will lead us to the answer that says, actually, the bill as it is drafted is indeed preferable.

The Government is here today delivering on a major commitment by passing the zero carbon bill, taking us with a framework that will get us to net zero carbon by 2050. We all know in this House, I think—those of us who are responsible—that we need to reduce our emissions. We need to have a sustainable future so that our kids and grandkids can have a future on this planet. That part of it is not rocket science, and I hope that everyone in this House can appreciate that we only have one planet. As Mr Seymour said, it is the same atmosphere everywhere. If we don’t do our part in this part of the world, we are polluting that same planet for everybody’s kids and grandkids all around the world.

This legislation is important because it belongs to New Zealand. It is the result of dozens and dozens of submissions—thousands of submissions, I’m advised—from across the country, from parents, students, environmentalists, farmers, scientists. We have a programme as a Government to work with farmers to make sure that they too are supported in the efforts to reduce emissions, and there are plenty of good-practice examples out there that we can all learn from. We understand, of course, many New Zealanders are calling for faster action on climate change and want further action. Once this legislation comes into force, the climate commission will be able to suggest stronger action without political bias, and that very point starts to speak to Mr Simpson’s SOP 405, which recommends, effectively, as I understand it, that the actual target for methane be set by regulation rather than as a part of the more robust process. I think we can’t afford to have such a significant issue sent off to secondary regulation. We actually need to make sure that the Climate Change Commission, that the process we’re putting in place with carbon budgets, is robust and stands on its own two feet.

It’s clear, of course, that we’ve had to act for quite some time. Where we got to with this bill is something that should have been in place a long time ago. I had the privilege of working for a former Minister of climate change, the Hon David Parker, in the previous Labour-led Government, and even in that time, we had mapped out a path to sustainability that involved biofuels sales obligations, a preference for renewable energy, and so on. That is why it’s so critical that we put in place legislation now—because we didn’t act then, because it was repealed in a large part. Agriculture was taken out of the scheme, effectively, and another number of changes were made that diluted progress.

💬 David Seymour: I’m not hearing any rebuttal to my speech here. Just a long history lesson.

That is why it’s so important that we move now.

To get to Mr Seymour—he would like to hear, in respect of SOP 406, some of the challenges that I have with it. One, of course, is that the economics of this stuff have been well canvassed before, and I think Mr Seymour knows that well. In 2006, Sir Nicholas Stern wrote the 700-page report addressing the fundamental economics of climate change, and that report, way back then—he was chair of just about everything back then in the UK that had to do with economics—showed that the economics are always much simpler if you act sooner, you act decisively. Not only is it good for your country, because it puts you in an economically smarter position, but it’s also good for the planet, because the costs of mitigation further down the track are way more expensive. I think Mr Seymour really understands that. So I think, given that fact, we can discount a little his SOP right from the start.

Of course, in this bill, the climate commission is one of the critical things that we’re doing, and that independent advice, the ability to monitor for progress towards the climate target, is absolutely critical, and the emissions budgets that will be set and the fact that they’re independent.

I want to talk a little about the Environment Committee recommendations and the nature of the Minister’s response to those, because I think that they speak—[Time expired]

Thank you very much, Mr Chair. I appreciate the opportunity to take my first call in the committee stage of the Climate Change Response (Zero Carbon) Amendment Bill and echo, if I may, the sentiments expressed by my colleague Scott Simpson, who, I think, framed up our perspective extremely well. We all know in this House that often when we get to the committee of the whole House stage, there are times when Oppositions put Supplementary Order Papers (SOPs) on the Table more for political posturing, regardless of the colour of the Opposition of the time, and it’s all part of the process that we follow. I think it is fundamentally different with respect to this bill.

I covered off the National Party’s perspective with regards to this last night in the second reading of the bill: that this whole conversation is anchored on a premise that bipartisanship is critical for the enduring nature of legislation of this sort. We don’t need to traverse all the ups and downs of the process to date, but it has been very much, as Scott Simpson said, in the spirit of adding to the legislative framework that is being considered that our SOPs appear in front of us this afternoon. I’d like to quickly step through those and urge particularly the Minister for Climate Change to reflect deeply on the merits of them in terms of adding to the quality of the legislation that, it has to be acknowledged, has been worked on now for many, many months.

Firstly, SOP 401, reflecting on the additions we would like to do to the purpose statement. There will be an argument that says, “Well, we if append the Paris Agreement to the legislation, then somehow the intent that is sought by this SOP gets covered.” We disagree with that. The purpose plays a significant part in terms of the legislative hierarchy that this bill establishes. It understandably focuses on the importance of keeping New Zealand’s contribution to climate change constrained to match the collective world view of trying to keep under 2 degrees, and ideally 1.5 degrees.

But the language of the Paris Agreement is very explicit. It has ambition with respect to constraining temperature rise but also quite explicitly outlines that that should be done in a manner that doesn’t threaten food production. This is a very critical addition in the context of the New Zealand economy. We feed 43 million people from our exports. Having that purpose statement in the bill expanded to reflect the global expectation of action with respect to climate change, we think, makes sense. So we have SOP 401 that specifically aligns the purpose to the detail of the Paris Agreement, which we and over 180 other countries are signatories to. Again, as Mr Simpson has said, we see that as adding to the strength of this bill, not detracting from it.

SOP 402, again, we think is a very useful addition, because there is a conversation that has not been had in New Zealand with respect to climate change action, which is the tough conversation which suggests that even if we put our shoulder to the wheel, as we each imagine ourselves doing, it is highly likely on current trajectories that the 1.5 degree ambition will be overshot in relatively short order by the cumulative emissions from the world, and it will push on to 2 degrees. What we want is the ability for the commission to be able to reflect on what is actually happening in the world both in terms of emissions, temperature impacts, and making a decision as to what then makes sense from a New Zealand economic response—essentially, calibrating it to what is actually happening in the real world. That is the point of this SOP. Again, we think it adds to the strength of this bill, asking the commission to be conscious, as they reflect on our required journey to decarbonise over time, of, essentially, what the rest of the world is doing.

The next SOP I would like to pass some comment on, SOP 405, of course, relates to the target. This is a very critical area. There’s a significant amount of science that is out there around what makes sense in terms of a target for methane reduction by 2050. In fact, the Minister himself is on the record as saying it’s a very mixed bag, and because of that mixed bag, he chose a particular reference point on a particular Intergovernmental Panel on Climate Change report. We won’t have time, no doubt, to debate the ins and outs of that particular decision, but the fact is that a range was picked.

It has had significant debate, not only within the agriculture sector but particularly within the science community of New Zealand. So the question then, we think, needs to be answered: why then have a range? Why not ask the commission to provide for us the advice with respect to what the methane target should be? Now, the previous speaker, David Clark, referenced the fact that this is somehow inappropriate, that it should be fixed now and we not leave it to the commission. I suggest you should read the bill. There is significant expectation in this legislation of the commission to be able to check, recheck, and adjust its expectation both in terms of budget and, indeed, targets if certain conditions are met. So it is entirely consistent with how this legislation has been framed up and the expectation we as Parliament have of that commission to ask of them to provide to us a target range for biogenic methane by 2050. Again, as my colleague Scott Simpson has said, this is not partisan rhetoric. These are very deeply considered additions to what is a complex but, we think, you know, pretty well-crafted bill that sits in front of us.

In terms of SOP 404—which essentially relates to review of use of forestry assets and an insertion we would like in clause 8—we have had significant debate over the last few weeks, and I sense more is coming, around the appropriate use of forestry assets to offset the challenge of actually reducing carbon dioxide emissions. The emissions trading scheme is designed in such a way that carbon is priced and if you can’t meet your obligations, you look for units to offset your emissions. Increasingly, because of the lack of availability of international units, our domestic emitters are turning to forestry.

What we are seeking is, rather than the sort of passing reference that we accept—and the Minister mentioned this earlier in the committee, that there is some opportunity for the commission to reflect on this issue in the legislation as it stands—we want to ask specifically for the commission to reflect deeply on this issue on our behalf and report to a future Parliament. Again, we think that adds a huge amount to this. We are expecting the same of them in other areas. In fact, the Minister talked about the expectation he has on the commission to look at airline emissions in particular, and there is a specific request on the commission to look at that and report back. We think that if you are explicitly asking a commission to look at how we would treat airline emissions in the context of our response to climate change, we think it is absolutely appropriate to then ask that same commission to reflect on the use of forestry as offsets for our domestic emissions.

Finally, our last SOP—403—relates to a more technical amendment which is, essentially, asking that each emissions budget state the total emissions that will be permitted but expressed both in terms of biogenic methane and carbon dioxide. Because we have agreed that, actually, a split-gas approach is appropriate in terms of how we measure, manage, and over time drive the budget response to it, it makes sense that we are consistent in keeping those gases split in terms of how we report from a Climate Change Commission to, ultimately, ourselves as Parliament.

So I repeat the key message that we have put on the Table from this side. When you consider the 18 months’ gestation of this bill, the work that has gone on in a bipartisan manner to develop the detail of it, firstly, by myself and, more recently, by my colleague Scott Simpson, and the various permutations that we’ve had through that journey, we now get it to the point where we think this bill is in a reasonable state, but there are these five SOPs that we believe genuinely add to the strength of the commission in terms of enabling it to do its job for us and the wider community. It’s in the spirit of that—it’s in the spirit of the Minister’s original reach out to us on the other side for bipartisan commitment to creating legislation that endures—that we put these SOPs on the Table. We ask for the Minister and the Government to, in good faith, reflect on what we have put in front of them.

Thank you, Mr Chair. I was part of the Environment Committee that started doing some of the background work and started considering this bill, and then, through the usual permutations in Parliament, I moved on to a different committee. It was exciting to work on this legislation and, in particular, it was exciting to work fairly intensively but cooperatively with the Opposition members of that committee in trying to get it right and trying to understand what was going on. I would like to pay a particular tribute to the Minister for Climate Change, Mr James Shaw, on the way that he worked in that bipartisan manner as well through that process.

