Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill

Members, we come now to the debate on clauses 1 to 3—“Title”, “Commencement”, and “Principal Act”.

Thank you, Mr Chair. On the title and the commencement, taking into account that we recognise the challenge we have with the dramatic loss of—well, it’s not a dramatic loss; that’s overstating it. There is a distortion created by the emissions trading scheme where we are seeing arable land converted to forestry. That is well recognised. The obvious solution is to take forestry—carbon forestry—out of the emissions trading scheme.

This legislation has attempted to take a step in the right direction, and that’s the reason that we as the Green Party deliberated at length as to whether we should support this legislation, because we did recognise that it was an attempt to address what is a genuine problem. It has, however, created a whole lot of complexity, particularly with the ballot system.

In terms of the title, Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill, we suggest that it could be the “Forestry Conversion Ballot Bill” because one of the most damning characteristics of it—or challenging characteristics, if we’re to use a slightly less forthright piece of language—would be the ballot. I believe, Minister, in the course of time, the part of this bill that will be seen as problematic is that bit that has the ballot. There has to be another way of doing it than that if the Government or subsequent Governments are not prepared to bite the bullet and take forestry out of the emissions trading scheme.

My second point in this regard, is genuine concerns expressed by the forestry sector as to the impact it will have on confidence in that sector. This is where the balance has to be struck, because the Climate Forestry Association, among others, said that without changes to the bill, investment in afforestation will drop below current estimates, and, certainly well below the levels needed to meet New Zealand’s afforestation emissions reductions targets and the Nationally Determined Contribution.

When we have this massive challenge of climate change, when we have a Government, with all due respect, that is heavily reliant on forestry for dealing with climate change net offsets—which are a fiction—then it is concerning that we have a piece of legislation that adds further complexity and disincentive, you could argue, to the forestry sector.

So reiterating, I propose that we change the name of the bill to “Climate Change Response (Emissions Trading Scheme—Forestry Ballot) Bill”. I think that would be a greater reflection on what the bill primarily does.

Thank you, Mr Chair. I have a quick question for the Minister in the chair around the commencement date that is laid out in clause 2 of this bill. It says here that “This Act comes into force on the 31 October [this year], except as provided in subsections (2) and (3)”. So that section—in subsection (2)—it lays out that “sections 6, 7, 10, 11, and 12 come into force on the day after Royal assent”. Then there is a third date that is laid out there as well, and that is: “Subpart 4B of Part 5, as inserted by section 16, and all other provisions that relate to LUC class 6 land permits, to the extent that they do so, that have not come into force under subsection (2), come into force on 1 January [next year].”

The sections that are mentioned in subsection (2) are the interpretations. In clause 6, there is a whole list of interpretations of various terms that are integral to this bill. Clause 7 is around the regulations on infringement offences, and then you’ve got the regulations about fees and the charges there. Clause 11 is around regulations, as well as the regulations around methodologies and mapping standards. So I’m little bit confused as to why the regulations come into force ahead of the whole Act coming into force, and I would be grateful if the Minister could clarify that.

There are also some issues around the definitions of permanent forestry and standard forestry that now sit in the definitions section for the whole Act, instead of the part that they specifically relate to; and clause 12 is repealing the definitions. That’s the bit that I’m talking about in terms of the definitions of “permanent forestry” and “standard forestry”; that’s relevant to clause 12, which also comes into force ahead of the Act, and that’s about repealing the definitions there that I mentioned that are now in clause 6. New Subpart 4B, which is also mentioned in that list in subsection (2), is about the new balloting system for land use of class VI land.

Why has the Minister made the decision not to have the balloting system come into effect at the same time as everything else in this bill? I’m just wanting some clarification around the staggered dates that are mentioned here, when it comes to the commencement of this piece of legislation.

Yeah, I thank the member for the point. In effect, the timing of when the ballot will come in is 1 January 2026. There needs to be adequate time in order to put in place some regulations that will enable that, so the empowering provisions, therefore, will come into force the day after Royal assent.

Thank you, Mr Chair. I would just like to pick up on the title of this bill. I want to do so because we had in Parliament tonight this really fantastic and valuable event put together by Wellbeing Economy Alliance Aotearoa. It invited MPs from across the House, and we were all represented there apart from one party, I think. We had very clear encouragement from two former Prime Ministers, Jim Bolger and Sir Geoffrey Palmer, who were all about encouraging us to look to the long term and deal with the actual issues together.

What I’m interested in hearing from the Minister in the chair on the title of this bill is whether he believes that it is actually solving a problem. If we were actually trying to solve this problem, which we know is a problem, we would be addressing it directly; we wouldn’t just be tinkering around the edges. We would, for example, be taking forestry out of the emissions trading scheme because of the way it has influenced it and is, essentially, ineffective. It’s not dealing with the issues that we so desperately need it to.

A term that was coined, and I propose to the Minister to see if he agrees with this, is the term “poly-crastination”. That was about, essentially, doing anything but deal with the real issue. The title that I propose for this bill, which I’d be interested in hearing the Minister’s comments about, is the “Climate Change Response (Emissions Trading Scheme Forestry Conversion Poly-crastination) Amendment Bill.” We heard very clearly across all sectors in their submissions on this bill that it was not dealing with the actual issues, it was not going far enough, or it was doing things that quite unexpectedly and perhaps quite unintentionally impacted the forestry sector in ways that perhaps this amendment has gone some way to address, but it’s really hard to know when it’s so last minute and has not had adequate scrutiny. That’s really the key question about the title that I’d like to hear from the Minister on.

Mr Chair, thank you. I think, when one reflects on what the member just noted, what we’re doing is the complete opposite of what the member is implying. Actually, we’re taking the initiative in order to take action on an area, which is required in terms of putting a cap on the amount of forestry going into the emissions trading scheme (ETS).

The member has a notion that created significant volatility in the ETS market because of the shock that that placed on to the market of removing forestry from the ETS, which put the whole ETS market into a tailspin. We had the second-oldest and most mature ETS marketplace in the country, which does the heavy lifting in terms of carbon reduction. The policy positions of simply saying, “Well, let’s just remove it” when it’s a long-dated sector and industry is just simply market-destructive - type language.

One needs to be cognisant of the impact of that on the reality, which is it’s a long-term market that requires certainty. What we’re doing is taking the initiative: we’re putting a cap in place, which deals with the underlying issue; and put in plenty of opportunities for review, which will ensure that the settings are set at the appropriate level.

I move, That debate on this question now close.

Madam Speaker, the committee has considered the Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

The Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill is set down for third reading immediately.

Third Reading