10. CHARLES CHAUVEL (Labour) Link to this
to the Minister for Climate Change Issues
Is there detailed Treasury and Ministry for the Environment analysis of the effects on the New Zealand economy and the environment of the changes to the emissions trading scheme?
Hon Dr NICK SMITH (Minister for the Environment) Link to this
Yes. Analysis has been done by Treasury and by the Ministry for the Environment on a wide range of options to changes to the emissions trading scheme, and advice was also sought from Infometrics and New Zealand Institute of Economic Research. I will quote their recommendation: “It is to introduce an ETS with free allocation to competitiveness-at-risk sectors, with agriculture excluded … allocation should be output-linked and phased out as our competitors adopt carbon pricing.” That is exactly what the Government’s modified emissions trading scheme does.
Why is the Minister now promoting an emissions trading scheme that renders a price signal substantially ineffective as far as emitting greenhouse gases in the agriculture sector is concerned?
Hon Dr NICK SMITH Link to this
I do not consider it to be ineffective, because when agriculture comes into the sector in 2015—and we will be the very first country in the world to come into an emissions trading scheme in 2015—there will be a very real incentive for those involved in the agricultural sector to adopt technologies that will reduce emissions. I think that everybody in the House realises that currently those technologies are quite limited. That is why the work being done by this Government, through the Minister of Agriculture, David Carter, around pursuing technologies in that area, is so important for New Zealand.
Why is the Minister now promoting an emissions trading scheme that he says will lead to a boom in forest plantings, when the absence of any effective price signal to the agriculture sector means that there will be no incentives for the conversion of marginal land to forestry, and every incentive to continue to convert to New Zealand’s biggest polluting activity—dairying?
Hon Dr NICK SMITH Link to this
The last party that I will take a lecture on about forestry is the party opposite, because the worst deforestation that has occurred—
I raise a point of order, Mr Speaker. I asked a very simple question of the Minister. He got up and started to claim that he had been given a lecture. He was not given a lecture. He was asked a question, and I require him to answer it. [ Interruption]
Mr SPEAKEREven the Leader of the Opposition will not interject when I am on my feet. The difficulty the member has got himself in is that he built an assertion into his question, and that is what the Minister is responding to. The member asked a question, and then made an argument about what that would lead on to. The Minister took that to be a lecture, and is responding to it as such. That is perfectly proper. If the member wants a straight answer, the questions must be direct. The Standing Orders make it very clear that questions are not meant to have statements made in them, because the statements are often contestable. The Minister responded to the contestable statement contained in the question. I cannot ask the Minister to ignore part of the member’s question. So it is just a classic example of the need to remember that if members want answers to questions they should not make contestable statements as part of a question.
Hon Dr NICK SMITH Link to this
One of the most important issues that we need to advance around climate change is for there to be a financial incentive for the planting of trees. That has not been possible, because although foresters are eligible for credits there is nowhere effectively for them to sell them. That is why getting an emissions trading scheme started on 1 July next year—
Moana MackeyHon Dr NICK SMITH Link to this
Well, actually, it was Helen Clark who delayed the entry of the liquid fuel sector by 2 years. Right now, there would be a market if she had not made that decision. With the decisions that have been made by National, with the support of the Māori Party, there will be a market for 50 million units of carbon, and that will provide an income stream. That is why the Forest Owners Association has welcomed the Government’s announcements.
Dr Paul Hutchison Link to this
What advice has the Minister received on the accuracy of claims by the Hon Phil Goff that taxpayers will be lumped with a $1.6 billion share of polluter costs as a consequence of the amendments to the emissions trading scheme?
Hon Dr NICK SMITH Link to this
My advice is that these claims are both false and misleading. The costs of National’s changes are $400 million over 4 years relative to the existing scheme. Nearly all of this is to reduce the costs of electricity and fuel.
Hon Phil GoffHon Dr NICK SMITH Link to this
What I find so funny about Phil Goff is that he gives a lecture on a Sunday about how power prices are too high, and then on the Monday opposes measures from National that would halve the cost for electricity consumers of Labour’s emissions trading scheme.
Why does the Minister now support an emissions trading scheme that shifts the obligation to pay for New Zealand’s emissions away from those who pollute and on to taxpayers, with the inevitable result that emissions will be higher and the country poorer?
Hon Dr NICK SMITH Link to this
The member opposite is incorrect. I will make it very plain and very simple for him. Under the previous Labour Government’s scheme the Government was set to make $23 billion from the emissions trading scheme. The National Government says that an emissions trading scheme is not intended as a cash cow but rather as a sensible instrument to try to encourage more energy-efficient behaviour, which is exactly what we are doing.
Will the Minister make publicly available all advice provided to the Government on the proposed changes to the emissions trading scheme so as to ensure that all parties wanting to make a submission on the legislation that will implement the scheme are fully informed about the additional costs and environmental impacts of the proposed changes?
Hon Dr NICK SMITH Link to this
I am happy to make those documents available in good time. I have a further paper to take to Cabinet next Monday to finalise the legislation that I will be introducing to the House. That information will show that this Government has taken a very balanced approach to the environmental benefits of the scheme. I note, for instance, that Labour members object to the cost of $400 million when the specific proposals that have been put to me by Charles Chauvel around timing and a $15 price cap would have cost $243 million.