It’s in that spirit of bipartisanship that I do wish to address the Supplementary Order Papers (SOPs) that have been raised by the Opposition today and to try to address some of the points they’ve made. I’m going to start with Mr David Seymour’s SOP 406, in which he really advocates that we should be able to use overseas mitigation efforts as well as what we do here in New Zealand in order to meet our targets. He says it’s one world and so why shouldn’t we use carbon credits that are generated overseas. There’s a plausible simplicity to that, but it is too simple—it is too simple. It misses the point.

It misses the point because it misses where our emissions come from in New Zealand. They come primarily from two major sources. They come from transport and they come from agriculture. Transport is irremediably linked here in New Zealand. It’s us getting from Bluff up to Kaitāia. Transport is located here. The emissions are generated here. There is no leakage with those transport emissions unless it’s in the cost of building vehicles, but there is no significant leakage around that.

The agricultural emissions are generated here. They do not leak overseas. They are generated here by us. It is us who needs to take responsibility for them. So I agree that in a sense we should have some access to overseas credits, that we do need to have that at the margins, but, primarily, we need to take responsibility for our emissions here in this country. That is why it is so important that it is New Zealand carbon credits that are available to be used in the context of accounting for carbon and accounting for greenhouse gases in this country.

To me, it’s an interesting SOP from the ACT Party, because all along they’ve been quite keen on free-riding on the efforts of the rest of the world, saying that New Zealand’s emissions are so insignificant we really shouldn’t worry about what we do here; we should just sort of let the rest of the world deal with the problem. But the very spirit of this bill is that we deal with our own problems here, that we do stand up and take responsibility for ourselves, and that is why it is so important, not just in terms of where our emissions come from but in terms of the ethos behind this bill, that we are doing our share towards ensuring that this world does not end up in a terrible mess from greenhouse gases.

Moving on from that, I just want to address some of the thoughts that are lying behind some of the SOPs from the National Party. I accept that they are intended in a spirit of compromise, but I think they’re on the wrong track. So looking at SOP 401, Mr Muller raised a couple of issues in respect of that, and in particular he said that what they want to do is for us to engage in efforts that do not threaten food production. Mr Muller said that we feed, I think, 43 million people worldwide. It is a significant number of people that we feed.

I’m not sure that we have a responsibility to feed as many people as possible. We certainly want to ensure that we produce food—it’s one of the things that we export—but it’s not clear to me that we need to continue producing food at that level. We do want to take our part in the world, we do want to contribute to the world, but not at any cost. So I’m just going to suggest that in terms of threatening food production, I think that is a misplaced concern. We do not need to feed only ourselves, but we can have a long and serious think about the extent to which we need to create as much as possible here for export if it comes at that cost of greater carbon. We are facing an existential crisis here, and we need to weigh those concerns up very, very carefully.

It’s a curious thing to me, because in terms of that “threatening food production”, on the one hand this SOP is saying that we have a responsibility to the world, but, on the other hand, in this very SOP we have a call to have that temperature limit set at something well below 2 degrees. So in the legislation as introduced, the temperature that we are going to try to limit our increase to is 1.5 degrees Celsius above pre-industrial levels. Now, that’s based on the most recent Intergovernmental Panel on Climate Change data. But the Opposition would have us set that target something well below 2 degrees. So on the one hand, when they say we shouldn’t threaten food production, they are saying we should be right involved in the world; on the other hand, in that very same SOP, they are saying we should retreat from the world. It’s a mixed-up, messed-up SOP, because it sends two messages there and they are contradictory messages.

What I want to suggest is that the appropriate message we should be sending to ourselves, and this links back to Mr Seymour’s SOP, is that we will do our part, but it is our part, not everyone else’s part as well. That is the point of ensuring that we use our carbon credits, that we use domestic carbon credits. It’s really important that we do that. That’s why we will do our part to get to that 1.5 degrees, because that is what we need. I just wanted to reflect on those two things.

I want to move on to another of the SOPs, the review of forestry assets. This is SOP 404, Mr Todd Muller’s SOP. What it’s calling for is a review of the use of forestry assets. Again, it sounds plausible, that we must always think about these forestry assets. Now, my reading of the bill as it’s come out of the select committee—and it is a shame that I wasn’t there to be part of it because I was enjoying that process—was that in actual fact these sorts of provisions are already in the bill. There is no need for this explicit clause on it. So, in clause 8, new sections 5Q(1)(c), 5Q(1)(d), and 5Z(2)(b)(ixa)—goodness, we get a long way on that—are going to meet in large part this review that’s suggested in this SOP. In particular, new section 5Z(2)(b)(ixa)—goodness, the people on that committee did work a long way down those numbers, didn’t they—was a recognition of the importance of land-use decisions for rural communities, that those concerns have been taken into account in this bill.

There is an important point around forestry, and we do need to think very, very hard not just about soaking up emissions by increased planting of trees—we can do that at the margins—but in actual fact we do actually need to reduce our emissions. We need to reduce the emissions from transport. We need to reduce the emissions from agriculture. Yes, with the use of forestry we can soak up some of the rest, some of the leftovers, by using forestry, but may I suggest that if we are to be serious about doing our part in the world for climate change, putting our shoulder to the wheel, doing our work, standing on our own two feet, then our target must be reduction, not just forestry, and if we take that seriously on board—I don’t think the forestry problems will melt away, but they will become much less significant.

This is an excellent bill and I commend it to the committee.

Thank you, Mr Chairman. I am pleased to be joining my National colleagues in supporting this important climate change bill. I want to give it a bit of a historic perspective in terms of the steps that it’s taking forward, want to touch a couple of areas where I’m concerned about the bill, and also want to strongly commend the work of colleague Todd Muller and, more recently, Scott Simpson.

When I had responsibility for this area of policy in the last Government, every single climate change bill was opposed by the Opposition—even bills that would make progress. I actually think the scale and the challenges of climate change are that as much as possible we should try and work across the House and as much as possible we should ensure that each Government is making steps that take New Zealand forward on this issue.

In our very first National Budget, we went out and set a policy of insulating 500,000 homes, because that was just a no-brainer in terms of making progress on climate change. In July 2010, we became the first country outside of Europe to impose a price on carbon, by introducing the emissions trading scheme. We followed that up with road-user charge exemptions for electric cars. We were big players internationally in securing the Paris Agreement, and I’m also particularly proud of the Kigali agreement around the very intense refrigerant-type gases and of initiatives like the cycleways. And, if there’s anything of which I’m proud of in contrast to previous Governments, it’s that for 30 years we’d had our emissions from the electricity sector growing, and in those Key-English years, we were actually able to increase the proportion of renewables from 65 percent to 85 percent.

Now, in 2016, I was quite taken back in meeting Lord Deben, or John Gummer, at an OECD meeting of environment Ministers and invited him to come out to New Zealand because I believed that a climate change commission was the next logical step for New Zealand to take. I commend the Minister in the chair, the Hon James Shaw, for picking that up, and the large parts of this bill are about putting the architecture of a climate change commission in place.

The reason I feel very strongly that it’s a good step forward for New Zealand to take is a level of frustration—as a parliamentarian who was present at the signing of the Framework Convention on Climate Change, back in Rio in 1992, during my first term in Parliament—that too much of the conversation around climate change is around setting the targets; too little of it is about the hard change. The reason, both in the world and in New Zealand, if you look historically at big bold targets being set and then them not being met, is actually because people haven’t been prepared to have the honest conversation about the costs and the impacts. It is my view that a climate change commission is not some magic answer, but it is a useful step forward in setting budgets and getting a more detailed and honest conversation about the changes New Zealand needs to make to reduce emissions.

There are a couple of areas where I do want to express some concern about the bill. Yes, I’m a nerdy scientist. It’s my view that the more honest we are as legislators, the more scientifically informed our farmers, our car drivers and everybody is about the challenge, the more likely we’re going to be able to carry the arguments to make the change.

I do not support this bill being called a zero carbon bill. It is scientifically and factually wrong. If there’s a frustration I have with the Green Party, it’s this idea of jumping with slogans. The problem is not carbon; the problem is greenhouse gases. Some people may say, “Well, what’s the difference?” Actually, the only reason planet Earth is so generously embodied with life is because of the existence of carbon. Carbon is a magnificent element. It’s what makes life possible. When you label a bill a zero carbon bill, you create the impression that somehow carbon is the problem. Carbon is not the problem; the problem is greenhouse gases.

Yes, the most important of those greenhouse gases is carbon dioxide—not carbon—but many of the greenhouse gases have no carbon in them at all. One of New Zealand’s big greenhouse gases is nitrous oxide. I say to members opposite: where is the carbon in nitrous oxide? Some of the most damaging greenhouse gases are gases like sulphur hexafluoride. Where is the carbon in that particular gas? The reason I would much prefer that bills were named honestly and informed the science is, in my view, we’re far more likely to make sensible progress.

I know why the Government’s called it the zero carbon bill. They want to create this impression that if we magically pass this legislation, wonderfully, the climate change problem has gone away. That’s a gross overstatement of what this bill will achieve. This bill will set up a good framework. It will help us make better decisions on this challenging journey of getting our greenhouse gases down. But, by calling it a zero carbon bill, in my view, it does not help inform the science. It does not help the public understand.

I get farmers talking to me and saying, “Well, why don’t we count the carbon dioxide that’s absorbed when the grass grows? Why is it that we’re so focused on methane?” Now, if you talk through the science, the reason is because methane—and when carbon is in that particular organic form—is a far more powerful greenhouse gas than if it is in the form of carbon dioxide. And, actually, if it’s in the form of plain carbon, it has absolutely nothing to do with climate change. So I make a plea that this would far more sensibly be called a “reduction in greenhouse gases Bill” or a “Climate Change Commission bill”, but to call it “zero carbon” is scientifically illiterate and does not help the debate.

