Urgent Debates — Greenhouse Gas Emissions—Release of Report 
Urgent Debates — Greenhouse Gas Emissions—Release of Report 
[Volume:627;Page:21758] 
Urgent Debates 
Greenhouse Gas Emissions—Release of Report 
Madam SPEAKER 
: I have received applications under Standing Order 373 from Dr Brash and from the Hon Ken Shirley seeking to debate the release of a report from the Ministry for the Environment on net greenhouse gas emissions. The release is a particular case of recent occurrence involving ministerial responsibility and after careful consideration I have determined that it is important enough to justify an urgent debate being held on it today. Dr Brash’s application was received first and in any case Mr Shirley’s application did not provide me with any authenticating material. Therefore I have given priority to the application I have received from Dr Brash and I call on him to move the motion. 
Dr DON BRASH (Leader of the Opposition) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. We have become accustomed to Labour’s incompetence: 111 emergency calls the National Certificate of Educational Achievement Te Wananga o Aotearoa the Immigration Service the huge waste in the tertiary education system hip-hop tours the failure to accelerate road building and the “chewing gum Budget”. But nothing compares with the monumental scandal that is Labour’s ratification of the Kyoto Protocol. 
In the 2002 election campaign National argued against New Zealand being the only country in the Southern Hemisphere to ratify the Kyoto Protocol. After the election Labour pressed on intent on being the most virtuous of all the countries in the Southern Hemisphere despite the fact that Australia refused to ratify the United States refused to ratify and the big emitters of Asia India and China were not obliged to make any reductions in their emissions. Of course we should ratify Labour argued as our contribution to dealing with the serious problem of global warming and by the way not to ratify would be like “setting fire to a very big cheque”. That was because the Government had calculated that we would have a net credit position of 55 million tonnes of carbon which could be sold on the international market and was worth $825 million at the Government’s price of $15 a tonne or $2.1 billion at the current international price of $38 a tonne. It was easy to be virtuous with a prospect of a pay-off of between $800 million and $1.2 billion. 
But there were always doubts. Early last year Alex Sundakov of the consultancy firm Castalia Strategic Advisers concluded that the Government’s figures were wildly optimistic. It had assumed that emissions from the agricultural sector would grow over the next 10 years at a fraction of the rate at which they had grown over the decade since 1990 but he could find no justification for that assumption. It had assumed that total energy emissions would actually decline from current levels over the next decade but he could find no justification for that assumption. It had assumed that new plantings of Kyoto Protocol forests would continue at 30000 hectares per annum but he argued that new plantings were likely to be well below the assumed 30000 hectares per annum. It had assumed that non - Kyoto Protocol forests planted before 1990 would be replanted in their entirety as they were harvested but he argued that a significant and growing proportion of non - Kyoto Protocol forests would not be replanted once harvested. Taking those factors into account he concluded early last year that there would not be a credit balance of 55 million tonnes but a debit balance of 7 million tonnes and that was just in the first commitment period between 2008 and 2012. 
Of course Pete Hodgson rubbished Dr Sundakov at that time. He stated that Castalia Strategic Advisers’ reports were “undermined by a combination of methodology errors and forecasting assumptions at the bottom end of credibility”. He went on to say that any liability under the Kyoto Protocol was “unproven and unlikely”. He also trumpeted the fact that New Zealand “will be one of very few seller nations in the first Kyoto commitment period.” Now we know that far from being pessimistic Dr Sundakov was too optimistic. Now we know that the Government itself estimates that the position is not a credit balance of 55 million tonnes and not even a debit balance of 7 million tonnes but a debit balance of 36 million tonnes. Instead of a financial asset worth between $825 million and $1.2 billion we face a financial liability of between $540 million at the Government’s price of carbon and $1.4 billion at the current international price of carbon. So we are somewhere between $1.4 billion and $3.5 billion worse off than when Labour blithely ratified the Kyoto Protocol late in 2002. 
Of course the bill could be much higher if the international price of carbon escalates above $38 a tonne and it will certainly be very much higher if New Zealand stays in the Kyoto Protocol during the second and subsequent commitment periods. Everybody knows that the first commitment period was to be just a softening-up period to get everybody suckered in before being hit with the very substantial reductions in emissions that would be required to make any appreciable difference to global warming. 
This is a Government that offers large numbers of hard-working New Zealanders tax relief of just 67c a week in 3 years’ time but squanders money in a profligate and wasteful way on hip-hop tours more bureaucrats dodgy tertiary courses of the Twilight Golf variety and now the granddaddy of them all an enormous bill as the price of its determination to have New Zealand the only country in the Southern Hemisphere signed up to the Kyoto Protocol. And make no mistake the Government intends to pay that price. Pete Hodgson confirmed last week that he would be buying carbon credits on the international market to cover our projected deficit—probably paying hundreds of millions of dollars to Russia and the Ukraine to make Helen Clark and her Ministers feel good. 
The Labour Government has been guilty of gross deception. It has been guilty of gross deception in more than one way. Not only did it try to tell us that there was a gain to be had in being virtuous on the basis of assumptions that now look wildly implausible; it even tried to hide the facts from the New Zealand public after admitting the truth to the United Nations on 15 April. It told the international community but did not tell the New Zealand public. There was only a fleeting mention of the enormous contingent liability facing the taxpayer in Michael Cullen’s Budget last month. Ten pages into the section on contingent liabilities there was a small note explaining that estimates of New Zealand’s likely position during the first commitment period were not sufficiently robust to warrant formal recognition in the Crown accounts. The Budget listed a whole range of individually minor contingent liabilities but failed to put any number on the little matter of the liability for our projected carbon deficit of $540 million or $1.4 billion or even more. 
To justify participation in the Kyoto Protocol we need to be convinced of three things all of which are highly contentious. First we need to be persuaded that global warming is actually taking place. 
Hon Dr Michael Cullen 
: Oh really! 
Dr DON BRASH 
: I tell Dr Cullen that there is some debate about that in the scientific community. Second we need to be convinced that even if global warming is taking place that warming is being caused by human activity and specifically increasing emissions of carbon dioxide and other greenhouse gases. There is some debate about that in the scientific community. Third to justify participation in the Kyoto Protocol we need to be convinced not only that global warming is taking place and that that warming is caused by greenhouse gases but also that doing something to reduce emissions at enormous cost is in some sense commensurate with the potential gain. That too is hotly contested. Bjorn Lomborg the famous Danish environmentalist does believe the world’s climate is warming and does believe that it is being driven in large part by the emission of greenhouse gases. But he regards the enormous costs of reducing greenhouse gas emissions as wildly disproportionate to the potential benefit in terms of a slightly cooler global climate. Even the UN Intergovernmental Panel on Climate Change which has been the main driver of the Kyoto Protocol has calculated that if the Kyoto Protocol was fully implemented it would slow the expected rate at which the Earth’s temperature increased by 6 years. 
