7. Hon DAVID PARKER (Labour) Link to this
to the Minister for Climate Change Issues
Under the Kyoto Protocol do taxpayers bear the costs for increases in agricultural emissions if those are not paid by the emitter?
Hon Dr NICK SMITH (Minister for Climate Change Issues) Link to this
No, not necessarily. The Kyoto Protocol requires that New Zealand’s net emissions not exceed 1990 levels over the period from 2008 to 2012. There would be a cost to the taxpayer only if these levels were exceeded and we needed to buy units internationally. The 120 percent increase in emissions from electricity generation, the 72 percent increase in transport emissions, and the 12 percent increase in agricultural emissions are offset by both the forestry and the waste sector. Current projections are that New Zealand will slightly exceed the target and will actually have a small surplus.
How does the Minister justify rejecting settled economic principle by allowing the agricultural sector to increase its emissions at the cost of other businesses and taxpayers?
Hon Dr NICK SMITH Link to this
Members opposite seem to be intent on reducing the size of the economy. Members on this side of the House are of the view that we want to incentivise greater energy efficiency behaviour and adaptation, and the technologies to do that. We are absolutely honest about our ambition, which is to grow the New Zealand economy. Labour’s approach to these issues would see the New Zealand economy contract and more New Zealanders out of work.
Nicky WagnerOn what basis has the Government determined the timing of various sectors’ entries into the improved emissions trading scheme?
Hon Dr NICK SMITH Link to this
The timing decision has been based on four key factors: first, the extent to which available technologies enable emissions reductions; secondly, the extent to which emissions have increased since 1990; thirdly, the extent to which a sector is trade exposed; and, fourthly, the practicalities of applying an emissions trading scheme to that sector. On all these four criteria there is a strong case for the entry of the agricultural sector to be later.
Can the Minister not see that allowing uncapped free allocation to the agricultural sector fundamentally undermines the effectiveness of the emissions trading scheme and sees other businesses and taxpayers picking up that sector’s bill?
Hon Dr NICK SMITH Link to this
No, it does not. Members opposite do not seem to grasp the key point that under the Kyoto Protocol or its successor New Zealand is allocated a base of emissions. We could be like Labour and nationalise all those units, sell them off, and try to make billions for the taxpayer, or we could take the fair approach that we are taking in New Zealand. The last point I make to the member is to ask why the Australian Labor Government has adopted exactly the measures that we have in our bill, and why what works for Labor in Australia is somehow anathema to Labour in New Zealand.
Is the Minister aware that if the Government agreed to cap the pool of free emission credits for agriculture at 90 percent of 2005 emissions, it is likely that an enduring and effective emissions trading scheme could be achieved; and is the Government willing to seriously consider this?
Hon Dr NICK SMITH Link to this
I find it quite perverse that members opposite agree that a production-based approach to industry should be taken, yet they seem to have an attitude that is anti-farmer and anti-agriculture, despite the agricultural sector being the most important part of the New Zealand economy. In proposing to introduce the agricultural sector into the emissions trading scheme on 1 January 2015, we will be the very first country in the world to attempt to include agriculture.
The Minister and the Prime Minister have been saying that they want to continue negotiations with the Labour Party. I asked a very simple question. It was not loaded; it was a factual question that asked about a point of principle as to whether the Government would be willing to seriously consider it. The Minister has not addressed that question. I ask whether I would be able to re-put the question and that he be asked to answer it.
Mr SPEAKERIs the Minister aware that if the Government agreed to cap the pool of free emission credits for agriculture at 90 percent of 2005 emissions, it is likely that an enduring and effective emissions trading scheme could be achieved; and is the Government willing to seriously consider this?
Hon Dr NICK SMITH Link to this
The Government is not prepared to consider treating agriculture differently from industry.
Hon Dr NICK SMITH Link to this
Well, the member is suggesting that there be a cap that is specific to agriculture. I say to the member again that in terms of negotiations between National and Labour I will make myself available any hour and any day to have discussions with Labour about how an accord might be reached. But I say to the member that members on this side of the House will not agree to changes that put agriculture at a disadvantage to other industries, because the agricultural sector is the backbone of the New Zealand economy.
What more proof does the Minister need that his proposed emissions trading scheme changes will not work than the statement from the forestry industry that because of his changes to the emissions trading scheme there will be little or no private investment in new forestry, making a mockery of the National Party promise to plant 600,000 to 800,000 hectares of marginal lands?
Hon Dr NICK SMITH Link to this
The member is incorrect. The chief executive of the New Zealand Forest Owners Association made very positive remarks on the day that the changes to the emissions trading scheme were announced. I have seen some analysis since of about the same quality as that done by Labour, and it is incorrect. The Ministry for the Environment will be providing information to those people to correct them on some assumptions that they are making about National’s improvements to the emissions trading scheme that are not right.
I seek leave to table two documents. The first is a release from Roger Dickie saying that private investment in forestry will dissipate as a consequence of—
The second document is a report from Associate Professor Mason at the University of Canterbury, to similar effect.