I also want to support my colleagues around setting targets, and I will inform the committee of some of my debate that I’ve experienced around the setting of climate change targets. I remember at a previous election that one party said, “Look, you know, we’re going to aim for 30 percent reduction in emissions by 2030.”—the target that New Zealand adopted and we’re committed to through the Paris Agreement. And there were parties like members opposite that said 30 percent wasn’t nearly ambitious enough; it should be 50 percent. The biggest irony for me was the New Zealand First spokesperson said that 50 percent by 2030 wasn’t nearly embarrassing enough either; they were going to do 80 percent. And most members of this House would know: does that really match up with the level of change? Somehow, the bigger, the bolder the target, the more genuine you are about wanting to make progress on this genuine and challenging issue of climate change.

I think we need to be a bit more sophisticated than that. I do think it is really easy for this Parliament or some UN assembly to set big bold targets for generations miles ahead that won’t have any impact on them. I look, for instance, at the previous Labour Government. The Clark Government set a target of carbon neutrality. Actually, emissions went up by 12 percent during the last Clark Government. We did better during the Key-English Government, where emissions were down by 1 percent over those nine years—actually, a considerable achievement given the economic growth and the 15 percent growth in population over those nine years.

I’m more interested in the policies that are actually going to get those emissions down than us each having a contest about who can set the bigger target at some future date when we are unlikely to be here. I believe the amendments that have been moved by my colleague Scott Simpson show that we’re putting the cart before the horse. If we’re actually going to set targets in a more informed way, if we’re actually going to learn the lessons of what’s occurred internationally at repeated climate change conventions and in the political debate that’s occurred in New Zealand around targets, rather than just pulling numbers out of thin air—a billion trees; 100,000 homes; a 50 percent reduction in emissions; whatever it might be—let’s get an intelligent, scientifically, economically well-resourced organisation to be able to back up those targets. That’s where the sorts of amendments from my colleague Scott Simpson in my view would actually show that we’re learning from history, we’re actually improving how we deal with climate change, and, before we pull out big, bold numbers, that we actually back them up with some good science.

That is why National is supporting the Climate Change Commission. And we believe if we are going to set robust, cross-party targets, having set up the commission—and I must compliment the Minister on his choice of chair for that commission. That gives it the right sort of frame, in my view, and having entrusted that sort of intellect into the Climate Change Commission, we should use their expertise and we should help them set those longer-term targets, and that will be a far more robust way not just to get cross-party sign-up, but to actually give New Zealanders the confidence that we’re not just picking targets out of thin air, but have done the homework, done the budget, and have the policies that will actually enable New Zealand to make progress on this issue.

Thank you, Mr Chair. I just thought I would respond to a couple of the points that the Hon Nick Smith was making just now, which were around the name. He has raised this before and it may not surprise people there was actually a heated debate about the name of the bill, because we actually recognise that not only is it inaccurate to say “zero carbon” because, of course, carbon is only part of the equation—it’s carbon dioxide—but the issue was and, ultimately, we went with the name of the bill that was being promoted by the youth organisation Generation Zero. That was sort of the inspiration for the bill in many ways. We did play around with a number of other alternatives, but they became unwieldy and didn’t really communicate terribly effectively. So I take Dr Smith’s point that it doesn’t wholly or adequately describe what it is that the bill is intended to do. But I just wanted to reassure him that because it is an amendment bill, it will, of course, be placed within the Climate Change Response Act 2002, the name of which is not currently due to change.

Now, I will just turn my attention to one of the Supplementary Order Papers (SOPs) that he referred to. The Opposition have raised a number of SOPs and, obviously, during the course of the debate I would like to address each of them fulsomely. But I thought, given, I guess, the level of attention that the Opposition has on the methane component of the target, it would be worth just addressing that one first, because I know that you’re most vexed about that particular component.

So this relates to SOP 405—and there are a few things. First of all, you know, we actually did receive from the Opposition last year, when designing the bill in advance of introducing it into the House, a request that the Climate Change Commission actually consider the target. And so that is actually currently written into the bill. It says in new section 5P(1) inserted by clause 8, that the commission must, when setting the next emissions budgets from 2036, review the target. And so that is literally the request to kick it to the commission. So actually it is required to do that in the existing clause that’s there. And that is in there at the specific request of the Opposition.

Now, I know that for, you know, a lot of people the timing of that, which is early 2024—that it must report by early 2024—there is a concern that that there is too long, that it, essentially, extends a period of uncertainty in which people don’t know quite what the definitive number is going to be for 2050, particularly when it comes to biogenic methane. And so I just wanted to say something about that, which is that the next part of that section, which is section 5P(1)(b) also says that the commission must review the target “at any time the Minister requests a review.” And so I just wanted to note that if 2024 was felt as being too late, actually it can happen under the existing legislation earlier than that.

The second thing that I know that the Opposition has raised real concerns about is the provisional range of 24 to 47 percent, which was drawn from the Intergovernmental Panel on Climate Change 1.5 degree report last year, that that is the wrong range, or it’s too high, or, you know, it doesn’t meet with some of the science that the Opposition members have been referring to. It’s worth noting that in the legislation, when the commission is required to or can review the target, there is no requirement in the legislation for it to stick with that range. So if the Opposition is correct—that actually the science is that it should be a different number that’s outside the range that we put into the legislation, then it can do so completely unfettered. And so I wanted to say all of that for the sake of saying that we’ve actually heard those concerns and we have actually already built them into the legislation as it stands.

In terms of the specific SOP 406 that the Opposition’s put in there, I wanted to just say that I don’t think it’s appropriate to move it into regulations because it is so significant. One of the things that we are doing with this is that for the first time, we’re actually placing the emissions reduction target in primary legislation, and so to have half the target—essentially, the long-term gases target—placed in primary legislation but then the methane emissions reduction target placed in regulations is both inconsistent and we actually think it’s important enough that it should go into the primary legislation. Also, I wanted to say that in new section 5Q(2)(a)(ii) the commission can actually already recommend a change to the target if significant changes have occurred in the “scientific understanding of climate change:”.

So I’m just saying all of these things for the sake of saying that we’ve actually received those concerns and we feel that we’ve actually addressed them in the legislation and in changes that have come through as a result of the select committee process.

Thank you, Mr Chair, for this opportunity to take a call on this Climate Change Response (Zero Carbon) Amendment Bill, after that contribution about the name in this committee of the whole House. And it’s very poignant that I take a call at this point, having just come out of a meeting with the New Zealand Aluminium Smelters. This bill has significant ramifications for the province of Southland. We are already seeing the significant ramifications of this Government on the province of Southland, and they are extremely uncertain times for the people that I represent.

So, while I commend and rise in support of the contribution of all of my colleagues, and especially the Hon Dr Nick Smith, that it was a National-led Government that signed us up to the Paris Agreement, that it was a National-led Government that moved us forward with regards to reducing our greenhouse gases in this country, I do support the Supplementary Order Papers (SOPs) of my colleague, the Hon Scott Simpson, that we have a Climate Change Commission that is expert-led and that is empowered to set targets based on good research, good science, and understanding the technologies that are available to us with respect to industries, with respect to agriculture moving forward, and that we do this moving to reduce our emissions and offset the greenhouse gas profile at a pace that is fair, that is reasonable.

Just to recap, with respect to the uncertainty that is going on in Southland: a thousand jobs at Tīwai Point, two thousand indirect, 6.5 percent of Southland’s GDP, producing some of the cleanest aluminium in the world. And yet it seems at this point, especially throughout the select committee process, that this Government wants to pick winners and losers right now. And I don’t believe that is fair. I would rather be exporting clean aluminium than exporting jobs and livelihoods offshore.

I think it is prudent that the commission is tasked with looking at technologies that are currently available, that the modelling has to acknowledge what technologies are currently available, and that this way of life—our livelihoods in Southland—needs to be at least protected for a time until sufficient R & D is put in place to make sure that we can reduce emissions in that field; like I say, at a pace that will protect jobs and livelihoods. It’s a very uncertain time for Southland at the moment, and this bill adds to that uncertainty if it truly is not going to be a fair and just transition.

That brings me on to Mr Muller’s SOP 404, which is with respect to the review and use of forestry offsets. And, certainly, what was raised throughout the Environment Committee process was that that really is the panacea among what we’ve got to reduce our emissions profile—to offset it. I want to support Mr Muller’s SOP, in particular that the commission must review the use of removals from land use and land use change in the forestry sector. It must consider the social, economic, cultural, and environmental impact of activities undertaken for the purpose of generating offsets. My contribution in the second reading very much focused around this. It very much focused around this drive to plant our arable land in pines so as to meet these targets that are in the primary legislation—1.7 million hectares to be planted prior to 2050 and an extra 1.7 million before 2070 to attempt to maintain carbon zero. The social effect of this, as we looked at in the modelling, was to plant out the size of the province of Otago in pine trees.

The Paris Agreement, obviously, talks about the protection of food production. Again, there needs to be absolute consideration given to land-use change, to putting caps on forestation, and thinking about communities moving forward. As I said in my contribution last night, not everybody wants to live in cities. Not everybody wants to live in high-rise buildings. There are people that want to live off the land. There are people that want to live in the provinces and enjoy their way of life, but, equally, they should be given the opportunity to create jobs and livelihoods for their families. I mean, if we look at the agricultural sector: $45 billion worth of export revenue for this country; a significant industry and employing over 350,000 individuals. That’s significant, and it is a way of life. New Zealand is known as a reputable food producer; we are a safe food producer, and, interestingly, not all of us want to be vegan either. Sheep and beef, dairy—they still will be part of our future. I deny that it is a sunset industry, and I think that our farmers need to be applauded for the environmental efforts that they’ve put in place already.