Brian Connell 
: How much? 
Dr DON BRASH 
: By 6 years. Instead of a global temperature rise of 2.1 degrees Celsius occurring by 2094 it will be postponed to 2100. That is not much of a benefit relative to the estimated cost of implementing the Kyoto Protocol of US$1 trillion or NZ$1.4 trillion. 
Labour has signed New Zealand up to a very bad deal. It was so intent on impressing its socialist friends in Europe that it forgot the enormous cost to New Zealand taxpayers. It convinced us all that we could be virtuous and get more rich by producing a set of assumptions that even at the time looked wildly optimistic and now have been shown to be so. Labour has been shown to be totally incompetent unwilling to listen to advice that it did not want to hear and guilty of being grossly deceptive in failing to include that potentially enormous liability in the Budget last month—a month after the size of the potential liability had been advised to the United Nations. 
The National Party cares deeply about the environment. We value clean air and we value clean water. We value New Zealand’s wide open spaces and want to keep them in a condition such that our children and our grandchildren can enjoy them. Before the election we will be announcing our policy to protect and enhance our environment. But the Kyoto Protocol is an incredibly expensive way to try to reduce global warming by a very small amount in 100 years’ time. Before last Thursday’s shock announcement National was committed to scrapping Labour’s carbon tax—a tax that is calculated to add $4 a week or $208 a year to the costs facing every New Zealand household. We were also committed to withdrawing from the Kyoto Protocol from the commencement of the second commitment period starting in 2013 unless all other significant countries were engaged in meaningful programmes to reduce greenhouse gas emissions. 
In the light of the enormous cost to New Zealand even during the first commitment period the scientific uncertainties about global warming and the relationship between possible warming and greenhouse gases the totally disproportionate cost of reducing greenhouse gas emissions and the fact that most of our major trading partners have not taken on any obligation to reduce greenhouse gases the Government should undertake an immediate formal review of our continued participation in the Kyoto Protocol. That should include an independent assessment of New Zealand’s likely carbon balance in the 2008-12 period the viability of a major programme of forest planting on New Zealand’s eroding hill country to increase our carbon credits and the risks to New Zealand of exporting jobs to other non - Kyoto Protocol countries in the Asia-Pacific region. I can assure the country today that it will not find a National Government spending hundreds of millions of dollars—potentially billions of dollars—buying carbon credits from either Russia or the Ukraine. 
Madam DEPUTY SPEAKER 
: I call the Hon Michael Cullen— 
Hon Dr Nick Smith 
: Here’s a guilty man. 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
: 
 Ha ha! Oh dear oh dear! That is what the courts said about Dr Nick Smith of course. 
The first question we have to ask ourselves is what that stream of greenhouse gas emissions added to the sum of human knowledge accompanied by all the agricultural emissions from around Dr Brash from the National Party benches. We have learnt two things. Firstly the member opposite cannot see more than about 2 or 3 years into the future. He is a myopic politician with no ambitions for the long term at all. He merely wants to get into power no matter what the cost. 
Secondly every time an issue comes up now the National Party’s answer is to go back to the past or to have a review. The big announcement on climate change—to really frighten the Chinese and the Indians into joining up to the Kyoto Protocol—was that we should have a review of our emissions from 2008 to 2012. 
Thirdly—let us bring the short fat one from Tamaki back to life and let us have National Party policy from the 1970s—it is the forestry encouragement grant scheme. Let us pay people to plant trees in places that can never be reached for harvest as we already have throughout some areas in the East Coast of the North Island. 
By himself Dr Brash cannot judge global warming. He has sort of admitted now that the science says it is there. He has sort of admitted that it is done by humans. But of course he is a bit like Bill Birch in that respect. He is one of those people for whom when he walks into a room the temperature goes down hence his scepticism about global warming and the future of where we are going. 
So why is there a change in the numbers? The first reason why we moved from a net surplus to a net deficit is simple. The economy has grown faster than it was predicted to do on the basis of National Party experience. The forecasts at the time were made on the basis of growth being around 2.5 to 3 percent probably because under National and even with it coming off a very low base in 1991-92 it averaged 3.1 percent. But we have now averaged 4-plus percent and that will be shown as the figures move forward over the next few months. That will mean more emissions because economic growth tends to create greenhouse gas emissions. Dr Nick Smith can do it all by himself of course. 
Secondly we have not been planting forests at the same rate as predicted. Why? 
Hon Dr Nick Smith 
: Because you destroyed the market in the sector? 
Hon Dr MICHAEL CULLEN 
: No!—because wood prices have been low over the last 2 or 3 or 4 years. It is called markets I tell Dr Smith and his party is supposed to believe in them. His leader believes that they are the gods of economic life—that they are all that rules in terms of the economy. People have not been planting trees because they judge they will not make a profit out of those trees over the long term. 
Hon Dr Nick Smith 
: Why are your numbers wrong? 
Hon Dr MICHAEL CULLEN 
: But Dr Smith says: “Don’t worry. We’ll give you the pills and you can plant trees and they’ll pay some money at some point in the future.” 
The third reason I will admit is that officials got wrong a range of technical assumptions. What that also tells us—and the National Party might care to take note of this—is that when one is trying to work out the difference between two large numbers between emissions on one side and offsets on the other quite small changes can lead to quite big differences in terms of the delta between the two. Mr Williamson is nodding his head. I will just dwell for a moment on the fact that that is precisely true of fiscal numbers where to base all one’s spending on the assumption of getting that precisely right is very very dangerous indeed—particularly when a party insists on getting the numbers wrong in the first place as National does. 
Why does the Kyoto Protocol remain important? Because the overwhelming view of scientists is that there is global warming. 
Hon Ken Shirley 
: No not true. 
Hon Dr MICHAEL CULLEN 
: Oh yes it is. The Royal Society of the United Kingdom made a specific report that is a word-for-word answer to the idiocy of the ACT party—thank God that party will be disappearing from the face of this earth come the next general election! There is sign-up from the heads of the institutes of science of all the G8 countries plus the three largest non-G8 Third World economies—that is China India and Brazil—which all say that there is global warming and all say in fact that it is primarily caused by human activity. I say to Mr Shirley that for people to deny that is to be like those—there are a few in this House—who believe that trade restrictions and tariff protections are good because they can find one or two economies that believe in them. The overwhelming majority of economists of every hue believe that that is nonsense and that free and fair trade is the way the world should be going in the future. 
An overwhelming majority of scientists who are expert in the climate area say that there is global warming and that it is caused by human activity. Dr Brash of course thinks that that is still debatable. What on earth would he know about that? He has an ancient rusty PhD on protection and foreign investment into New Zealand written sometime back in about the early 1960s. 
