7. NIKKI KAYE (National—Auckland Central) Link to this
to the Minister for Climate Change Issues
What reports has he received on New Zealand’s latest net position report under the Kyoto Protocol?
Hon Dr NICK SMITH (Minister for Climate Change Issues) Link to this
The report shows that New Zealand is set to exceed its Kyoto target by 11.4 million tonnes, which is worth $233 million. That is a small improvement on the previous year’s estimate. The report shows that, although New Zealand’s gross emissions will be 23 percent greater than in 1990, over the Kyoto period, 2008 to 2012, that is offset by the growth increment of forests planted since 1989. However, the credits for those forests belong to forest owners. Foresters are expected to receive credits worth $1.8 billion; consumers and businesses, through the emissions trading scheme, are expected to pay approximately $1 billion; and taxpayers are expected to face a bill of about $570 million over the period to 2012. The $231 million surplus is the overall balance for “New Zealand Incorporated”.
Has the Minister received any advice on the impacts of the Government’s emissions trading scheme on New Zealand’s net Kyoto position?
Hon Dr NICK SMITH Link to this
Yes, the advice I have received is that New Zealand would be in deficit were it not for the emissions trading scheme. The emissions trading scheme is projected to reduce net emissions by 22 million tonnes as a consequence of the financial incentives it introduces to both reduce emissions and plant trees. In short, without the emissions trading scheme New Zealand would not meet its Kyoto commitment to stabilise net emissions at 1990 levels.
Can the Minister clarify that there is a difference between New Zealand’s net position and the Government’s net position?
Hon Dr NICK SMITH Link to this
Yes, that is a very important distinction. New Zealand is expected to exceed its Kyoto target by 11 million tonnes, but the allocation of carbon units to foresters, as promised by New Zealand when we signed Kyoto in Japan in 1997, means that New Zealand’s net position is actually a deficit of about 30 million tonnes. The claim that New Zealand does not need an emissions trading scheme because we are set to exceed our Kyoto targets ignores the reduced emissions that the scheme will deliver and the fact that the Government still carries a substantive liability from emissions growth.
Charles ChauvelWhat advice has the Government received about the additional annual cost to the taxpayer of continuing to underwrite carbon-price risks by maintaining a 50 percent obligation under the emissions trading scheme after 2013, as the Minister indicated on 8 April he was considering?
Hon Dr NICK SMITH Link to this
The Government is carefully balancing its Kyoto obligations with a real concern about the cost for consumers and for business. That is why we modified the scheme, which will halve the cost for consumers from 1 July this year. This Government has also indicated that if there is not significant progress internationally in countries like Australia and the United States, then it would be our intention—
I raise a point of order, Mr Speaker. The question was a direct and quite precise one that asked what advice the Government had received about the additional annual cost to the taxpayer of continuing a particular policy. The answer has not yet even begun to address the question.
Mr SPEAKERIf I recollect, when the member carried on with his question he said the policy related to something the Minister said on a certain date.
Yes, I was simply verifying that he had actually floated that proposal, so I was asking about the costing of it.
What I am getting is that the member is now expecting me to intervene when his question identified that the Minister floated a proposal, but he is now asking about costing a policy.
I am asking whether it was costed when he floated it. I think it is a legitimate question. I can repeat the question if it was not heard as clearly as it might have been. I do not think there is any sting in the tail here; it is a pretty straightforward question.
Hon Dr NICK SMITH Link to this
Certainly. This Government made a decision to halve the costs to consumers and businesses from 1 July this year. I have raised the prospect that in the event that there is not progress in Australia or the United States, we would reconsider lifting the cost for consumers and businesses on 1 January 2013.
Hon Dr NICK SMITH Link to this
The member asks what the cost of that would be. That is impossible to tell, for a very simple reason: there is no international agreement beyond 2013, so to determine the cost for New Zealand when at the moment there is no agreement beyond the Kyoto period to 2012 makes such a calculation impossible.