What reports has he received on changes in investments that are good for New Zealand and will help reduce emissions?
There has been a marked shift in two areas. First, there has been a sharp increase in renewable energy investment. Eighty percent of the new consents lodged—by capacity—are for renewable power, whereas prior to 2008 most new investment was for thermal power stations. That is significant because the largest percentage increase in emissions by sector has been in the electricity sector, where our emissions are up 120 percent on 1990 levels. The second shift is in forestry. The last decade saw the worst period of deforestation since records began in the 1930s. We are seeing a sharp increase in forestry investment because of the emissions trading scheme, with significant increases in forest area over the next 4 years projected by the annual forest intention survey of the University of Canterbury School of Forestry.
What advice has the Minister received on how much the emissions trading scheme will reduce emissions by, and will it enable New Zealand to meet its Kyoto obligations?
I am advised the emissions trading scheme will reduce New Zealand’s emissions by 19 million tonnes of carbon dioxide equivalent, and, based on current projections, will enable New Zealand to meet its Kyoto targets. The saviour for New Zealand is the large expansion of forestry in the 1990s, which is offsetting our approximate 25 percent increase in gross emissions. The longer-term concern is that as those forests reach maturity, we will be quite exposed. That is why it is so important that we take steps now to constrain emissions growth and encourage new forest plantation.
What changes did National make to the emissions trading scheme, and how does it impact proportionately on the costs borne by businesses and households?
The most significant change we made was reducing by half the cost for both householders and businesses. Without our amendments, the price impact on fuel and power prices would have been more than double. That is why I find the cries of concern from the Opposition about the cost impacts of the emissions trading scheme lack credibility. Some people have claimed that our amendments shift the relative burden between households and industry. That is not correct. The costs of both are halved. There is no greater allocation to industry than would have occurred under Labour’s scheme, albeit we did as we promised and ensured that small and medium sized businesses are not discriminated against by the support for trade-exposed industries.