He is the man who said as a reason for why we should not sign up that our carbon dioxide emissions were half of those of the US and Australia on a per capita basis. The problem is that nearly half of our emissions are methane—and who triumphantly made sure that methane was part of the Kyoto agreement? It was Simon Upton the then National Party Minister for the Environment who of course was the Minister who negotiated the Kyoto agreement on behalf of New Zealand. National actually signed up to the agreement in 1997 but did not get round to ratifying it. 
Hon Dr Nick Smith 
: Alongside Australia and the United States. 
Hon Dr MICHAEL CULLEN 
: And Australia and the United States—indeed the United States had a change of Government and withdrew from almost every international agreement it could find to withdraw from sadly I have to say. Bill Clinton’s Government helped negotiate the Kyoto agreement. I say good on the Clinton Government but it is a shame the United States is not a signatory and a ratifier of the Kyoto agreement at the present time. 
The science therefore is clear: the Kyoto Protocol is only a first step; much more will be required. We hear all this stuff about its cost but what are we told is the cost to New Zealand? Well I thought it might be about $500 million over 5 years—not an insignificant sum. But the National Party which has promised tax cuts for everybody—and people are expecting about $30 a week more on the average wage and around there as a result as well as a lowering of the top tax rate and a cut of the corporate tax rate a shift of all the money from the current account into the Land Transport Fund an abolition of the carbon charge and a subsidy of the racing industry through the taxation system all at a cost of $4 billion to $5 billion a year—suddenly cannot afford $100 million a year for climate change policy. That sum is only a third of the anticipated revenue from the carbon charge that National has promised to abolish. 
Where is the credibility of the National Party in arguing that this country cannot afford that when suddenly it says we can afford massive tax cuts and increased spending in health and education police and defence corrections and roads and whatever little itch there is all the way around the country right the way down to subsidising the Montecillo Veteran’s Home and Hospital in south Dunedin. No promise is too small or too large for the National Party to make as it goes forward into the election. The cost is not enormous in terms of the Kyoto agreement to this country. 
Hon Dr Nick Smith 
: Just a billion dollars! 
Hon Dr MICHAEL CULLEN 
: Just a billion dollars! The member’s colleagues are promising $700 million a year just on prisons alone if we remove parole. The abolition of parole would cost $3 billion in capital and $700 million in operating expenditure in a year—more than the costs of the Kyoto Protocol in 5 years—to this country. No wonder National is waiting to produce its policy on everything in detail. No wonder it is not going to produce a proper alternative budget; National knows it will not add up. No wonder it is enjoying its brief moment in the sun before the facts come out and the common sense of the people reasserts itself. 
There will be no point in standing here in New Zealand in the year 2050 with our tax rate marginally lower than it would otherwise have been if we are standing in 2 feet of seawater at the same time. It will simply not add up as a future for this country. National members know their tax talk is rubbish but any rubbish is good enough. 
This is like 1990 for National. We remember the promises made that year. It was going to abolish the surcharge: “no ifs no buts no maybes”. It said it would not cut people’s working conditions: “no ifs no buts no maybes”; and so on. 
National members face a disaster in fact as they try to explain what it is they intend to do. What they intend to do is try to two-word their way into Government and hope people do not notice the fallacies of what they are putting forward. And on this one the fallacies are very strong indeed 
Do they really really want the world to undergo increased global warming? Do they want this country which is exposed in terms of being a temperate-climate agricultural producer to undergo increased global warming? In this year alone we have spent on flood relief through central government roughly twice what the Kyoto agreement will cost. 
Hon Dr Nick Smith 
: Floods and global warming? 
Hon Dr MICHAEL CULLEN 
: If Dr Nick Smith does not think there may be a connection between our increased incidence of extreme climatic events and global warming he should go back and continue to play with his Meccano set which led him to an illiterate PhD in engineering somewhere down the track in the past. 
Hon Dr Nick Smith 
: Get out of the gutter. 
Hon Dr MICHAEL CULLEN 
: Well that member is illiterate; I have seen his press statements. He is always illiterate in everything he puts out. 
The reality is that we face a major world issue. The reality is that of all developed world economies we stand to suffer more from moderate global warming than any other developed economy because we are more dependent upon temperate-zone land-based industries than any other. Dr Brash says we are the only developed-world Southern Hemisphere country but there are two such countries—us and Australia. If the sheriff was not in the deputy sheriff was not going to be either when it came to the Kyoto Protocol. The Australians of course are highly dependent upon greenhouse gas emission industries for their welfare and wealth. I still hope that they have the sense at some point in the future to join in the Kyoto agreement so they can influence it. 
But National has to say what its alternative is—I hear nothing! That was a really clear alternative we heard from the National Party. What is the alternative to the Kyoto agreement? Again I hear nothing. Well that was pretty clear too; National does not have an alternative to the Kyoto agreement. Its alternative is tax cuts because as we all know if everybody gets a tax cut global warming will drop. Why? Dr Brash’s version of science is this: if we have a tax cut we can all afford air-conditioning and if we have air-conditioning we will lower the temperature everywhere. We will not worry about all the stuff that goes on in terms of producing electricity for the air-conditioning along the way because he does not have much regard for generally agreed positions in science. 
Hon Dr Nick Smith 
: Tell us about the bungle. 
Hon Dr MICHAEL CULLEN 
: I invite Dr Nick Smith not just to tell us the fact that the numbers were got wrong by the officials; we know that. I want him to tell us the alternative. The alternative given that in 2001 Dr Nick Smith said: “Scientists have good evidence that the emission of greenhouse gases such as carbon dioxide and methane into our atmosphere is irreversibly changing the global climate.”— 
Hon Dr Nick Smith 
: That’s right. 
Hon Dr MICHAEL CULLEN 
: He says: “That’s right.” That is Dr Nick Smith’s position so I now invite him to tell us what he is going to do about it apart from tax cuts and taking away parole from prisoners. 
DAIL JONES (NZ First) 
: 
 I stand to speak on behalf of New Zealand First. I should make it clear that I do not have a PhD. We seem to have enough PhDs in this House to go around. It is a degree that one acquires to learn more and more about less and less and as I hear the speeches made by the various PhDs around this House I come to that conclusion. They do know more and more about less and less and they express it every time they speak. 
I am just a simple lawyer who has had a bit of practice here and there and who tries to get the facts together and reach a conclusion as a result. I look at why we are involved in this thing called the Kyoto Protocol from New Zealand’s perspective. Someone mentioned the name Simon Upton to me and almost straight away things seemed to fall into place. We remember Mr Upton. I knew Mr Upton when I was in the National Party caucus with him— 
Hon Ken Shirley 
: You even look like him. 
DAIL JONES 
: Oh no. I might have looked like him; I have not seen him for a while. 