So I think that we need to add in this SOP of Mr Muller to the primary legislation. I think that we need to make sure that there are clear guidelines that the commission must follow with respect to the offsets that are available at the moment through forestry, with respect to the technology available at the moment, and make it clear that the social, economic, cultural, and environmental impacts of the activity are taken clearly into account, using good science and measuring it in an appropriate and critical way. So while we supported the bill at second reading and we support a commission and this architecture framework that looks to lead us forward with a robust group of experts looking at the science, this bill does need to be strengthened by adopting the Hon Scott Simpson’s SOPs and Mr Muller’s SOP to make sure that it is robust and to make sure that many New Zealanders’ way of life is still secured moving forward, that food production is secured, moving forward, and that the so-called just transition is, in fact, just, moving forward.

Thank you, Madam Chair. I just want to thank Sarah Dowie for her contribution then; she is a staunch advocate for the people of Southland. On the point about the aluminium smelter—she raises some very good points about the impact on that industry, that particular plant, and, by extension, other plants around the country, like the steel mill and so on out the south of Auckland. And one of the things that she said was that she is worried about politicians picking winners and losers. Of course, the way that we’ve designed the architecture—well before I got here—was that the way to move to a low-emissions economy without politicians picking winners and losers was actually via the emissions trading scheme (ETS), and to ensure that the settings of that produced a price that companies would adjust to, and that would provide an incentive to avoid the price shift. Remember that the whole point of the emissions trading scheme or any scheme that puts a price on emissions, whether it’s a carbon tax or an ETS or anything else—the point isn’t to raise revenue, it’s actually to avoid paying the price, and the way that you avoid paying the price is by investing in low-emissions technology. And actually in the field of aluminium, right now, in Sweden and in Canada there is a hydrogen-based zero-emission form of smelting—

💬 Sarah Dowie: Expensive.

Hon JAMES SHAW —that is expensive, but you can see that that technology is starting to arrive. And so what I’m suggesting to her is actually that the bill that I introduced yesterday, the emissions trading reform bill, is actually the place where questions around the impact of ETS unit price, free allocation, and so on, in relation to the smelter in her area, are more appropriate.

However, she also referred to Supplementary Order Paper (SOP) 404, which is around a requirement for the Climate Change Commission to undertake a review on the use of forestry, and what we mean by removals from land use. Now, I just wanted to say that in our view, it’s unnecessary and, in fact, possibly dangerous to have that in primary legislation. And there are, actually, already provisions in the bill on forestry offsets versus actual reduction. This is one of those very rare areas where environmentalists and farmers are actually speaking with one voice, and we saw that reflected in the submissions that came through, which is about the concern that, essentially, industrial or transport emissions will be offset using forestry rather than being reduced; the sort of “get out of jail free card” for those industries and those sources of emissions.

The Environment Committee recommended changes which the Government has adopted, so I just wanted to point these out: there’s a new section 5Q(1)(c), which allows the commission to recommend changes to the target relating to greenhouse gases, emissions, and removals to which the 2050 target or part of the target applies. So removals in that context in New Zealand, right now, specifically means emissions sequestered from forestry. So the commission actually already has the ability to do what this is SOP is asking to do.

There’s also a new section 5Q(1)(d), which allows the commission to recommend how the target or part of the target may be met, including limits on removals or offshore mitigation. This was actually one of the points that the Parliamentary Commissioner for the Environment recommended, which is to say, well, if the commission is looking at placing limits on offshore mitigation, it makes just as much sense for it to be able to provide recommendations on limits to onshore offsets, i.e., forestry. So that’s been written in, in new section 5Q(1)(d), inserted by clause 8. Also, there’s a new clause 5Z(2)(b)(ixa), which requires the Minister, when setting emissions budgets, to have regard to “the implications, or potential implications, of land-use … for communities”, and she spent much of her speech referring to the impacts or the potential impacts of land-use change on communities.

Now, I wanted to just mention that, yes, there has been afforestation recently, and just for some numbers: in 2018, approximately 9,000 hectares of new forest were planted. We think that in 2019, it’ll be something in the vicinity of 10,000, maybe up to 30,000 but more likely at the lower end of that thousand hectares—

💬 Hon Nathan Guy: What was that? 10 to 13?

10,000 to 30,000 hectares. I just wanted to point out that over the past decade, 70,000 hectares was deforested primarily for conversion to dairy. So we’ve had 10 years where 70,000 hectares was cut down and converted to other land uses. That is actually one of the reasons why our net emissions have gone up, because we have deforested large areas of the land, and so we’ve removed that sequestration potential to convert it to food production, essentially. You have to remember also, I mean, if you’re speaking historically, that there was colossal deforestation after colonisation, right? Almost the entire country went from being forested to unforested over the course of 120 years. So land-use change has always taken place in New Zealand. Now, we understand that when it takes place, that does have an impact on communities and on the economy, both in terms of exports and the domestic economy and so on, which is why these new clauses were written into the bill, particularly this one about the importance of land-use decisions for rural communities.

The other thing that I wanted to say is that we don’t think that it’s appropriate to set hard limits on forestry offsets now in primary legislation without policy work to determine what those limits should be. To Ms Dowie’s point, if you immediately remove forestry as an offset option for industrial emitters, that actually will drive up the ETS unit price for the aluminium smelter, because it’ll have fewer options on where to go to offset its emissions. So there is a significant impact in the other direction for the rest of the economy of doing it that way, and so we think it’s important that the commission, as the Opposition have said, takes the time and is able to consider all these matters more fulsomely than during this particular process, where, obviously, we haven’t had the opportunity to do that.

Now, I do want to say that we did draw heavily on the advice from the Parliamentary Commissioner for the Environment. Our understanding is that he does support the changes that were made by the Environment Committee and introduced into the legislation. Just in relation to Supplementary Order Paper 404, again, we actually do hear the concerns, and we believe that we have addressed those concerns in the amendments that have come through the select committee process.

Thank you, Madam Chair. I just popped up, didn’t I?

💬 Kieran McAnulty: She’s delighted.

I am delighted. Look, I want to talk on a couple of matters—

💬 Kieran McAnulty: Go, Angie!

Thank you—I will go, Kieran McAnulty. The first is the Supplementary Order Paper 404 in the name of Todd Muller. I appreciate the Minister for Climate Change’s explanation about the 70,000 hectares, did you say, sir, that has been deforested versus the 10,000 to 30,000 hectares potentially being planted. It’s a really interesting point and a perfect example, I believe, of why we have created this piece of legislation in the way that we have. You see, the way that we’ve created this legislation is to enable science, to enable changes, to enable the reality of the day-to-day lived experience of people to be built into this piece of legislation.

We—and I said this in my second reading speech—don’t know what the future will hold and what technology is available and what things may come into play. As a consequence, we had a very detailed conversation, a very detailed conversation, because we heard lots of people concerned about afforestation and what impact that was having. So we had this very detailed conversation about: should we put some hard-and-fast rules in this legislation? Should we do that? Should we ensure that we don’t want an adverse or unintended consequence to occur? We came to the conclusion that the experts should do that. We came to the conclusion that, actually, there is a whole pile of things coming at us that are exciting and interesting, but they are not necessarily things that we should put in primary legislation.

I note in here that in new section 5ZIA(2)(b)(i), he’s talking about—oh, I’ll say (b) and then I’ll go to point (i): “scientific and technical research into the warming and cooling impact of radiata pine forests and any other relevant forest species, including but not limited to—(i) changes to the earth’s albedo”. Now, these are very specific things that he is asking for, and the reality around that is that we don’t want to lock this legislation down in this way. We don’t want to have this legislation at the point that we’re asking for specific things, because technology is shifting and changing all the time. We heard some really interesting science around terpenes. We heard some really interesting science around pine trees and the nature of pine needles. We heard regenerative farming methods. We heard all about different options. We decided absolutely not to put that stuff into primary legislation because our experts, our commission, will take into account those things.

So that is why I do not agree with the Supplementary Order Paper 404 in the name of Todd Muller. Again, I acknowledge that, genuinely, he has wanted to make a very good contribution, but, unfortunately, he missed the detailed and thorough conversations that we had about this in the Environment Committee as to why we got to where we got to. But I do thank him nevertheless for his participation.

The second matter that I wanted to talk to is Supplementary Order Paper 401 in the name of the Hon Scott Simpson. He has put in an amendment that, essentially, talks around that this should not occur in order to threaten food production. I wanted to just bring a little balance to the conversation. The member Dr Deborah Russell had said quite clearly that perhaps we don’t need to continue to create as much food or produce as much food. I take a different view on that, and my view is this: 40 percent of all food produced in this world goes to waste. It goes to landfill.

Thank you, Madam Chair. I rise to speak on the zero carbon bill, and in this contribution I want to particularly highlight some of the Supplementary Order Papers (SOPs) that National has put forward. I do so in the context of what previous speakers have acknowledged has been an 18-month process, where parties across the House, and in particular National, Labour, and the Greens, have come together, recognising that an independent, expert-led Climate Change Commission is a good idea, that having some enduring targets for how we reach our Paris Agreement obligations is a good idea, that having an enduring framework for addressing climate change and for considering the economic impacts of the actions we take—all of these are good things, and in the spirit of agreement over those objectives, we’ve come together to work on this bill.

But it is still a bill that could be improved further, and I want to draw the members of this House’s attention to SOP 401, which relates to the purpose clause of the zero carbon bill. In doing so, I first want to quote from the Paris Agreement, because that’s where all of this starts. When we signed up to the Paris Agreement in 2016, we were signing up to an agreement that explicitly says that in being parties to the United Nations Framework Convention on Climate Change and being a party to the Paris Agreement, we would recognise—and I quote—“the fundamental priority of safeguarding food security and ending hunger”. We also acknowledge “that climate change is a common concern of humankind, [and] parties should, when taking action to address climate change, respect, promote and consider their respective obligations on human rights, the right to health, the rights of indigenous peoples, local communities, migrants, children,” and so on.

The relevance of these clauses in the Paris Agreement, and what this SOP wants to do, is to emphasise that in meeting our goals under Paris, we should do so in a way that takes into account and in a manner that does not threaten food production. The reason for that—

💬 Dr Duncan Webb: That’s not what it says.

