1. Dr RUSSEL NORMAN (Co-Leader—Green) Link to this
to the Minister for Climate Change Issues
Will the passing yesterday of the Climate Change Response (Moderated Emissions Trading) Amendment Bill result in New Zealand’s greenhouse emissions going up or down between now and 2050 compared to the original emissions trading scheme passed in 2008?
Hon Dr NICK SMITH (Minister for Climate Change Issues) Link to this
The longer we go out, the less certainty there is with the figures. However, I want to go quite specifically through the advice. In the period from 2008 to 2012 the recessionary measures taken to halve the price effect of the scheme on power and petrol increases will reduce the incentive to reduce emissions, so that results in slightly higher projected emissions for New Zealand in 2012. In the period 2012 to 2018 the changes will do more to reduce emissions. This is because there is a significantly lesser allocation to industry and a stronger price signal to reduce emissions. So for the first decade the overall changes in our moderated emissions trading scheme will actually result in lower New Zealand emissions than the existing scheme. Beyond 2018 the key difference between the schemes is in the phase-out rate and the production-based allocations. There is no doubt that beyond that period the amended scheme would result in higher emissions for New Zealand, because it would export emissions from those intensive industries offshore. So, although emissions in New Zealand might be less, all we would simply do is to produce those products elsewhere on the globe, and actually make the global problem worse.
Will he advise the Prime Minister to go to Copenhagen and explain to Barack Obama and all the other world leaders why New Zealand has just passed a law that, as the Minister has just told the House, will result in New Zealand increasing its emissions, or will he be too ashamed to front up to that meeting?
Hon Dr NICK SMITH Link to this
This scheme will, in the first 10 years, reduce emissions more than the existing scheme. But I would make three further points, in light of the comparison with the United States. Firstly, the target that we are taking to the Copenhagen negotiations is significantly stronger than that offered by the United States. [ Interruption] It is a matter of fact. Secondly, I would also note that we now have a settled emissions trading scheme, which will be the first outside of Europe, to be put in place on 1 July next year. Thirdly, the one area of concern in going to Copenhagen is explaining why our emissions have gone up by 24 percent since 1990.
Craig FossWhat official advice has the Minister received on the comparison between the free allocations to industry in the first decade of the scheme supported by the Greens, and in the amended scheme?
Hon Dr NICK SMITH Link to this
I am advised that under the scheme supported by the Green Party, the free allocation to industry in the first decade was 135 million units. Under the new scheme industry will receive just 69 million units for the same period. This is because there is a lesser allocation to industry, with some companies getting only 60 percent or none, and because of the phase-out beginning in 2013, 5 years earlier. The Greens should be honest and openly acknowledge that in the first decade of the scheme it is actually more efficient.
I raise a point of order, Mr Speaker. Clearly, in stating that the Greens should be honest, the Minister was assuming that we were being dishonest—
Mr SPEAKERI am on my feet. I do not think the Minister needs to go down that track, and I do not believe he was in any way impugning the honesty of the Greens.
Does the Minister think that the Parliamentary Commissioner for the Environment had it wrong when she said that Parliament should vote against his emissions trading scheme because “In its current form, the bill virtually guarantees that the ETS will not achieve its stated goal of reducing our greenhouse gas emissions.”?
Hon Dr NICK SMITH Link to this
I also note that the Parliamentary Commissioner for the Environment advised Parliament not to vote for the previous emissions trading scheme, and I note that the Green Party ignored that advice.
Charles ChauvelIs the Minister aware that his own ministry could not tell a select committee today when it expects New Zealand’s greenhouse gas emissions to decrease; and is it not the reality that following the passage of his moderated emissions trading scheme, the only way that New Zealand will be able to meet its 2020 pollution reduction targets is through what we might call a modified Jacqui Dean solution: to buy them from offshore?
Hon Dr NICK SMITH Link to this
It is very difficult to project all of the moving parts that affect New Zealand’s future emissions profile. We do not know for sure the price of carbon into the future. We do not know for sure what the international rules are going to be beyond 2013, and I note that despite repeated questioning when Mr David Parker was the Minister, he could not give exact numbers on when New Zealand’s emissions would decline. What I will say is that the advice is that with the emissions trading scheme that the Government has passed, in 2020 New Zealand can expect its emissions to be 10 million tonnes fewer as a consequence of that scheme.
Can the Minister confirm that even with the advice he has provided today, after 2018, because the phase-out rate is lower, we will see a significant increase in New Zealand’s greenhouse emissions over the emissions we would have seen under the old emissions trading scheme?
Hon Dr NICK SMITH Link to this
I make two points in response. The first is that it is this Government’s policy that we do not simply want to reduce emissions by closing down New Zealand Steel or our smelter, sending that industry offshore, and clapping our hands with joy that our emissions have gone down, only for them to occur somewhere else on the globe. That makes no sense. The second point is in respect of the 1.3 percent phase-out rate. This Government has been quite open that that will be regularly reviewed, so that it is in line with the rate of our major trading partners. We would like to phase out more quickly; that will depend on ensuring that other countries also do so, consistent with this Government’s policy of New Zealand doing its fair share.
I raise a point of order, Mr Speaker. The question specifically addressed the 2018 to 2050 period. It specifically asked whether New Zealand’s greenhouse emissions would increase during that period, as a result of this change in the legislation. The Minister did not answer, or attempt to answer, that part of the question.