He also introduced us to the Resource Management Act as we know it now today following on from Dr Palmer who is also a PhD. So one immediately gets suspicious. From the Resource Management Act Mr Upton moved on to the Kyoto Protocol and having brought all that to our attention he then got a very nice job at some conservation agency in Europe. 
Hon Ken Shirley 
: OECD. 
DAIL JONES 
: The OECD. He moved up; I think on the reputation of the Resource Management Act and the Kyoto Protocol. It shows how these things gather their own momentum and how if someone has a good reputation for being good in the environment and having led one’s country down the garden path that person can still be promoted into some agency that will lead a whole lot of countries down the garden path. 
Well where is New Zealand? We are here in the South Pacific. How many countries south of the Equator have ratified this protocol? 
Hon Ken Shirley 
: Only one. 
DAIL JONES 
: Only us; only one. No one else has thought about it. I think Dr Cullen said something about “no other countries in the Southern Hemisphere exist”. Well of course we have South American countries—lots of them. [ 
Interruption 
] They are developing a lot of emissions even more so than that honourable member on the other side of the Chamber. That is what this is all about—greenhouse emissions. They develop plenty of emissions. South Africa is developing plenty of emissions and a lot of those South American countries south of the Equator are developing emissions. None of them are linked to the ratification of the Kyoto Protocol. 
So I ask myself how many countries in Asia have ratified it. There is only one: Japan. That is all. Nobody else in Asia has. China and India have 1200 million or 1500 million cattle—heaps and heaps of cattle—all belching out emissions yet they are not involved in this. Who in Africa is bound to this protocol? Nobody. None at all north or south. In the Americas as a whole only the one country Canada is involved. 
Who then is part of this? Europe is. That is what it boils down to. Europe is making all the mess. It is belching out all the greenhouse emissions and it wants the rest of the world to carry the can for the mess that Europe is making out of it. That is how I look at this from a very simple viewpoint. Europe is making the mess and Europe should pay for it. Why should the New Zealand taxpayer have to carry the can? Why should the New Zealand taxpayer have to pay a $4 carbon tax because European countries are making a helluva mess of the atmosphere? 
Hon Ken Shirley 
: We are making a mess of the atmosphere. 
DAIL JONES 
: The member says that we are making a mess of the atmosphere. Purely on the Kyoto figures alone we make up 0.2 percent of the emissions. 
Hon Ken Shirley 
: 0.04 percent. 
DAIL JONES 
: It is 0.2 percent I think with respect. We are No. 100 on the list and we make up 0.2 percent. 
We get lost in the roundings of other countries. We are so negligible that we get lost in the roundings. For example we are at the same level as Latvia and we are just fractionally above Luxembourg in the amount of our emissions. Of course as an environmentalist I am concerned that if I want to remedy something I want to know what the problem is and I want to make sure it is remedied. 
What is the problem in New Zealand in so far as our emissions are concerned? It is cattle and sheep belching and farting. That is where the majority of our emissions come from. What are we doing in New Zealand to prevent all those emissions from getting up into the atmosphere and drowning us in a few years’ time? Dr Cullen would have us believe that if New Zealand does not do something we will be underwater before we know it. Are we going to put bags on the front of cows? Are we going to put filters on them so that they breathe through a filter and all their ghastly emissions do not go up into the atmosphere? Will we perhaps put an even bigger filter at the other end as well just to make sure? I am sure there are some—[ 
Interruption 
] In the main cattle and sheep making emissions is our problem. If we are going to remedy the situation for New Zealand we should be looking at solving it. But of course we have absolutely no intention of doing that at all. 
How did this problem come about and should the Government have known about it? The answer is yes. Clearly the Government thought it was on a winner. It was going to make some money and confiscate the rights of tree owners in the way of carbon tax credits and pocket them. It did not matter who they were. The Government was going to pocket the profits from every New Zealander Maori or non-Maori who planted trees and add those profits to its Budget surplus—and away it went. 
Government members got a terrible shock today. But should they have been more careful? I asked Trevor Mallard the Acting Convenor Ministerial Group on Climate Change today in question time whether he knew that forests must be planted on grassland to meet Kyoto definitions and whether he should have known that 16 percent of New Zealand forests are planted on scrub so cannot be counted as forests for Kyoto Protocol definition purposes. He was filling in for the Convenor Pete Hodgson and did not really know. But I am informed by a colleague that that issue was discussed at the select committee when this bill was being considered. The Government ought to have known that some of the bases on which it came to its conclusions were false—which in fact the officials knew and the Government knew. The Government was being totally reckless in the way in which it was trying to work out its profits for itself. 
It is well known already that forests must be planted on grassland to meet Kyoto definitions. They cannot be planted on scrub. Yet the Government blindly went ahead despite the fact that 16 percent of New Zealand’s forests are planted on scrub and cannot be counted as forests for Kyoto Protocol purposes. The Government went ahead and said it was going to make a lot of money out of this and tried to bluff the New Zealand public into thinking how clever it was. 
I was reading an article from the  
Independent 
 from before this report came out. It made the point that the projections that were being put forward are wildly optimistic and fail to factor in the downside risk that New Zealand will lose some of its forest. Rising land prices and falling log prices will likely ensure increasing deforestation. The Government’s projections also appear to be in a state of flux. The article goes on to discuss how the Government’s surplus forestry credits have declined from 56 million tonnes to 33 million tonnes primarily as a result of predicted growth in agricultural emissions and deforestation. 
This situation has been known. The debate we are having today should not have come as a surprise to the Government. It should have fronted up and said that all the promises it was making about how much money New Zealand would get as a result of this were totally wrong. Of course New Zealand taxpayers the ordinary men and women who are struggling to make a living and to pay higher interest rates under the new mortgage rate revisions and who are trying to send their children to school and paying these extra fees for primary schools and secondary schools—$400 to $700 a year for their children in the Auckland area—are going to be banged with another tax thanks to this Labour Party. 
The question the Government should have answered in the speech we heard from Dr Cullen is how this mistake could have been made. What is being done to ensure that serious errors are not made again? Are the officials and all Ministers responsible for such an enormous error being held accountable and how? I asked that question today: will the Minister take responsibility? Of course he was not here. He is away on business. It is quite fortuitous that Mr Hodgson should be away on other business today when this enormous issue has come to everyone’s attention. 
Now that we know that the Kyoto Protocol is going to be a net cost to the economy is the Government prepared to consult afresh with business and other interested parties with a view to considering the possibility of withdrawing from the protocol in 2008 as we are entitled to do in accordance with article 27? New Zealand First will only proceed with the implementation of policies for the Kyoto Protocol to ensure they are in harmony with those of our major trading partners and only once a coherent plan has been formulated to allow the appropriate targets to be reached. Our major trading partners such as Australia and the United States are not party to it. Of course China an up-and-coming major trading partner is not involved either. It looks very very unlikely that New Zealand First could possibly be part of this because there is clearly no coherent plan. 