NICOLA WILLIS —is actually very practical, Dr Webb, because the reason for that is that we will not make the maximum contribution we can to climate change if we simply reduce how much food we produce here so that countries elsewhere in the world produce it in a more intensive-emissions way, or if we do it in a way that results in increased global hunger and, therefore, a reluctance by developing countries to make any contribution to climate change at all. If we want this to genuinely be an enduring and sustainable piece of legislation, it needs to be practical and it needs to ensure that New Zealand truly maximises its contribution.

I would argue, as an optimist, that if we think about our contribution to climate change in terms of doing things in a manner that doesn’t threaten food production, then that’s when we say, well, let’s emphasise the role we can play in agricultural R & D, in finding new ways of producing food that are less emission-intensive, of embracing technologies that allow food to be produced in a lower-emission way. So it is important that the bill reflects that principle in its purpose statement and that it is therefore interpreted in that way, and that is why this is an important SOP, because it fundamentally recognises the intrinsic relationship between the actions we take to reduce emissions and our contribution to feeding the world.

Look, before I move on from that SOP, I do want to quite explicitly ask the Minister in the chair who’s with us, James Shaw, and who has been answering questions as they’ve come up in this debate: why would we not? Why would we not include that commitment to food production in the purpose statement—given it sits right there in Paris, it’s not something that I think anyone contends with as something that New Zealand should contribute to. Why would we not include it there? I would ask, respectfully, that Minister Shaw address that.

The second SOP that I want to discuss in some detail is SOP 404. This relates to our desire to see a review of the use of forestry assets explicitly included in the bill. Other speakers have done a good job of talking about why that’s necessary, and some of the advice that the Environment Committee received about the potential impact of the bill on forestry incentives. But in particular, I want to draw members’ attention to proposed new section 5ZIA(2)(c) in this SOP, which says that we think that we should be considering “the degree to which the use of offsets generated from removals from land use, land use change, and the forestry sector”—[Time expired]

Thank you, Madam Chair. In my contribution, I’d like to focus on the 2050 targets, but also we’ve had a number of Supplementary Order Papers put up today which actually—what they’re aiming to do is actually already addressed by the bill as amended. So what I’d like to do is just point out some of those areas where the bill actually does what they’re hoping to achieve. I think the first one, looking at methane targets—we’ve already had a lot of submissions in this area, and some of them did indeed suggest caution; say, Fonterra, who were saying that the 2050 target for methane reduction is very ambitious and will be extremely challenging. They were supporting a 2050 methane target provisionally set at 24 percent.

But, equally, on the submissions, we had the other side. Many of our young people were advocating for much more rapid action in terms of our methane targets. For example, Forest and Bird also was saying that, basically, we’ve wasted 30 years and it’s already too late to avoid some of the impacts of climate change. What they were talking about is stronger leadership. For them, what they were asking for is gross emissions of biogenic methane to be at least 20 percent less than 2017 emissions by 2030, and at least 40 percent less by 2040—so, on the other hand, saying we need to go much more quickly.

So the question is, coming back to the legislation as amended, what does it actually say? Basically, what it says is that the commission must review the 2050 target when preparing advice on setting emissions for the budget for the period beginning 2036. That is in 2024. So we do need to, and there’s a requirement to look at it then. But, then, looking at what recommendations they can make as a result of that review is actually incredibly broad. It allows that Climate Change Commission to make a number of recommendations: the time frame for achieving the 2050 target but also the level of emissions reductions required by the target; looking at greenhouse gases, emissions, and removals to which the target applies; and also how the 2050 target might be met, including limits on removals and offshore mitigation. So there are a lot of things there that they actually can provide some advice on in terms of how we could move forward.

But, then, looking further, it is allowing a lot of other scope for some safety valves in the legislation, because what it says also, in new section 5Q(2)(a) set out in clause 8, is that the commission may recommend a change to the 2050 target only if “significant change has occurred, or is likely to occur … in 1 or more of the following,” but the actual range of “1 or more of the following” is extremely broad. What it includes is global action—so how we are comparing in terms of our actions to what’s happening overseas, so that we’re actually making our contribution, but the impacts potentially on our economy if others aren’t. We can take that into account. It also takes into account scientific understanding of climate change and how that will move over time.

Incredibly important, too, is New Zealand’s economic and fiscal circumstances and also social, cultural, environmental, and ecological circumstances. What this is looking at is potential impacts on jobs, potential impacts on our economy, so these things can be taken into account when looking and moving forward in terms of our 2050 target—so, incredibly broad scope in terms of some of those things they can look at.

And so, as Environment Committee members on the Government side, we were happy with those targets as introduced, because, basically, that 2050 methane target was originally set with reference to the Intergovernmental Panel on Climate Change’s report about staying within 1.5 degrees of warming. Also, these targets we’re wanting in primary legislation rather than in regulation, because we need to be able to provide clear signals about where we want to go in terms of emissions reduction goals and, in particular, providing that certainty not only for businesses but also for sectors—for the primary sector—needing to know that, actually, it is going to require some significant research and some significant thinking before we go and change that, because people make their settings based on what we’ve signalled. So it was really important for us to have that set in the primary legislation, but also, basically, there is the opportunity for that to be reviewed in 2024 and also at any other time the Minister requests.

We’ve also had some suggestions around restricting forestry offsets. This came up also in some of the submissions. Submitters were concerned that relying so heavily on forestry offsets was risky because, basically, we’ve got risks of fire, pests, other climate impacts, and what that might do to forestry. Also, some of the submitters pointed out the fact that, if we’re completely offsetting with trees, it allows us to go on and continue with our emissions profile. And so, basically, the sense was: should we limit it, because we need to make our contribution in terms of reducing emissions?

Thank you very much, Madam Chair. I hoped to have had a response to my earlier speech promoting the amendments on Supplementary Order Paper (SOP) 406. I’m not sure if the Minister in charge, the Hon James Shaw, may have had time to do that. I, unfortunately, couldn’t be here—if he had—and the reason was that Dr David Clark had attempted to rebut my speech. It was so bad—I hate to admit it to you, Madam Chair—that I briefly lost my faith in parliamentary democracy and I had to leave. But I’ve got considerable faith in the institution, so I’ve come back. What Dr David Clark seemed to say was that because the Stern report said that it was better to make emissions reductions earlier rather than later, there should be a restriction on New Zealanders purchasing emissions reductions from schemes offshore.

Now, not only is that a non sequitur but it reveals his misunderstanding of the Stern report. You see, I’ve followed this debate for a very long time, and one of the problems with the Stern report was its total failure to build in any kind of depreciation or any kind of allowance for the future value, the discounting that occurs as technology progresses and people have better ways of meeting their needs in the future. So, even if his response had engaged the points I made, which sadly it didn’t, then the premise he was using seemed to reveal a misunderstanding of the report that he was quoting. It seemed that he was just grasping at any issue that he could think of.

So, I hope that we get a slightly more considered response, because I think the amendments on SOP 406 are actually very sensible ones that would allow New Zealanders to meet their environmental goals for less cost or make a greater contribution to emissions reduction, or at least the concentration of carbon dioxide equivalents in the atmosphere for a given cost.

I also, being a hard-working and busy member, have tabled yet more amendments on my tabled SOP, at the time 5.07 p.m. So this is hot off the press! It very simply asks—

💬 Hon Scott Simpson: Late off the press.

Well, it was such a simple thing that I didn’t quite get around to it, Mr Simpson, but it simply asks that those new sections 5ZD, ZE and ZF, set out in clause 8, be removed. It’s quite simple; people might—Deborah Russell is reaching to see which sections they are. Those are the sections, I can tell Deborah Russell, that actually—

💬 Dr Deborah Russell: I can read for myself.

Well, I’m telling everybody, not just Deborah Russell. Those are the sections that are actually—

💬 Dr Deborah Russell: Mansplaining.

And there we have the sexism. They’re accusing me of mansplaining. They would not accuse a woman of that, and I regard that as a sexist attack on me.

But, in any case, the fact of the matter is that those sections—5ZD, 5ZE, and 5ZF—provide for the Minister the power to publish strategies that affect how different sectors will combat climate change, and I think this is incredibly worrying. It introduces an unnecessary level of bureaucratisation and politicisation into the economy that this country, really, rejected 35 years ago when we got rid of the Economic Stabilisation Act. I see Nick Smith; he was almost here at the time. We got rid of the Economic Stabilisation Act because we didn’t want the executive, we didn’t want the Government, to be able to say what prices should be or how much of something a particular industry or sector should be allowed to do. We found that that overly politicised the economy, it led to absurdities, it led actually to borderline corruption as people tried to get politicians to do favours for their particular industry or stop them from making decisions that would prejudice their particular industry. Those sections asking a Minister to make such a strategy for emissions reduction could decide whether an industry lives or dies—a steel mill at Glenbrook, an aluminium smelter at Tīwai Point, for instance. The future survival of those could actually be defined by whether or not a Minister allowed them enough credits in his strategy.

I don’t think that we need to have that level of centralisation of power to achieve the goals. So this amendment would simply delete those sections. Of course, Parliament could still choose to legislate such things, and Parliament is the right place to do that; it shouldn’t be down to, frankly, the “King Henry VIII” powers of a Minister. Thank you, Madam Chair.

I thought, given that the member David Seymour has specifically asked for a response and I haven’t yet had a chance to do a response to his earlier Supplementary Order Paper (SOP) 406, I’ll do that and then also just refer to his SOP 407 as well.

