8. Dr CAM CALDER (National) Link to this
to the Minister for Climate Change Issues
How does the Government’s moderated ETS balance New Zealand’s environmental and economic interests?
Hon Dr NICK SMITH (Minister for Climate Change Issues) Link to this
The moderated scheme ensures New Zealand does its fair share on climate change, without imposing excessive costs on businesses, farmers, and households. The power and fuel price increases have been halved by the amendments that National passed last year, and we have ensured that trade-exposed sectors with significant emissions are not put at risk, by providing allocations that offset the cost of the scheme.
What are the thresholds for trade-exposed sectors to get an allocation to offset their emissions trading scheme costs, and how were these changed by the Government?
Hon Dr NICK SMITH Link to this
The original scheme in 2008 provided support for industry if emissions exceeded 50,000 tonnes. But this disadvantaged small exporters whose emissions were high as a proportion of their costs. National’s changes mean that if any trade-exposed business has costs from the emissions trading scheme that exceed 1 percent, it will be eligible for 60 percent support, and if those costs exceeds 2 percent of the business’s costs, it will be eligible for 90 percent support. These changes have not increased the total amount of industry allocations, because some large emitters face less than a 1 percent cost impact from the emissions trading scheme and are now ineligible for support. Our approach is fairer and will ensure the emissions trading scheme does not impact significantly on the competitiveness of New Zealand trade-exposed businesses.
Is the claim correct that New Zealand is imposing costs on its businesses and consumers that are not being faced by any of our trading partners?
Hon Dr NICK SMITH Link to this
No, that claim is not correct. Of our 10 top trading partners, five have legally binding Kyoto commitments to reduce emissions: the UK, France, Germany, Australia and Japan. The three of these in Europe have had emissions trading schemes for 5 years ahead of us, and are imposing costs on energy that are more than double those of our moderated scheme. A further three countries already have emissions trading schemes in place at state level—New South Wales in Australia, the seven north-eastern states in the US, and the Japanese scheme that covers 455 businesses. There are also other policies, like the mandatory renewable energy targets in Australia that will increase power prices by 7 percent.
Charles ChauvelIs the Minister aware that New Zealand’s climate change representative said, three weeks ago in Bonn, that his Government has no way of knowing what the effect of his emissions trading scheme will be on domestic emissions reductions; and is his latest claim that there will be a reduction in New Zealand’s emissions of 19 million tonnes by 2012 not just another case of him making up the numbers to suit his argument?
Hon Dr NICK SMITH Link to this
The officials who provided the advice on a reduction of 19 million tonnes provided exactly the same evidence to the select committee last year, where the member had the opportunity to question that advice. It is difficult to predict exactly how the market will behave in response to the improved incentives for planting trees and the improvements for investing in renewable energy, but after Labour’s appalling record in terms of deforestation and a trebling in the amount of electricity generated from coal, and in terms of almost a record increase in emissions, I will not be looking to Labour’s example to see how to solve this problem.
Why should householders bear a disproportionate burden of the costs of his emissions trading scheme, as the Prime Minister admitted after Cabinet on Monday that they would, given that those costs will simply subsidise his Government’s plans to encourage more mining, the conversion of dirty lignite into fertiliser and diesel, and more dairying and more roads, all of which will inevitably lead to a major rise in New Zealand’s domestic greenhouse gas emissions?
Hon Dr NICK SMITH Link to this
The first important issue is that the balance of the emissions trading scheme costs as they fall on business vis-à-vis households has not changed with National’s amendments and is identical to that under the Labour scheme for the Kyoto period. That is absolutely correct. The changes that we have made—
Hon David ParkerHon Dr NICK SMITH Link to this
The member who interjected did not listen to what I said. It was about the first Kyoto period, under which neither the Labour nor the National scheme would have included agriculture. The second point that I find extraordinary is that Labour members complain about the impacts on power and petrol prices, when they have advocated a scheme that would put prices up a whole lot more than they will be.
Craig FossI raise a point of order, Mr Speaker. A member opposite called another member in here dishonest during the previous speaker’s answer. That will bring disorder to the House. I am not sure whether you heard the comment. It was made by one of the members to your left, obviously.
Mr SPEAKERI raise a point of order, Mr Speaker. I am not trying to repeat what I said, but I am trying to gauge whether it was an error, and if it was an error I will certainly withdraw. I said the selective use of dates was intellectually dishonest.
I hear the honourable member, and I think we go too far if we rule out intellectual dishonesty. I think it is a widely used term and if members take offence—[ Interruption] I ask members to be reasonable, but if members want to avoid being accused of that, then they should think a little more clearly about what they are saying.
John BoscawenDoes the Minister agree with Arandee Industries founder and executive director Ron Greer that his business, employing 13 staff, would not survive the emissions trading scheme if it stayed in New Zealand and is therefore moving to Singapore; and are research and development industries not just one example that proves ACT’s point that the emissions trading scheme is costing New Zealand jobs, for no environmental gain?
Hon Dr NICK SMITH Link to this
The first point in respect of the environmental gain is that the projections are that the emissions trading scheme will reduce New Zealand’s emissions by 19 million tonnes—I do not think anybody would say that was no environmental gain. The second point is that any businesses that have a significant portion of emissions—for example, costing them more than 1 percent—are eligible for support under the changes that National made in order to ensure that their competitiveness is not adversely affected. I would be interested to see the figures from that specific business.
What does the Minister say to the 13 employees of Arandee Industries who will not be receiving this year’s tax cuts, because they have lost their jobs due to National’s emissions trading scheme?
Hon Dr NICK SMITH Link to this
Well, I have seen no evidence that would suggest that the specifics of that business would have been impacted on by costs to the point where that would compromise its competitiveness. If the member would like to provide me with the data, I would be happy to look at it. If the emissions trading scheme has a significant impact, then that business might well be eligible for an allocation on which its competitiveness would not be affected.
No, the member is now further down the back of the Chamber, and he will need to learn to use a bigger voice.
Chris HipkinsAll I can say is that it is better than what I have heard another Speaker referred to as in recent weeks.
I seek leave to table a 2009 Ministry of Economic Development report showing that the vast majority of new electricity project consents approved in New Zealand by the end of 2008 were from renewable resources.