Hon KEN SHIRLEY (ACT) 
: 
 The ACT party is the only party in this Parliament that has consistently and vociferously opposed New Zealand’s signing of the Kyoto Protocol. If the Kyoto Protocol is the answer what on earth is the question? The protocol is a fundamentally flawed instrument. The Labour Government’s foolish adherence to it I believe defies logic. 
The protocol is grossly unfair. How it works is that nations have to meet 1990 emission levels by the first reporting date 2008-12—those OECD countries that have ratified it that is. That is why it is unfair. The rest of the world has to do nothing. Only those OECD nations that have ratified the protocol have to do anything. New Zealand just happens to be the only Southern Hemisphere country that has ratified it. Only two other nations in APEC Canada and Japan have ratified it. New Zealand is the only nation in ASEAN that has ratified it. None of our key trading partners—the United States and Australia particularly—have ratified it. So the protocol is unfair to that extent. It is also unfair to the extent that it has a huge impact on New Zealand. Because of that 1990 arbitrary selection date we are at a huge disadvantage. The Kyoto Protocol is not about emissions per head of population or anything like that. It is about relative emissions—in other words what they are in 2008 relative to 1990. 
 It just so happens that New Zealand had a huge fortunately dependency on hydroelectricity up until the late 1980s but as we know we were not damming or building any more hydro stations and we started developing fossil fuels. So our energy consumption in electricity generation in terms of carbon dioxide emissions is relatively per capita quite small. Conversely the Europeans had the advantage of the breakdown of the Soviet Union. All those huge brown smoke industries of Poland Bulgaria Romania and the Soviet Union itself were pumping out massive pollution—carbon dioxide emissions—and Europe of course has a much lower relative target to meet because of that. So this particular protocol suits the Europeans but it does not suit many other nations of the world. The other aspect is that apart from being grossly unfair and distortionary even the UN scientists on the panel concede that the protocol does not achieve its basic objectives. That is why I ask: if the Kyoto Protocol is the answer what on earth is the question? 
I believe that climate change is a reality. The evidence for climate change is overwhelming but the point to make is that it always has been. Climate change on this planet is very dynamic and it seems that when we have a period of change it can be quite dramatic and more recent work indicates that dramatic changes can occur in decades if not centuries rather than over longer periods. The question then is: to what extent is the anthropogenic effect driving it? I think the mobilisation of fossil fuels since the Industrial Revolution is having an impact. The evidence is increasingly showing that it is having an impact but I believe that pales into insignificance compared with the natural cycles particularly the orbital variations which actually drive the climate on this planet. 
Some members will be familiar with the Milankovitch cycle and the various cycles that go with that. In the last million years we have had a succession of ice ages. Ice ages tend to last between 70 and 100000 years with rather brief intermittent interglacial periods of 15000 to 20000 years. Of course the last big meltdown was about 15000 years ago and we have had a million years of records of the glacial period and on that continuation of that cycle it is clear we are actually heading to the next glaciation in the bigger picture. It might be a few hundred or few thousand years away but that—the next glaciation—is where we are heading to in the cycle and that is based on records going back a million years. 
Then we come to the now and by that we mean the next few decades and perhaps the next hundred years or so and there is sufficient evidence for concern. I concede that and most scientists do but the Kyoto Protocol does not address it and it is very distortionary. This Government in particular I believe has made a number of very foolish policy decisions. It is as if it has gone out and said that New Zealand will put on the thickest hair shirt and will go out to the world and lead the way and change behaviour. That is a very very foolish position to take and I am very surprised—well no I am not surprised that the Labour Government had done it; it seems to be its wont to think it can change the world to that extent. 
When we look at some of the policies the Government has implemented there is actually nothing wrong with market instruments. I was on the Government Working Group on Climate Change Policy in the mid-1980s. Bill Faulkner Guy Salmon Keith Turner who is now with Meridian and myself were the authors of the group’s report  
Climate Change and CO2 Policy: A Durable Response. 
 We recognised that if there is an issue putting aside the science then a market instrument was a fair way of actually implementing any response. But this Government has not allowed any market instrument to work. If we are saying we want more plantings in forestry because new forestry plantation absorbs carbon from the atmosphere—after all carbon dioxide is not a pollutant; it is actually a fertiliser for plant life and it is what drives plant life—we would as part of the economic instrument allow forest owners to trade the economic instrument and the encouragement would have been to plant more forests. But what did this socialist Government do? It nationalised the carbon credits. It said: “Oh no the Government will take those thank you.” so it destroyed the economic instrument. 
Then on the other side of the ledger the Labour Government said it would have negotiated greenhouse gas agreements with industry. So instead of letting the carbon credits be traded the Government said it would make exemptions. It said that if industries lobbied the Government and knocked on Ministers’ doors and said: “We’re a big industry and this is hurting us.” then industry would be able to negotiate with the Government to get an exemption. But that just politicises the process and again destroys the economic instrument. All it means is that the Government is getting its hands on more and more levers that drive the economy—and energy does drive this economy. The other aspect is that we end up with the energy efficient actually subsidising the energy inefficient. So that is a foolish part of it in terms of this Labour Government’s policy. 
We then look at the electricity market and what did the Government decide there? It decided it would slap a tax $15 a tonne on fossil fuels principally coal. But hang on a minute—how does the electricity market work in this country? We have a national grid. We have 200 nodal points of take-off. We run an auction every half-hour and the highest price sets the price. To the extent that Genesis’s Huntly power station is the biggest power station in the country with 1000 megawatts and particularly when our hydro storage is low we have to rely upon Huntly for that baseload and what we call hydrofirming Huntly will be paying the $15 a tonne carbon tax on its coal. 
The point is that everyone else gets that same price so the hydro generators get a windfall profit. And who owns the big hydro generators? The three State-owned enterprises: Genesis Mighty River and Meridian do. So all the Government is doing is taxing the economy and we see all the problems associated with that—as if we are not taxed enough already—and making our industries less competitive than those of our trading partners and most of the rest of the world. So that money is going back into State coffers through the dividend payments from those State-owned enterprises. 