So, in relation to SOP 406, what he’s concerned about is that placing limits on the use of international units will drive up the cost of domestic emissions reduction. I just wanted to say that the existing legislation actually already has provisions for the commission to make recommendations considering the economic impact when it uses its emissions budgets and in making its recommendations about any limit to offshore units. So in clause 8, new section 5L, matters that the commission must consider, includes “(f) responses to climate change taken or planned by parties to the Paris Agreement”—so that’s a sense of what other countries are doing—but also, under (c), “the likely economic effects;”. And so that’s a mandatory consideration that it has to take in account. In addition, new section 5X provides—and I think this is the clause he was referring to—for the Climate Change Commission to advise the Minister on “(e) the appropriate limit on offshore mitigation that may be used to meet an emissions budget, and an explanation of the [unforeseen] circumstances that justify the use”.

So the point is to try and drive change in the domestic economy, and, in order to do that, you have to prioritise that in some way. But those clauses do actually provide for the kind of advice which would say that, actually, the use of offshore units should be different because we think that the—you know, he was sort of catastrophising about that, that it could be catastrophic. So I don’t think that SOP 406 is necessary. I think that the concern is provided for already in the legislation.

In relation to SOP 407, giving the Minister untold power to destroy industries one by one in New Zealand, I also read the Rodney Hide column in the National Business Review where he said that this bill would make me the most powerful person in New Zealand, with that kind of godlike ability. Frankly, I wish! But it just doesn’t do that. And so what he’s doing in suggesting that we remove those clauses is actually to gut probably the most important part of the bill, which is the plan to reduce emissions production. Without it, it’s just a target and a commission with no plan to actually reduce emissions. I would just invite the member to reflect on the UK legislation upon which this piece of legislation is modelled. Actually, it is the presence of the plan that has driven change in the UK economy. They have seen over a 40 percent reduction in emissions and, at the same time, their economy has grown faster than any G20 country. So the idea that having an emissions reduction plan will somehow destroy industries and so on, I think, is a real fallacy.

The other thing is that he is conflating having a plan with emissions trading scheme (ETS) unit supply. It is not the same thing. So, for example, if you look at the UK plans, the commission recommended early on in its first two emissions budgets that the kind of low-hanging fruit where the technology was available at lowest cost was to, essentially, get rid of the coal-fired power plants and replace them with renewables. They were going to get huge gains at the lowest cost in the economy; the Government then developed a plan to do that. They then did that. Emissions fell and the economy grew. Whereas what he was saying in his speech in relation to that SOP is that those clauses give the Minister the power to assign ETS units to particular industries or even particular companies. It doesn’t.

But I would invite the member to engage again, as thoughtfully as he has in this process, with the ETS reform amendment bill that we introduced into the House yesterday, because that does discuss ETS unit supply and how that could be set in the future, once that scheme has been reformed.

Thank you very much, Madam Chair. I apologise to Duncan Webb; I know he always has such useful things to say.

💬 Dr Duncan Webb: Do you yield, Mr Seymour?

Well, I could, but I’ll let him into a secret: what I just said wasn’t sincere.

Thank you to the Minister for Climate Change for trying to answer my questions. I think he, in a way, has brought out some of the problems with his legislation. He started out by saying that we shouldn’t be concerned about the restrictions on the importation of foreign credits or using offshore mitigation measures because the legislation will allow it as much as it’s necessary.

It’s a case of trying to eat one’s cake and have it too. You know, either it is the case that the legislative instruments in his bill will allow people to freely use the most competitive possible units from around the world—in which case, he should support my amendments on Supplementary Order Paper 406 and just say, as that amendment says, people can use amendments from here or overseas so long as they are of sufficient quality; if that’s really his position, he should support the amendment—on the other hand, if the Minister in charge, James Shaw, believes that, really, the bill is going to achieve the other thing that he claimed, that, actually, these restrictions on using offshore credits will force people to absorb costs of using domestic credits so he can achieve other policy objectives, then, really, he may not want to support my amendment, but he has completely underlined the need for us to have it.

So he can’t have it both ways. Either New Zealanders are going to be forced to use New Zealand credits and emission reduction initiatives at higher costs—in which case, you know, that’s his position, he’s placing costs on people—or they’re not. If they’re not, then he should support my amendment; if they are, then he should be open about the fact that New Zealanders are going to pay more to achieve the same environmental outcome for, frankly, political reasons.

The second response from the Minister, I felt, suffered from the same difficulties. He rather mischievously attributed my position to Rodney Hide. Well, actually, I don’t think Rodney Hide’s written a column about this particular topic. He may have been referring to Bryce Wilkinson, an economist at The New Zealand Initiative—and I do think that they’ve done a very good analysis.

But, again, the claim by James Shaw was that, well, this bill won’t really give the Minister control over what industries do or how they behave. The evidence that he presents for that is that the UK has had its economy changed but, none the less, has grown. And then he says, “Actually, it’s really important that these clauses stay in the bill”—that they’re not removed, as my amendment would remove them—because he wants to have the power to control the economy. So, again, we’re left to ask ourselves: which one is it? Does the bill give him the power that he wants to keep or is he happy for my amendment to remove those sections that he says don’t give him the power? He can’t have it both ways, but, again, he’s attempting to eat his cake and have it too.

And, of course, he says, “But the UK economy has grown faster compared with the rest of the G20.”; well, there’s a range of reasons for that. At best, he can claim that their carbon legislation hasn’t prevented them from growing—but, actually, there might be a good explanation for that. In comparison with New Zealand, if we look at the UK’s emissions and carbon dioxide equivalents per dollar of GDP, well, actually, they’ve declined, but no faster than New Zealand’s. So, again, he can’t have it both ways. Either the legislation gives him these powers but they’re ineffective or it doesn’t give him the powers—in which case, he should be happy to accept the amendments that I’ve put up.

The Minister would love to have it both ways, but he can’t. The safer thing for New Zealand is to support my amendments and not give any Minister the power—because, you never know, a less responsible one might come along.

Thank you. I leapt to my feet on this occasion, because I did want to invite the Minister for Climate Change, James Shaw, to comment on the relationship between the provisions of the bill and the Paris Agreement. It strikes me—and it’s just disappeared from in front of me, which is timely—that the member Nicola Willis was citing from the preamble, whereas in respect of issues of food security, and, of course—

💬 Kieran McAnulty: Is that as far as they got?

—we understand—she may not have read any further than that, I don’t know—the importance of food security. But my understanding of the agreement is that food security is really about adaptation and the need to make sure that for particularly those low-lying nations facing the perils of climate change, that they’re assisted. Really, Article 2 of the agreement, which is in front of me—

💬 Todd Muller: Paris Agreement. Read it all out.

—yes, I could if you want; if you can’t read, I’m happy to read it for you—really sets out, and the relevant clause is Article 2, 1(b), the objective, including: “Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that [doesn’t] threaten food production;”. Now, we understand that the agreement is going to become, ultimately, part of the legislation when we address the emissions trading part as well. I think it’s important to recognise the interrelationship between both the international framework and also what’s happening domestically. Now, obviously, it strikes me that in applying the legislation, the agreement itself should be taken into account. And in so doing, it appears to me that throughout the bill there’s an ability, particularly around the adaptation side, to take into account food security, notwithstanding the protestations from the other side.

So I would invite the Minister not only to address that food security question but also to address the issue of the exact relationship between these two documents, because, obviously, we’ve made clear our 1.5 degree ambition, whereas in the Paris Agreement, it’s less clear, it talks about 2 degrees but an ambition for 1.5.

The other point I would invite the Minister to reflect on in this Chamber—because there was a lot of discussion at the Environment Committee around the need for accountability in respect of budgets, and, obviously, there were discussions and submissions around them being binding, around the Climate Change Commission operating similar to the Reserve Bank—the Environment Committee, ultimately, thought it could be for this House to scrutinise particularly those budgets that the Minister would present. You may be aware that the Environment Committee wrote to the Standing Orders Committee to suggest, in fact, that that ought to be accommodated. I’d be interested in the Minister’s view of whether (a) that’s appropriate and he supports that, or (b) whether he think it’s going too far, because I do think accountability is important.

You’d be aware that there was quite some truncation of reporting periods, and a lot more tightness around when the various documents have to be tabled in Parliament, when they have to be notified and gazetted, and when they have to be responded to. We see not only the budgets themselves as important but the real transparency and accountability there.

So, in respect of that, I’d be interested in the Minister’s views on whether the kind of procedural machinations in the bill are satisfactory, whether they go far enough, whether indeed they’re too onerous—because we see what goes on in this House and the ability not only of select committees but of open and transparent debate in this House; they’re sometimes, Minister, challenging debates, whether it be from one side of the House or whomever’s in Government—and whether in fact that kind of scrutiny is something that the Minister would encourage.

Thank you, Madam Chair. It looked like you were looking somewhere else. I just wanted to pick up absolutely on—

💬 Hon Scott Simpson: Desperately trying to spare us.

Whoops. Ha, ha!

💬 Dr Deborah Russell: That wasn’t very nice.

That wasn’t very nice, the Hon Scott Simpson—that wasn’t very nice at all. I’ll carry on. I just wanted to pick up on the member David Seymour’s recommendation—

Chlöe Swarbrick: Don’t do that.

—around the removal of—or just in terms of refuting it, actually—new sections 5ZD, 5ZE, and 5ZF, set out in clause 8. Particularly, this is following on from the conversation from my colleague Dr Duncan Webb. It is around new section 5ZE, “Commission to advise on emissions reduction plans”. Now, this is keeping in mind that the member wanted to have this removed.

Sitting suspended from 6 p.m. to 7.30 p.m.

Thank you, Madam Chair. So, before the break, I was just talking in regards to new sections 5ZD, 5ZE, and 5ZF. In particular, I want to just draw the committee’s attention and those who may be fascinated and listening at home to a part of the legislation that I think is particularly useful, and, in fact, counters some of the hysteria we have heard in this Chamber tonight about closing down industries and not taking into account people, really.

