Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill

Members, we come now to our final debate. This is the debate on clause 1 and 2, title and commencement.

Thank you, Madam Chair. I would like to focus on clause 1, which is the title clause. As we know, this Act is the Climate Change Response—

Hon Member: No response.

Hon RACHEL BROOKING: —(Emissions Trading Scheme Agricultural Obligations) Amendment Bill 2024. My colleague here is just saying “No response”, and that I think would be a better title. But I want to reflect on the discussions we’ve just had during the debates on Part 1 and Part 2 and going back into the second reading as well that we’ve just had this week. This bill is progressing quickly.

I will be speaking about the title clause, clause 1. Some suggested changes—and I’m focusing here on the brackets, removing the “Emissions Trading Scheme Agricultural Obligations” to some different phrases which I think might be more useful to describe what it is that this bill is doing.

The first one would be the abrogation of the “polluter pays” principle. That is because of the non-response we had from the Minister of Climate Change regarding whether or not he was going to disagree with his ACT coalition partners that in fact it’s fine just to leave everything up to the market.

Another suggestion in that bracketed area might be that this Act is the “Climate Change Response (We’re Totally Relaxed Because the First Emissions Budget Looks Like it’s Going to be OK) Amendment Act 2024”, because, of course, the Minister hasn’t responded to my questions either regarding the second and third budgets, which we know the Climate Change Commission is worried about. They’ve expressed the risk about it and it seems like many members of this House think that everything is on track and it’s totally fine, when of course what this Government is doing is taking us backwards.

Another suggestion is that the brackets could be replaced with “Removing Agriculture Despite Agreeing that this Makes up over 50 Percent of our Emissions”. I referenced that—

Simon Court: Some people say.

Hon RACHEL BROOKING: It’s interesting that Simon Court has just said that some people say—I would remind Simon Court that, of course, the Minister has just stood up and agreed, or he seemed to agree. He could have been more forceful in his statements. I invite him to again give some force to that statement that, whilst the Ministry for the Environment website says something like 53 percent, he is totally committed to agreeing that, yes, agricultural emissions do make up at least or around 50 percent of our emissions.

We’ve just heard the member from ACT interject, and we heard a National member in the second reading, Miles Anderson, say—and I’m quoting from the draft Hansard on the Parliament website here—“I would like to point out that we consistently get told that 50 percent of our emissions are from farming, but that’s a gross target based on what is now considered to be poor science.” Why I’ve been asking the Minister about that is: does he agree with his colleagues from the National Party that that is based on poor science, and that somehow, we should be thinking about agriculture in a different—

CHAIRPERSON (Barbara Kuriger): Is the member suggesting that should be the title of the bill?

Hon RACHEL BROOKING: I’m suggesting that the title should be the “Climate Change Response (Removing Agriculture Despite Agreeing that it Makes up over 50 Percent of our Emissions) Amendment Act 2024”. Another title could be included in those brackets: “Removal of Incentive of a Backstop”. That could be in the brackets, and “No Plan Yet for Pricing”. We’ve heard from the Minister that there’s an intention for something by 2030, but it provides no certainty. That could be another name for it— “Climate Change Response (No Certainty for Farmers About What is Going to Happen) Amendment Act 2024”—or, as my colleague Damien O’Connor suggested in the second reading debate, “(Kicking the Can Down the Road)”.

Thank you, Madam Chair. When the Luxon Government says it believes in climate change and then does all the things to make climate change worse, it has the same effect as if it did not believe in climate change in the first place, which speaks to what I’m about to propose, which is an amendment to the title—

Simon Court: Climate change is getting better.

STEVE ABEL: Pardon me, Mr Court?

Simon Court: We’re going to meet the emission reduction plan. It’s getting better.

STEVE ABEL: Excuse me. This is—

CHAIRPERSON (Barbara Kuriger): This is about title, Mr Court. And Mr Abel’s going to suggest a title.

STEVE ABEL: I’m going to suggest a title. The gentleman to my left, Simon Court, has just said that this is making the emissions reduction plan better, but explicitly it is not doing that. It is taking out agriculture from the emissions trading scheme.

My amendment is to quite factually describe what the title of the bill should be. The bill is currently called the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, but there will no longer be agricultural obligations. It’s utterly incorrect to call it that, because it’s explicitly taking out agricultural obligations. Therefore, it should be called the “Climate Change Response (Agricultural Emissions Climate Delay) Amendment Act 2024”. It could have just as readily been called “(Climate Delay and Denial)”, because we know that delaying action on climate change has the same effect as denying action on climate change. If you know there is a problem and you do nothing about it, it has the same effect as if you didn’t notice there was a problem.

