2. MOANA MACKEY (Labour) Link to this
to the Minister responsible for Climate Change Issues
What is the revised projected deficit in tonnes and dollars during the first commitment period of the Kyoto Protocol from 2008 to 2012, and how does this compare with the previous figure?
Hon DAVID PARKER (Minister responsible for Climate Change Issues) Link to this
The newly revised deficit is 21.7 million tonnes, which equates to a $481 million sum at the current cost of carbon. The previous year’s estimate was 45.5 million tonnes, with a reliability of around $1 billion, so the figure released this week demonstrates that our liability has more than halved, with a saving to the nation of more than $500 million. Without the emissions trading scheme, New Zealand’s emissions would rise substantially in the short term, and by even more in the long term.
What is the likely range of deficit for the country in tonnes of emissions and in dollars if the emissions trading scheme does not proceed?
I am advised that if the emissions trading scheme does not proceed, New Zealand’s emissions would rise during the first commitment period, ending 2012, by between 15 and 50 million tonnes, at an additional cost of between $326 million and $909 million at the current cost of carbon. All of that is avoidable and wasteful, and the economic loss to the country would be borne by taxpayers.
Hon Dr Nick Smith Link to this
Why should this Parliament and New Zealand trust the Government in respect of New Zealand’s Kyoto Protocol deficit when at the time of the ratification of the Kyoto Protocol the Government told New Zealanders that we were set to make a profit of $1,100 million, when at the time of the 2005 general election the Government accepted that it was a deficit but said that it was $300 million and that there was no conceivable scenario where it could get worse than that, and when on 4 May this year Treasury said that the figure, including the effect of the emissions trading system, was $1,009 million but just 3 days later the Government revised the figure to $482 million; and how could the Government, over a period of 3 days, make a change of $500 million in this estimate?
If I could be given the courtesy of responding to at least a number of the issues that Dr Smith has raised, I say that the first is that New Zealand’s preparation of our estimates is probably the most transparent in the world. The latest net position report, which I am about to table, is a 76-page document, so there is plenty of detail there. It is, of course, no longer just a projection, because it can take into account actual emissions that are starting during the first commitment period, which we are already into. So the range of uncertainty decreases year by year. Lastly, but by no means least, I would point out that the same methodology is used as is audited by the United Nations auditors every year in accordance with the rules under the Kyoto Protocol. So these figures are very robust and are becoming more accurate year by year.
Heather RoyIs the Minister at all concerned that those on lower wages who are least able to afford increased household costs will be severely disadvantaged by Labour’s Kyoto Protocol obligations as outlined by the New Zealand Institute of Economic Research estimates, and that the emissions trading scheme will result in the loss of 22,000 jobs by 2012, which is a reduction in average full-time wages by $2.30 an hour, and a $3,000 reduction in an average household’s annual spend by 2025?
I would make three points in response to that. The first is that, of course, the Government—and any Government—would be concerned about the effect on households. That is one of the reasons why we have delayed the entry of the transport sector into the system. The second point I would make is that the figures the member refers to need to be put into context in that they are saying that the economy, if it were to grow over a period, would grow by slightly less, but people would still be better off than they are today. The third point I would make—and this issue requires some detail and is addressed in a later question today, so I will not go into it in detail—is that there is a problem in the New Zealand Institute of Economic Research study that we have now got to the bottom of.
Hon Dr Nick Smith Link to this
Can the Minister explain why on 4 May, in issuing the pre-Budget fiscal update, the Government stated that the Kyoto Protocol liability was $1,009 million, but just 3 days later the Prime Minister announced that it was, in fact, $482 million; and does this not suggest that these figures are being politically manipulated to suit the agenda of the Government in explaining a backward flip, and that if these figures are to have credibility, then they should be managed independently and released in the same way in which the household labour force survey, inflation, and other critical economic data—
Hon Trevor MallardHon Dr Nick Smith Link to this
Well, perhaps Mr Mallard might explain how it can be that on 4 May the Government issued—
I raise a point of order, Madam Speaker. We have already heard a speech. I think that it is clear under the Standing Orders that questions are meant to be put to the Minister. I would ask the member to address his question to me, please.
Madam SPEAKERThank you. Interjections do have responses. Responses, hopefully, will be short, as the interjection should be. Perhaps we can now return to the question, which was a long one, so that the Minister can remember what its content is.
Hon Dr Nick Smith Link to this
How does the Minister explain that on 4 May, in the pre-Budget fiscal update, the Government advised the people of New Zealand that the estimated Kyoto deficit was $1,009 million, but just 3 days later the Prime Minister announced, at the same time as the backward flip on the timing of the emissions trading scheme, that in fact the figure was only $482 million; and does he seriously suggest that the key facts that led to the revision downwards were not known 3 days earlier?
The member already knows the answer to this question, but pretends otherwise. The net position report in terms of tonnes is produced once a year. Every month Treasury updates that figure based on the projected deficit in tonnes to take account of movements like the change in the exchange rate or the change in the international price of carbon. That is what happens monthly, and that is what happened in respect of the figure that was in Treasury’s estimates previously. Once—
No, it is not. Once a year the net position report is recalculated. There is a lot of work in it. It does not happen in 3 days, as the member suggests. Indeed, the summary of it this year is 76 pages long.
Gordon CopelandHow much of that deficit is attributable to the net deforestation of 46,000 hectares of trees that occurred between 2004 and 2007, and should not that amount at least be applied towards new forest planting incentives to create a massive carbon sink right here in New Zealand with benefit to both our environment and our economy, since 2012 is now just 4 years away?
The first part of the question asked how much of the deforestation between a certain period and 2007 was shown in that figure. The answer is zero dollars, because, of course, New Zealand’s Kyoto liabilities did not start until the start of this year, and it is deforestation from that date onwards that is counted.
I seek leave to table the net position report for 2008, which is prepared on the same basis as in previous years.