I’d just like to talk about new section 5ZD, the requirement for an emissions reduction plan. At subsection (3) of new section 5ZD, I will just read out this part, “The plan must include—(a) sector-specific policies to reduce emissions and increase removals; and (b) a multi-sector strategy to meet emissions budgets and improve the ability of those sectors to adapt to the effects of climate change; and”—and this is one that we had lots of debate on when we were coming to this piece of legislation; it specifically addresses the concerns that some industry may have—“(c) a strategy to mitigate the impacts that reducing emissions and increasing removals will have on workers, regions, iwi and Māori, and wider communities, including the funding for any mitigation action; and (d) any other policies or strategies that the Minister considers necessary.” We also included employers in that aspect so that the Minister is not only going to be looking at how to achieve these emission plans but also very clearly taking into account the needs of our people and our industries as we move forward. So I wanted to just address that. I do say to the member, David Seymour, by removing that clause in its entirety, we remove the ability to focus and look clearly at the impacts that the community may have.

Now, I’d also like to now come back to Supplementary Order Paper (SOP) 401, which is around food production. In my last contribution I had begun to speak on food waste. It may surprise this committee to know that if food waste was an emissions country it would be the third largest in the world behind the USA and China. So food waste contributes a huge amount to methane, in particular. It is important that when we look at food production that we actually look across entire systems of food. So one of the things that I do think it’s important to say is that the Supplementary Order Paper 401 doesn’t address the ability to adapt to the adverse impacts of climate change and foster climate resilience. We have to lower greenhouse gas emissions but we have to do it in a way that doesn’t threaten food production. So when we have 40 percent of the food being wasted in this world then I think we have a little bit of room. Thank you, Madam Chair.

Thank you, Madam Chair. I think what I’d like to do now is just to run through the Opposition Supplementary Order Papers (SOPs). I’ve spoken at some length to some of them. There are some that I haven’t addressed. I think it’d be useful if I just kind of ran through them in sequence just to give a response.

So SOP 401 is about replacing the purpose section. It actually does two things. Most of the speeches have been referencing the Paris Agreement on food production, the clause on food production, but the SOP also does something else, and that is that it references the 2 degrees upper limit in temperature and de-emphasises 1.5 degrees. That’s because when the Paris Agreement was written there was this kind of zone of uncertainty, really, between 1.5 degrees and 2 degrees, which was considered acceptable. Of course, one of the things that the Paris Agreement did was set up the process by which we got last year’s report from the United Nations Framework Convention on Climate Change on 1.5 degrees, which really clarified why it is that 1.5 degrees is actually the maximum level that we can shoot for. It was a watershed moment. I mean, it really did change the way that we thought about the temperature target. That was why we wrote 1.5 degrees into the legislation. Actually, you can compromise on a lot of things in this legislation. We actually have compromised on a lot of things in this legislation, but as long as the purpose remains to live within that envelope of 1.5 degrees, that really shapes everything else.

The other thing is that the Paris Agreement itself says that, you know, we aim for lower than 2 degrees and pursue efforts towards 1.5 degrees. And, of course, what we’re doing here is we’re writing a domestic law to reflect the Paris Agreement. What that means is if you’re pursuing efforts towards 1.5 degrees then your goal has to be 1.5 degrees, because if it’s kind of well below 2 degrees, but not 1.5 degrees, then you’re not actually aiming for 1.5 degrees. In other words, you’re not actually pursuing efforts towards 1.5 degrees. So that was why we wrote that the way that it is. It is to say we are pursuing efforts towards 1.5 degrees—that is the goal; that is what we are intending to shoot for.

The other thing that I just wanted to point out about this SOP, and Mr Muller actually raised this in his own speech, is that not through this bill but through the bill that we introduced yesterday, the emissions trading reform bill, we’re actually going to incorporate the entire Paris Agreement into the Climate Change Response Act alongside this bill. What that means is the reference to food production and the adaptation clause of the Paris Agreement becomes part of the canon of law inside the Climate Change Response Act. Now, that is significant because, of course, whether you’re, an absolute dyed-in-the-wool environmentalist or you’re a farmer who’s concerned about needing to maintain food production, or anybody else, frankly, there’s always been the suspicion that one side or the other is cherry-picking clauses or bits of language from the Paris Agreement to suit their own interests.

So, actually, to include the entire text of the Paris Agreement in whole in the Act just cuts all of that noise out. It says, “This becomes part of the law itself.” Therefore, any good lawyer can point to that to say, actually, the reference to adapting to the effects of climate change with a need to preserve food production—it is in there. It’s actually going to be in the Climate Change Response Act as a result, I admit, not of this bill but of the Climate Change Response (Emissions Trading Reform) Amendment Bill that comes in subsequently. So I want to say about SOP 401 that we agree with the intent of the SOP, or at least in part with the intent, and we believe that it is currently covered by the amendments that have been made either in the original legislation as it was introduced into the House or subsequently during the select committee process.

I’ll move on to SOP 402, which is about requiring the Climate Change Commission to review achievability of 1.5 degrees in 2024 and ensure that New Zealand efforts are in line with other developed countries. I haven’t addressed this yet, so Madam Chair—just looking at the clock—if you wouldn’t mind extending me the courtesy, I’ll just speak to this one as well. Thank you very much, Madam Chair. We actually do not agree with the intention of this one. Now, I think what the Opposition—they make a point about needing to track our climate action in line with a kind of comparison group of countries, trading partners, other OECD countries, and so on. That is fair enough; however, the effect of this is that, for example, if, say, a large North American country was to pull out of the Paris Agreement and go in the other direction, what this SOP would do would tie our action on climate change to their lack of action and then go in the other direction. In terms of the way the SOP is written, that is what it says that you have to do. So I accept the principle that, you know, you don’t necessarily need to be the first, right—the one country that is out in front. We do want to be in that group, however, and we do want to be in that group of countries who are, particularly OECD countries, a comparison group.

The other thing, of course, is that the Paris Agreement itself says that you actually can’t downgrade your ambition. You can only ratchet it up. That applies to every country in the Paris Agreement. It’s perhaps why the United States pulled out. So the effect of the SOP, the way it is written, actually would be contrary to the Paris Agreement itself. So I understand the intent. I see what’s trying to be done—

💬 Hon Nathan Guy: Do you agree with the intent?

—but actually, the way that the SOP—well, actually, I do agree with the intent, and that is already in the legislation, because—[Interruption]—amongst the mandatory—no, I’m not kidding—considerations that the commission must pay attention to, global action is one of those considerations, and that phrase is literally there at the request of the former spokesperson on climate change, Todd Muller, who did talk about how we needed to coordinate our action with comparison countries and trading partners. So you’ve won that one. You’re already there. You’ve gotten over the line on that one.

Next up is SOP 403, which is about emissions budgets to be split gas. So again, the commission, in the existing legislation, has the ability to distinguish in its advice about how it sees the different gases playing out. The difficulty is, and this is an economic point, that if you develop separate emissions budgets for each gas, it’s sort of too defined and a level of inflexibility that could actually end up driving up costs in the economy. So you actually need budgets to be seen as a whole, but it is useful in terms of new section 5X(1)(d)—it does say “the proportions of an emissions budget that will be met by domestic emissions reductions and domestic removals, and the amount by which emissions of each greenhouse gas should be reduced to meet the … emissions budget and the 2050 target;”. So, again, I understand the point that you do want to be able to see what needs to happen within each gas group. The language is already in the bill, but you don’t want to introduce the level of inflexibility that that SOP provides for.

SOP 404, which is the requirement on the commission to undertake a review of forestry removals from land use—as I said more fulsomely before, we believe that this is unnecessary in the primary legislation and, actually, the three clauses that were added during the select committee process in response to both submissions and the submissions that the Parliamentary Commissioner for the Environment (PCE) was putting in actually addressed these points, and also the importance of the new clause on the importance of land-use decisions for rural communities. So we agree with the intent, and, again, we think that the existing amendments that were introduced in the select committee process actually addressed that concern as it is.

SOP 405, which is for the commission to recommend the methane target with the overall framework to net zero by 2050, with the actual target being set by regulation—again, I’ve addressed this point more fulsomely. We don’t think that it’s a good idea to have that in regulation because then you end up with a target half in primary legislation and half in regulation. But like I said, the Minister can trigger a review of the target at any time—

💬 Hon Nathan Guy: When are you thinking?

—so, in fact, that 2024 date—happy to have a conversation about that with the member later. Also, the range—recognising that that is a concern—isn’t fettered in any way by that, and there are mandatory considerations that they have to pay attention to.

So those are the five SOPs that we’ve received from the National Party. We also received 406 and 407 from the ACT Party. As I said in response to David Seymour before, we believe that the considerations he has about the economic impact of constraints on international units are actually taken care of in the existing legislation as a result of the mandatory considerations that the commission has. And 407, which was to remove the emissions reductions plans, frankly, is the most ridiculous provision, because what it says is that you can have a target but you can’t have a plan. In fact, the whole point of all of this is to have a plan. I think, actually, it might have been Mr Muller before who said—or one of the Opposition MPs was saying—you know, if you just spend all of your time setting targets—sorry, it was Dr Nick Smith. Dr Nick Smith was making the point that if you spend all of your time arguing about what the target should be and you have no provision for any plan to achieve that target, well, it is all just hot air. And that is, in fact—hot air—is what we’re arguing about.

So with that, I would just like to say that I do want to thank the Opposition—and I include, obviously, the ACT Party in this—for the thoughtful approach with which they have taken these. The SOPs that we have received are based on good advice, either from peak industry bodies in the agricultural sector, the PCE, or other sources. They are well thought through. My belief is that for almost all of them, we actually do agree with the intent in part or in whole, and the provisions that we have written in either when the bill was introduced or during the subsequent stages actually take care of those concerns. So with that, I would thank the Opposition for the way that they’ve engaged in this entire process and thank them for their contribution.

Thank you, Madam Chair. In my brief contribution, I’d like to focus on international credits, because we’ve had a number of Supplementary Order Papers (SOPs) tonight where the intent of the SOP has actually been very much in line with where the bill’s going and most of what’s covered is actually covered already in the bill. But in this particular SOP, No. 406 from David Seymour, actually, it’s taking things in the other direction, because what he’s proposing is a new section 5W, talking about how emission budgets are to be met. What he’s suggesting is that emission budgets can be met through domestic emission reductions and domestic removals or offshore mitigation. What he’s suggesting is: “In considering how emissions budgets may realistically be met, the Minister must be neutral [on] whether emissions budgets [can be] met through domestic emission reductions … or offshore mitigation.”