I put forward any of those titles for consideration, but I do really note, and would like the Minister’s view on it, that the current description of the legislation is actually really quite inaccurate. That is a problem because surely, in the words of the great Grant Robertson, it should say on the tin what it is. It is not this, because it is not the “(Emissions Trading Scheme Agricultural Obligations)”. It is about removing the obligations. Thank you.

Point of order. Thank you, Madam Chair. I’m just calling a point of order to seek guidance from you about the title clause. It’s always a danger for fresh MPs to just read this straight away and to seek guidance, but Speaker’s ruling 127/3 seems to suggest that “When debating the preliminary clauses at the end, members should have some latitude to summarise, and make concluding remarks about, the issues they have raised during the committee’s consideration of the bill.” Is that right or have I misinterpreted?

The latitude is not huge. It’s a small part of the bill, and they may refer back to where it came from, but we don’t want relitigation of Part 1 and Part 2 all over again.

FRANCISCO HERNANDEZ: Thank you for your guidance, Madam Chair.

Thank you, Madam Chair. It’s good to be able to take a call on the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, the title and commencement. My suggestion for an amendment is to change the title of the bill. It should be read “Climate Change Response (Making New Zealand Exports More Expensive) Amendment Bill”. The reason why I suggest that title change is, whether people in the House or outside of this House believe in climate change or not, there are a number of international obligations which the Minister has clearly set out in responses to different questions, that New Zealand has signed up to. As part of that response to those climate obligations, countries around the world are requiring supply chains, customers, and other businesses to track the emissions and the amount of carbon that is being used to make that product or service, in order to fulfil their climate change obligation reporting requirements.

The Finance and Expenditure Committee didn’t necessarily review this particular bill, but, actually, as part of its banking inquiry, one of the key aspects that members of the select committee—and this is all public—have been asking the banks about is around the climate change obligations that they have to fulfil as part of those reporting obligations.

Yesterday, we had Rabobank in front of the select committee. Rabobank talked about one of the papers that they had drafted as a series of different white papers to help their customers adapt to these climate change obligations. One of their papers which they recently published earlier this year was called Maintaining our emissions edge. As part of that research paper, some of the feedback that they got when they surveyed their customers—a number of them being farmers—was that they saw relief in having a breather from the regulatory changes under the previous Government. They were confident that this new Government was going to give them a chance to have a breath. However, what that report actually said was “Be careful about that breather”, because they referenced a Chapman Tripp report which showed that 80 percent—80 percent—of the exports from New Zealand to international markets require climate change reporting obligations.

A part of the issue that surrounds this particular—why this bill, and why I think that the title, should be changed is because, whether you do it now or you repeal it and you do it later, the fact is it’s going to make it more expensive and actually, in some ways, is potentially a risk for some of our exporters. The big companies overseas, such as the Nestlés, such as the Tescos, are requiring our New Zealand producers of goods and services that are exported to at least be able to trace what their footprint is, and if it fits what they have as part of their requirements, then they’ll, basically, import them from wherever they are in the world. That’s why I believe this climate change response bill title should be changed to the “Climate Change Response (Making New Zealand Exports More Expensive) Bill”. Ultimately, if New Zealand exporters cannot meet those international obligations to help their customers, it’s going to impinge on their ability to export the volumes, or at the value, which New Zealand exporters need and want. Therefore that is my suggestion for this. I haven’t been part of the deliberation on this bill—

Tim Costley: It’s as good as most of your economics.

Hon BARBARA EDMONDS: —however, both with the Reserve Bank this morning—actually, to that member, the Reserve Bank this morning, as part of the Financial Stability Report, also mentioned it as a particular risk. The reason why it’s a particular risk is when they surveyed the banks—

Suze Redmayne: So condescending.

Hon BARBARA EDMONDS: —seven of the 13—condescending! I heard Suze Redmayne saying “Really condescending”—I’m just trying to say what the Reserve Bank was talking about this morning in the Financial Stability Report. Of that, seven of the 13 banks that responded to the survey said geopolitical risk and tensions overseas were of a concern for them. Therefore, I believe this bill title does need to change to reflect that. I appreciate that the Government is going to come in with their new changes at a later date. However, it leaves a vacuum here, in which—

Hon Rachel Brooking: They might not.