That is not an economic instrument. That is just more State control; more of the Government taking control of the levers of the economy. The policy is doomed to failure and it is about time this Government woke up. Now it has had this rude shock. It always said that not to sign the Kyoto Protocol would be a no-brainer; it was like tearing up a big cheque for New Zealand. Well we have seen the truth of that statement. I remember Pete Hodgson ridiculing me at a private dinner with the head of the Intergovernmental Panel on Climate Change Dr Watson when I suggested that New Zealand may not be in a net situation. He ridiculed me and laughed and said: “Impossible impossible.” Well I say to Mr Hodgson the impossible has come to pass. I think for a number of reasons it was predictable from the outset that that would be the situation. So the ACT party will continue to oppose this foolish adherence to the fundamentally flawed Kyoto Protocol. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 In 1997 I was privileged to be an observer in Kyoto at the negotiation of the protocol when Simon Upton negotiated on behalf of New Zealand the framework for the agreement we now have. There are many things in politics that Simon Upton and I did not agree on but on this issue I have to say that he was staunch. He understood the science. He understood the need for global action. He understood that no country could go it alone and that we had to negotiate the best we could in the circumstances. If Simon were here today I believe he would be ashamed of the backtracking of his party since then. He knew that the Kyoto agreement was not about making money out of environmental disaster as most parties in this House seem to think but about facing collectively the worst threat to human civilisation for some centuries. We know that he proposed carbon charges in the 1990s to make the New Zealand economy more efficient by discouraging energy waste. We know that his Cabinet colleagues many of whom are still here today turned him down and said that we should stick with the energy inefficiency we have and with the financial losses that firms and individuals suffer when they use far far more energy than they need in order to make a dollar or to keep warm. 
Even in 1997 scientists were clear that evidence of climate change had accumulated to the point where we had to take action. Some uncertainties still existed but the balance of probabilities was that we could not ignore the risk until there was more certainty. Since then the science has become much more certain. The language of the Intergovernmental Panel on Climate Change has become stronger and more urgent with every report. Arctic sea ice is melting way before the models predicted it would. Ice shelves are carving off the Antarctic faster than expected. Glaciers around the world are retreating. Extreme weather events floods droughts and heatwaves are more frequent. Just in the last weeks the national academies of science of all the G7 countries have advised their Governments that it is urgent to address the problem of climate change. Last year the Pentagon that fringe greenie organisation in the United States advised the President that climate change is a greater threat to world security than terrorism is. 
The arguments we have heard this afternoon against New Zealand doing anything on greenhouse emissions are interesting. The first argument is that the science is not yet totally certain. Well there are still people who say there is no proven link between tobacco and lung cancer. The risk that the problem is underestimated by current science is at least as great as the likelihood that it is overestimated. Who wants to take that risk that in fact things may become considerably worse than the Intergovernmental Panel on Climate Change is predicting? 
The second argument is that our trading partners have not ratified the Kyoto Protocol. When we look at what the Kyoto Protocol is we see that it was an agreement whereby the OECD countries that had historically caused climate change to date would take action first in a 5-year period and that when they had taken action the developing countries would join the party and make some commitments too. Only two significant countries in the OECD have not ratified the protocol—the United States and Australia. 
The third argument is that as developing countries are not part of the agreement why should we do anything? Why should we who have contributed for 160 years to climate change by cutting down two-thirds of our forest and burning large amounts of fossil fuel do anything when the likes of Africa which has always contributed very little has done nothing and when the likes of China which still uses about a tenth of the energy per capita that the United States does still wants to develop its economy? That argument will not stand up. In fact the only chance of getting those developing countries particularly China and India to join an agreement to take action against climate change is if the OECD countries act first. 
The fourth argument is that we are so small and insignificant that we should just free ride on the efforts of everybody else and that because we cannot make a difference on our own we should not do anything. Actually the United States cannot make much difference on its own either. No country in the world can make a big difference to climate change—only countries acting together can do so. 
Just for the information of those who think that New Zealand is so clean and insignificant I say that our total climate change emissions are double the per capita average for the world. When we include the developing countries as well as the developed countries we see that we are emitting twice our share of the total. What gives us the right to go on doing that? 
Of course the Kyoto Protocol will not solve the problem. It is a tiny first step in the incredibly difficult task of international negotiations to take action on the most difficult challenge we have ever been faced with. Energy cuts right to the heart of the industrial society and our way of life. It is much much harder to implement the Kyoto Protocol than to implement the ozone treaty and the Montreal Protocol that we agreed to in order to prevent ozone destruction. Chlorofluorocarbons are much more dispensable than energy is. So the Kyoto Protocol will not solve the problem but there is nothing else on the table. There is nothing else that will bring countries together around the table every year to have negotiations to build on it. As the science accumulates there will be a forum under the Kyoto Protocol for countries to discuss how to take action. The second commitment period may have an entirely different approach to targets from the first commitment period. That period has not even been negotiated yet. Anybody who thinks like Alex Sundakov—who thinks he can predict what our commitments will be in the fourth commitment period when nobody has even started negotiating the second commitment period—is quite frankly away with the fairies. I am amazed that people in this House would believe that kind of rubbish. 
I move on to the projections that were released as something of a bombshell last week. They are actually just that—a set of a predictions. They are based on a whole lot of assumptions some of which I think are very questionable—such as that the price of oil will go way back down from US$59 per barrel where it is today to US$30 per barrel and stay there right through the Kyoto Protocol period. Does anybody actually believe that? Even if we did we would have to accept that there will be no effect from our investigation and research into agricultural emissions and from our attempts to control methane and also have to believe that there will be absolutely no effect at all from our National Energy Efficiency and Conservation Strategy. I think that that is a pretty extreme set of assumptions. The set of predictions state that 7½ years from now we will have overshot our target. When other people and other parties see those figures they see a financial loss—New Zealand might have to pay some money to Russia. When the Greens see those figures they see an environmental loss. They see accelerated climate change. They see drought that causes mass starvation in Africa. They see the vulnerability of New Zealand to new pests and diseases. They see huge shifts to our rainfall patterns agriculture and coastal settlements. 
Labour crows that the figures have changed because of our huge success in increasing economic growth. I am sorry but the atmosphere does not care how fast Labour has grown the economy; it cares only whether Labour has managed to manage its greenhouse gases while it did that. Labour has not been prepared to face up to the costs of growth. We cannot just grow the economy indiscriminately without taking care of the side effects caused on the way. Those projections show a trend but they do not show destiny. It is entirely within our power to turn that loss into a profit if we decide now that it is what we want to do. It is 2½ years until those administering the Kyoto Protocol even start counting and it is 7½ years until they finish counting our emissions. Energy drives our economy but energy waste does not. There are huge opportunities in New Zealand for greater energy efficiency. People who work in the field tell me that they can walk into just about any industry and find ways of saving very cost effectively 20 to 30 percent of the energy used by that industry with measures that will pay for themselves in a year or two. Is that not better than either changing the climate or paying Russia? 
Some people have been pushing for fuel efficiency standards for vehicles for 30 years. We still have no efficiency standards for vehicles. We are still spending money on vast motorways that we will not have the fuel to use. We are not developing our rail and public transport to the extent we could. We are accelerating the use of coal. Instead we need to plant more forests for fuel and for catchment protection. If the Greens get into Government we will not be paying $1 billion; we will have future-proofed and carbon-proofed our economy with renewables energy efficiency and forestry. 