A lot of the submissions that we got during the select committee process actually really wanted to go further in terms of not using international credits at all. Victoria University of Wellington Students’ Association—their view was “We think that the Bill saying targets must be met as far as possible domestically is vague and unhelpful. We ask that the Bill be revised to include:—The prohibition of the use of international credits to promote long-term certainty and accountability.” It was their view that this is necessary to drive domestic action and innovation from communities. They were saying if we could just offset all the time by overseas credits, that would actually stymie our drive to domestic action, and, basically, also talking about then allowing us to pay other countries to do the work for us—and so that real sense that we should as a country be providing leadership in that.

So this is where, within the Environment Committee, we actually did go further in terms of some of the amendments that were recommended to actually strengthen that understanding that it was actually domestic action that needed to be happening. In clause 8, new section 5T(ab), it states that it requires the Minister to set a series of emissions budgets “in a way that allows those budgets to be met domestically;”. So when we’re thinking forward about where we’re going to be going, their whole intent is that that would be domestic action.

Then, in clause 8, new section 5W(1), it already said that “Emissions budgets must be met, as far as possible, through domestic emissions reductions and domestic removals.”, but we added some strengthening there to talk about offshore mitigation being used if there was a significant change in circumstance—so not as a routine but only if we needed it, if there was an unintended, unanticipated change in circumstance that affects the considerations on which the relevant emissions budgets were based and it affects the ability to meet the relevant budgets domestically. So it really was strengthening that and saying “We need to provide leadership as a country in terms of our emissions reductions.”, and that was incredibly important. So, for me, the sense is that this Supplementary Order Paper 406 by David Seymour would take that in the other direction, and we’re not wanting to support that.

One thing I would like the Minister for Climate Change just to comment on if he’s got the time is the international shipping and aviation, because that’s something that we haven’t talked about much in this committee stage. We received a lot of submissions on this, talking about international shipping and aviation and needing that to be added to the bill so that it accounted for those emissions that were produced by those purposes. Basically, again, one of the submissions said “The urgency of climate change and the need to bring all sectors into this—we think that the bill should include our share of international aviation and shipping emissions in the bill.” So what we did do as a select committee is recommend that a new section 5OA be included in the bill, and it says “The Commission must, no later than 31 December 2024, provide written advice to the Minister on whether the 2050 target should be amended to include emissions from international shipping and aviation (and, if so, how [that should happen]”.

The sense was, I think, that with what’s happening overseas at the moment, we weren’t quite there yet in terms of us being able to bring that into our own primary legislation and that further work needed to be done. But there was a real sense that we do need to consider that in 2024, at that point, because at the moment, while some countries are reporting this in their greenhouse gas inventories, they’re not actually including it in their totals. So it really was a matter of seeing where we get to in terms of what’s happening overseas. So with that, I’m happy to support some further discussion on that. Thank you, Madam Chair.

Thank you, Madam Chair, and thank you to the member who has just resumed her seat, Dr Liz Craig. I thought it was an excellent summary of what the amendments on Supplementary Order Paper (SOP) 406 would do. She’s right: they would require that people are allowed to meet their obligations to reduce emissions using either domestic or international credits or removals, and that the Minister should be neutral in deciding whether people would use domestic or neutral, so long as they were of a specified quality.

It was interesting that the member quoted the Victoria University of Wellington Students’ Association as an authority on the question, because they submitted to the Environment Committee saying they didn’t want to use international credits. Well, they don’t have to. But I would point out that if students at the university of Victoria are anything like students at every other university I know, they don’t apply the principle of using only domestic products in their own lives. If you go to a university and you said to them “You must get clothing, transport, and electronics using only domestic sources.”, they would say, “That’s nuts. We want to be able to get competitive inputs to our lives and we don’t care, generally, if they’re sourced from New Zealand or offshore.”

I’d say to the member—she’s respected, among other things, for being a doctor, for being a medical professional—that nobody in the New Zealand medical profession would ever say that it’s somehow wrong to take techniques and training and drugs and equipment for the medical profession from offshore. Of course, when we try to provide for our needs we use inputs from a whole range of different jurisdictions. What’s wrong with that? Why, if we’re prepared to trade with the rest of the world to provide for our needs and everything else, would we not be prepared to provide for our needs in terms of carbon credits and emission removals by doing deals with people in other countries?

There is nothing inherently wrong with doing that, and I didn’t hear the member explain exactly what is so wrong, inherently, with New Zealanders being able to meet their needs as efficiently as possible by sourcing reductions in carbon emissions from anywhere in the world, so long as those reductions meet a standard that my amendments would provide for the Minister to set. There is no argument against this that I’m hearing tonight. Actually, what’s being proposed is to restrict New Zealanders to a narrower range of options for reducing their emissions than others. That puts New Zealanders at a disadvantage, and that may also lead to greater carbon leakage—one of the things that the bill seeks to reduce.

I think it possibly gives an insight into the bill as well, and some of the motivations behind it, because it appears to be more about transformation of the New Zealand economy and the way we live than effectively reducing the concentration of carbon dioxide equivalents in the atmosphere, which of course is global. I think that’s a real problem.

Then the Minister in charge, the Hon James Shaw, said that my other amendment—which is not actually amendment 407. There is no 407. It’s a tabled amendment with the time stamp 5.07. He said that it was ridiculous. Well actually, what that amendment does is remove the power to set strategies by regulation. This House can still regulate a strategy any time it likes. Actually, the Minister knows something about the desirability of that, because if we go back to new section 5ZA(1), set out in clause 8, he’s put in place a provision that actually the Minister must consult with, but not actually debate, what’s in his strategy.

So the question for the Minister is: if he acknowledges the importance of democracy and he acknowledges the importance of consulting Parliament about what sort of strategies or plans are put in place by the Minister, well, why not do it properly and actually come to the House and have the debate properly about what the strategy should be? He’s halfway there, and if he was to support my tabled amendments at 7 past 5, then he’d actually be going all the way and giving truth to his proposition, or at least his apparent aspiration for these plans to be set democratically. I leave it to the two members to explain what possible remaining reasons they have for refusing to support, as the Minister himself has said, my very well-thought-out amendments on Supplementary Order Paper 406 and the amendment tabled at 5.07.

Thank you, Madam Chair, and the member who just resumed his seat was talking about—

💬 David Seymour: Ho, ho, ho!

David Seymour; yes, indeed—was talking about overseas credits, and it is fair to say that the use of overseas credits raised real concerns by many submitters. One of them probably was addressed by the member, and that is the danger that credits which are presented as legitimate are, in fact, the products of either flawed accounting or corrupt accounting. I think the argument of principle underlying the use of overseas credits is that carbon credits can only ever be a transition, because the fact of the matter is that if we think we can buy our way out of this dilemma, we are wrong.

We simply can’t plant enough forests in the long term to continually burn carbon which has the effect on the climate that we know it does. So no matter how much of Siberia or Africa or the Near East or the Far East is planted in forests, ultimately, someone has to pay the piper. And the Paris Agreement is very clear that the obligations on countries to step up are different depending on where they sit in the world. And, Minister Shaw, my suggestion is that this country, a developed and wealthy country, has a greater obligation to step up than others.

So whilst in the short term, if we are simply accountants, economists, or engineers, we might think we can buy our way out of this using overseas credits—

💬 David Seymour: What about lawyers?

Lawyers are entirely different, Mr Seymour. We see things from a principled, reasoned, and objective standpoint, unlike the economists, the engineers, and the accountants amongst us like yourself. So, Mr Seymour, the fact of the matter is that we are uniquely and ideally placed to make the technological leap, to make the social leap, to make the environmental leap, to say that we in this island nation are going to do things a little differently. You know what? We can move towards a genuine zero carbon economy, not one that seeks to offset its activities by planting trees. Now, we know that in terms of transitioning when true.

💬 David Seymour: Then let’s buy credits from offshore then.

You’re right—you’re right. We do need to do that in the short term. That is called a transition, but in the long term we cannot simply defer and move our obligations to developing nations who, in fact, need their arable land much more than we do. So we need—and we are uniquely placed to move into—a zero carbon economy where the activities we engage in are both economically profitable and environmentally sustainable, and we need to be brave enough to step into that and to understand that what might be a short-term investment is very much long-term gain. So in terms of overseas credits, it’s not that they’re necessarily corrupt or flawed—they might be—but the better reason is that they’re a bandaid, they’re a sticking plaster on a gaping carbon wound, and we need to address that now.

Look, the targets are not going to be set in stone. We know that we can address those. And look, the Environment Committee was very, very productive, and full credit to the Opposition for raising the arguments and drawing out from submitters some very good points about the effects on communities. I hope they recognise the significant shifts in the bill that were made at select committee. So in terms of amending that target, we noted, for example, that if there had been significant changes in social, cultural, environmental, or ecological circumstances, that warrants change—if there is a significant change, and that covers pretty much everything. So all of those concerns that the Opposition’s raised are covered simply in there, and that’s in new section 5Q, in clause 8. So we really do need to look ahead—yes, accept that we need to be nimble and prepared to change, but we need to make the big changes now.

The question was put that the following amendments in the name of the Hon James Shaw to clause 8 be agreed to:

in clause 8, new section 5Q(2)(vii), replace “; and” with “:”

in clause 8, new section 5X(3)(b), replace “emission” with “emissions”

in clause 8, new section 5ZM(2), replace “5ZN and 5ZO” with “5KA and 5ZN”.

Amendments agreed to.

The question was put that the amendment set out on Supplementary Order Paper 401 in the name of the Hon Scott Simpson to clause 4 be agreed to.