Hon BARBARA EDMONDS: You hope they do. For our New Zealand exporters, I hope they do. Whether we like it or not, here in New Zealand, the rest of the world has these climate obligations which they require as part of their corporate reporting standards. There’s further changes that need to be made, but that is my suggestion: to change the title of this bill.

I move—

Hon Members: Madam Chair! Madam Chair!

MIKE BUTTERICK: —that debate on this question now close.

CHAIRPERSON (Barbara Kuriger): Excuse me, I cannot hear what Mr Butterick is saying.

MIKE BUTTERICK: I move, That debate on this question now close.

Point of order. Thank you, Madam Chair. I just want to refer to Speaker’s ruling 68/1. This relates to when closure motions are currently before the committee. While I certainly accept that it is over to the purview of the Chairperson to rule on that, the ruling by Chairperson Mallard in 2015 does make it very clear around when it is likely foreclosure motions are to be accepted. Referencing the—

CHAIRPERSON (Barbara Kuriger): Can I just point out to the member that I haven’t actually accepted the closure motion at this point?

TANGI UTIKERE: No, I was just going to indicate, Madam Chair, that the Minister has not engaged on this particular issue yet—there have been a number of issues that have been raised—and I know that part of the timing of taking the point of order is if you were minded to accept a closure motion. I was wanting to indicate that the Minister had still not taken any calls.

CHAIRPERSON (Barbara Kuriger): Thank you for that point of order.

Speaking to the point of order. Madam Chair, I believe that Speaker’s ruling only applies in the case that they are non-political contributions from the other side. I would suggest that they’ve been incredibly political, and so the Minister’s engagement, or lack of, has been entirely appropriate.

Well, just on the point of order and the response to the point of order, it is totally up to the Minister whether the Minister makes a response or not.

Thank you, Madam Chair. I really appreciate the opportunity to speak to the title cause, and that’s because of the absolute significance of this bill.

Now, I want to pick up, firstly, on the fact that the title claims to be a climate change response. The response that comes to mind when it comes to the actual content of the bill and the fact that it is removing agriculture from the emissions trading scheme (ETS), is there’s this Austin Powers movie where there’s a steamroller from way far away and there’s a henchman who just screams and screams for minutes while the steamroller slowly but surely crushes him. I think why I say that is because I want to propose a title clause for this bill, and it’s the “Climate Change Response (Emissions Trading Scheme Agricultural Obligations) (Global Climate Train Wreck) Amendment Bill”.

I’m picking up the comments from across the committee that, you know, we don’t want anything in this debate to be overly political. The problem when it comes to climate change is that it’s so serious and so severe in terms of us needing to really clearly take actions when it comes to climate change, that it feels that the only way we can actually get some attention on the issue, and traction with people understanding the magnitude and the severity of it, is to draw distinctions to more political things. I wanted to suggest the train wreck part of it because we know trains: they’re really fast and they cause a lot of damage when they crash—but in order for them to actually do that, someone needs to have set the tracks. This is exactly what this bill is doing with the framework in terms of taking out agriculture from the ETS.

What was so clear at the Environment Committee today was we actually had the climate commission come in and they talked about their first monitoring report when it comes to emissions and where New Zealand is at with their emissions. They—positively—gave us the news that we’ve heard before: that emissions have actually dropped in recent years. It was a 4.2 percent drop in 2022, and this was mostly due to changes in energy and industry sectors, but they really stressed the significant risks to the second and third budgets. This is primarily, as they pointed out, with agriculture and transport sectors. These are showing the largest risks. This is in their words, and they said in the absence of pricing mechanisms or any incentives, these provide headwinds to genuine emissions reduction. They stressed how urgent this was. They stressed how we really need to look at every part of every sector if we are really going to meet our emissions obligations and the ones that this Government have so clearly stated that they are committed to.

The “Climate Change Response (Emissions Trading Scheme Agricultural Obligations) (Global Climate Train Wreck) Amendment Bill”—I’d love to hear from the Minister if he would consider that title. Thank you, Madam Chair.

I move, That debate on this question now close.

The question is that Steve Abel’s tabled amendment to replace “Emissions Trading Scheme Agricultural Obligations” with “Agricultural Emissions Climate Delay” be agreed to.

The question is that clause 1 stand part.

The question is that Steve Abel’s amendment to change the commencement date to 31 December 2029 be agreed to.

The question is that clause 2 stand part.

I will note that there is no point in looking to the Chair for guidance when one cannot remember which way one is voting, because there won’t be any guidance coming from this Chair.

Bill to be reported without amendment.