LARRY BALDOCK (United Future) 
: 
 I rise to speak on behalf of United Future in this snap debate on the revised estimates that were released last week by the Convenor Ministerial Group on Climate Change. The first point I want to make is to correct Mr Shirley’s assertion that ACT is the only party in this House that has consistently opposed the Government’s ratification of the Kyoto Protocol. From the moment I entered Parliament as a part of United Future we have opposed the ratification of the Kyoto Protocol. In fact within 1 month of the election in 2002 we issued a press release that stated very clearly that we did not think that signing up to the Kyoto Protocol was in New Zealand’s interests or in the interests of the world environment. I think the information that was released last week further substantiates our position on that. 
 The second point I want to make is that it is important to realise that if there were a threat to us as human beings on this planet and a threat to our way of life and if we were convinced that the remedy being proposed would deal with the problem all of us in the House would want to act responsibly and would probably be prepared to pay the cost no matter what it was. 
The fact that we may now find ourselves in a situation where we have to pay $1 billion is not really the issue. The issue is whether that money will be well spent and will really address the problem or whether it is simply money that will go down the gurgler and be wasted without addressing the problem that people see coming. 
When we raise questions about the Kyoto Protocol it is not helpful to be accused of being irresponsible or lacking in environmental concern and so on. This is a very serious matter that ought to be debated properly and openly and all questions should be asked answered and addressed without people throwing mud at each other and one accusing the other of not being as environmentally friendly. The real question we ought to be asking and we ought to allow to be asked is whether the Kyoto Protocol is the answer to this problem. In question time earlier today I raised the matter of what is occurring in Europe which I believe is one of the major issues with the Kyoto Protocol and that is that it has been founded on very very poor estimates right from the beginning. 
It is not really surprising that we suddenly have within 1 year a change from a 30 million tonnes surplus to about a 30 million tonnes deficit because this is the nature of the Kyoto Protocol all over the world. In a recently convened meeting in Europe most of the European nations admitted that they also have hugely underestimated their obligations under the protocol. When I read out the percentages that they have underestimated or that will be over-reported at the next official meeting at Kyoto it is clear to anybody with any common sense to see that they will not be able to meet those targets. 
Portugal is over its promise by 77 percent Spain by 61 percent Greece by 51 percent Ireland by 41 percent Luxembourg by 31 percent Finland by 27 percent Denmark by 26 percent and on the list goes. All those nations were relying on England and Germany having some surpluses that they could take up. The next bombshell to hit us will be England or Germany admitting just like we have that: “Oops! We got it wrong and we do not have any credits to make available to the rest of Europe.” That will be the next bombshell that will come. Then Russia will realise that its economic growth has been so substantial and underestimated that it too will be in a deficit situation. So we will end up with a situation where there are no sellers of any carbon credits and therefore the Kyoto Protocol will in effect fall over. 
The carbon trading mechanism will not work if there are no sellers unless perhaps—and this might be the one positive that will still exist within Kyoto though I am not entirely convinced—there is the opportunity that if one cannot buy credits one can earn them by going out and helping a Third World nation reduce its emissions. Perhaps if the world were committed to spending billions and billions of dollars in the developing world to reduce its emissions and to get rid of very highly polluting kinds of energy development it would be a positive for the whole world. But I very much doubt that we will ever arrive at a situation where Europe or even New Zealand would be prepared to spend a billion dollars in foreign aid in terms of earning Kyoto credits to make the whole thing work. But it is a possibility and I will keep my mind open in that regard. 
I think that as European nations begin to realise that they have signed themselves up to something that is actually very very costly the whole political spin machine will probably change in the world. Instead of reading headlines and hearing statements from politicians all over the world about this being the worst thing we could ever face and about this resulting as Jeanette Fitzsimmons has said recently in mass starvation in Africa we will find that the language changes and that some of the scientists who have deep concerns about the basis of the Kyoto Protocol will start to be heard a bit more clearly and Governments will shift their emphases because no one will be committed to paying the kind of money that is looming on the horizon from the Kyoto Protocol. 
The second question that we ought to be allowed to ask is not only whether the protocol is the answer but whether the money that will be spent really makes a difference and whether it is cost-effective. For many many years when it came to building roads in New Zealand we had a thing called the benefit-cost ratio whereby if we had a road that needed to be fixed on which people were being killed we had to wait for a few more lives to be wasted on that road before the Government would spend the money. If we applied that same kind of logic to the Kyoto Protocol I believe we would decide that it was not worthwhile spending the money because we have no guarantee that it would very much alter what is predicted to come upon us. I share Ken Shirley’s scepticism about whether this is the whole cause of the climate change that is being discussed. 
The international office for climate change estimates that the global temperature might increase by 2.1 degrees centigrade by 2100. Even if all the Kyoto targets were met—and as I said earlier that seems very unlikely because of the recent estimates out of Europe for example for the first commitment period; the estimates for the second and third commitment periods are even more dramatic and impossible to meet—we have an opportunity to reduce that 2.1 degree temperature increase by 0.02 degrees centigrade by 2050. By 2100 it could be reduced by 0.14 degrees centigrade. We have to get the point in the right place. We are not talking about a 1 degree reduction; we are talking about 0.14 degrees which will not make a lot of difference and as Dr Brash pointed out earlier it will perhaps delay the inevitable by a matter of only 6 years. 
Therefore it makes no sense at all in our opinion to be pursuing the Kyoto answer to the problem. One of the things that actually concerns me is that every now and again scientists have it all worked out and they say that they know what will happen and how it will occur and then along comes some report that completely flummoxes their theory up until that point. In fact we have to admit that that occurs quite often in the scientific world. It is amazing what human beings know and the increase of our knowledge is quite dramatic but we still do not know everything; we are still learning an incredible amount every day. This is borne out by the fact that every now and again another report comes along that completely tips everything upside down like the report that came out recently from the Intergovernmental Panel on Climate Change in which Erich Duchemin a consultant for the panel stated that the green image of hydro power as a benign alternative to fossil fuels is false. In his report he stated that they may now realise that in fact hydro dams may be emitting as much as three and a half times what is produced by generating the same amount of electricity from oil. When those reports come out those who are committed— 
Hon Rick Barker 
: I don’t accept that. 
LARRY BALDOCK 
: This is from the Intergovernmental Panel of Climate Change and I would be happy to give it to the member afterwards to read and he can read the whole theory behind it. Those committed to the Kyoto Protocol simply push their heads further into the sand and carry on without actually evaluating whether the focus on renewable energy is the total answer. If in fact we have carbon dioxide coming out of hydro dams to the extent that those reports from Brazil indicate then we should be rethinking that also. 