In fairness to the honourable member Nick Smith, as I listened to the Minister’s answer it was perfectly clear to me what he was saying. It is possible that that might be the case, but he was arguing that there was not much sense in saying that is bad if doing the opposite caused more emissions elsewhere. He just gave a different kind of answer from the one the member may have wanted, but it was perfectly clear to me what the Minister’s answer was to the member’s question.
Is it not the case that after 2018 we will have a much higher level of free allocation given to industry and agriculture in all sectors, and, as a result of that higher level of free allocation, we will have higher debt on the Government books and increased greenhouse emissions in New Zealand?
Hon Dr NICK SMITH Link to this
No, that is not correct and I will explain why. Under the existing Labour scheme, in 2018 a business like the Bluff smelter would receive a 90 percent allocation and would have to pay for 10 percent. Under the changed scheme, in that year the smelter will be required to pay 18 percent; that is, it will get an allocation of 82 percent. Then, in each year after that, there was the notion of that reducing out at a rate of 8 percent per year. None of the commentators believe that is realistic, and even in the discussions I had with Labour during our talks to try to get a consensus, nobody assumed that that 8 percent phase-out rate in the existing scheme would be able to be sustained 10 years hence. I remind the member that it is hard enough to work out the rules in climate change policy for the next 10 years, let alone to make predictions beyond that.
Is it not the case that by taking the three different periods the Minister identified in his very long answer—that is, 2008 to 2012, 2012 to 2018, and 2018 to 2050—and putting them all together, rather than splitting them up, overall New Zealand will have higher greenhouse emissions under his emissions trading scheme than under the old emissions trading scheme?
Hon Dr NICK SMITH Link to this
The member seems to ignore the fact that this is a global problem. The atmosphere does not know whether the emissions come from New Zealand or some other country. The Government side of the House makes no apologies for not wanting a policy that would simply export industry offshore, do nothing for the environment, and cost hard-working New Zealanders their jobs.
I raise a point of order, Mr Speaker. Again, the question was quite specific about New Zealand’s emissions. The Minister may have a point about global emissions. That is fine, but I asked specifically about New Zealand’s emissions. The Minister did not answer that question.
Hon Gerry Brownlee Link to this
The questioner started his question by saying “Is it not …”, and then he put a proposition. What he got from the Minister was a response to the proposition, and that is perfectly reasonable.
I do not think I need to hear further on this. I hear the point the member is making. It is fair enough; the Minister did not specifically answer that question. Yet in his answer was an implication that yes, that is possible, and I would imagine that any intelligent person who was listening to the answer would have picked that up from the answer. The Minister went on to explain why he and his Government see that as not being the crucial issue. I do not think there is much point in my trying to force him to give a more precise answer along the lines the member wants to hear. The member certainly got an acknowledgment of the point he was making.
Does the Minister know that the independent expert advice received by the Finance and Expenditure Committee, when it considered his moderated emissions trading scheme, was that there is simply no evidence or analysis available to support his contention that the massive subsidies now available to industry under that scheme are actually targeted at industry likely to move offshore; if so, when will he stop repeating the falsehood that his moderated emissions trading scheme will save any Kiwi jobs?
Hon Dr NICK SMITH Link to this
The member should read the very comprehensive economic analysis by the New Zealand Institute of Economic Research and Infometrics. That report said that New Zealand suffers very great competitive risk around emissions-intensive industry. The second point I make to the member is that if he wants to call allocations subsidies, it is interesting to note that when Mr Parker was asked a question by Jeanette Fitzsimons about whether allocations were subsidies, he said that they were not subsidies. It seems an odd contradiction that when Labour makes allocations they are not subsidies, but when National makes allocations they are. I would love Labour to explain that.
Hon Rodney Hide
Hon George HawkinsI would ask the member to please ask his question. [ Interruption] That is not acceptable. The member should not worry about those kinds of interjections. I ask him to just ask his question.
Is he willing to assist New Zealanders’ understanding of this Government’s emissions trading scheme by asking the National Institute of Water and Atmospheric Research to explain the adjustments that it has made to the raw data to produce a warming trend for New Zealand for 156 years of our history, when its own raw data in order show New Zealand’s temperature to be stable; if he is not prepared to ask for that explanation, why not?
Hon Dr NICK SMITH Link to this
Only as recently as last Friday, I think, Kevin Hague and I attended a Cawthron Institute lecture by David Wratt about climate change science. What Dr Wratt has consistently said is that because New Zealand is surrounded by oceans, all the modelling indicates that the temperature impacts of climate change are most likely to be less for New Zealand than for other parts of the globe. I would welcome the opportunity, not just for the sake of Mr Hide but for that of all members of the House, to invite the chief climate change scientist from the National Institute of Water and Atmospheric Research to address members, so that we can all be better informed on climate change science.
I raise a point of order, Mr Speaker. That is very kind, and I will take the member up on that offer.
My question asked whether the Minister for Climate Change Issues will assist our understanding by asking the National Institute of Water and Atmospheric Research to explain why its data have been adjusted to show a different result from what the raw data show—yes or no.
The Minister may not have specific responsibility for a scientific organisation in New Zealand. It may be the responsibility of the Minister, and it is up to the Minister to tell us that if it is the case. I ask him, if it is within his responsibility, to answer the question.
Hon Dr NICK SMITH Link to this
I would be happy to have the chief scientist from the National Institute of Water and Atmospheric Research come to the House and answer that technical question directly as a consequence of having a forum with members, and I think the member will find that to be very useful.
I seek leave to table a document by the New Zealand Climate Science Coalition about the adjustments that the National Institute of Water and Atmospheric Research has made to the raw data to show a warming trend, when, in fact, none is shown. It is dated 25 November 2009.