Then we have respected people like Augie Auer who has guided us in our weather analysis on television for many years claiming that the Kyoto Protocol is just nonsense. I am looking forward to having a meeting with Mr Auer very soon to hear his theories about what is causing climate change. I think that that is what we all should be doing in this House—having an open mind to debate the issue further. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 The report that we are debating this afternoon shows two very important things. The first is that Helen Clark and Pete Hodgson sold New Zealand a pup. When they ratified the Kyoto Protocol against the vote and the advice of the National Opposition they said that National’s policy meant that National would burn up a cheque for hundreds of millions of dollars. The reality is that they were not just a little bit wrong; they were a $1 billion wrong. The second point is that for all that Government members say they care about climate change this report shows that emissions under Labour have been growing at over twice the rate that they were growing at under the last National Government. 
The report does not show just those two facts. It also shows that we have a dodgy arrogant Government that will go to extraordinary lengths to hide the truth from the New Zealand public. This matter comes on the heels of scandals about the 111 call system and about our Immigration Service of the issues of hip-hop tours and of $234 million being wasted on Te Wananga o Aotearoa and on the tail of the National Certificate of Educational Achievement (NCEA) debacle where thousands of New Zealand students were robbed of their proper scholarships and qualifications because of the incompetence of this Government. The real parallel with the mess over the NCEA is that no one will take responsibility for this billion-dollar bungle over the Kyoto Protocol. Nobody will put a hand up to say he or she is the person who goofed and got it wrong. In fact that actually speaks volumes about the arrogance of this Government. Let me read out what the Government said when Alex Sundakov said a year ago that he was really worried for New Zealand because he did not think we were going to have a big surplus of credits. What did the Government say? The Government said that he was “at the bottom end of credibility”. That is what Labour said when he challenged it. Its members went even further than that by saying that Alex Sundakov was in the pockets of business and just anti-Kyoto. 
What happens with this Government is ugly. If anybody dares to question its policy as to whether something is in New Zealand’s interests and if the Government is caught out in telling porkies it just gets ugly. Earlier Dr Cullen decided to rubbish my PhD thesis in the House. Another Labour member somehow suggested that I should be going to the pharmacy to get medicine. It speaks volumes— 
Darren Hughes 
: Why would they say that? 
Hon Dr NICK SMITH 
: Because Labour members are not prepared to answer the real questions. They just get personal and nasty when what they should be doing is answering those questions. Simon Carlaw the head of Business New Zealand questioned the Government’s Kyoto figures and he was told he was “incapable of dealing with facts”. Those members do not apologise. They have gone out and destroyed the reputations of professionals— 
Hon Ken Shirley 
: It started with Kit Richards. 
Hon Dr NICK SMITH 
:—like Kit Richards Simon Carlaw and in respect of this particular issue Alex Sundakov. Yet those professionals were right—absolutely right. Has any Government member been prepared to apologise to the people whose reputations they sought to destroy simply because those people had dared to question this Government’s policy? [ 
Interruption 
] Well Judith Tizard steps in. Why did Pete Hodgson damn Mr Sundakov and say that he was all wrong when in fact it was the Government that was all wrong? 
I also want to set out for the record the paper trail that shows just how dodgy the behaviour of this Government is. The report here tells us that the United Nations was told of this huge bungle on 15 April. On 15 April the Government submitted a report stating there had been a huge bungle. Now the Government delivered the Budget on 19 May over a month later. Was there anything in the Budget documents where the Government said there had been that billion-dollar bungle? No it hid it. In fact there is an absolute parallel with that. In 1990 Labour Ministers hid the fact that the BNZ was verging on bankruptcy and required a billion-dollar bail-out. In response to that the Fiscal Responsibility Act was passed. By law it required the reporting of all fiscal liabilities. Yet the Minister of Finance who knew there was that million-dollar bungle hid it. The irony though is that the person who is responsible for enforcing compliance with that law is none other than the Attorney-General Dr Michael Cullen himself. Does anybody in this House really believe that the Attorney-General will prosecute himself for misleading the people of New Zealand by not including that billion-dollar liability in his Budget? 
But the dishonesty and deception did not end there. On 9 June my colleague Brian Connell asked the Minister a very straight question in question time. I want to read it out so that the House understands the issue. Brian Connell asked: “Has he received any reports about the amount of carbon sink credits New Zealand will have in the first commitment period of the Kyoto Protocol;”. It was a straight question. The Minister said that the report had not yet been completed. Was that true? Well we have the report here and it is dated May—over 2 weeks beforehand. It has a foreword from the Minister. So Pete Hodgson told the Parliament of New Zealand that the report was not completed when he knew when the United Nations knew and when Cabinet knew that the answer was that it had been. We now have a standard in this Parliament whereby we can be grossly misled—where Government members can say what they like. Members on the Opposition side of the House simply say to Harry Duynhoven and his Government colleagues that telling porkies in not good enough— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No no. The member knows because he is a longstanding member and can remember well—and so do I—that the former Speaker the Rt Hon Jonathan Hunt indicated to that member that he could not use the word “porkies”. I ask him— 
Hon Dr NICK SMITH 
: I withdraw and apologise. What is true is that the Minister said in this House that the report had not been completed when it had been submitted to the United Nations and it had been completed as is clearly identified by its date. 
This Government has made a monumental mess of its Kyoto policy. There is not a hope that New Zealand will be able to meet the commitments that the Government has lined us up for. We will be put into the situation of sending a billion-dollar cheque to the Government of Russia and to the Government of the Ukraine. Now how does that help climate change? Can somebody explain to me how writing out a cheque for a billion dollars from hard-working New Zealand taxpayers and sending it off to the Russians will save a fraction of the effects of climate change? It will not make one iota of difference. The Government has said that it will impose a carbon tax in 2007. That will not make one iota of difference in terms of the amount of carbon emissions. It will not make any difference at all. 
I challenge the next Labour member to tell us what will happen now. The truth is that the Minister does not have a damn idea—not any idea. 
Darren Hughes 
: Oh rubbish. 
Hon Dr NICK SMITH 
: Well Darren Hughes chips in that he does. What will the Minister do to put New Zealand into a position of being able to meet that 36 million tonne debit? 
Darren Hughes 
: He will have a consistent view unlike this member. 
Hon Dr NICK SMITH 
: Oh he will have a consistent view. Well he has flip-flopped all over the paddock so we do not know where Labour stands. Labour members have deceived New Zealand. The Government has not been upfront with New Zealanders. It made a monumental error in ratifying the Kyoto Protocol ahead of our major trading partners. 
National’s position is very simple: the carbon tax will not be put in place. We will not impose a tax on New Zealanders when the Australians and the Americans do not have one. Government members ask about the European Union but I say to them that that is where they are fundamentally wrong. The New Zealand economy has far more in common with the economies of Australia and the United States than it has with the heavily subsidised agricultural economies of Europe. That is why National has the correct policy to take New Zealand forward. The Labour Government has goofed and it should apologise for that. The Minister should resign. 
DAVID PARKER (Labour—Otago) 
: 
 We have heard two speakers from National today. Neither of them has told this country—which is more at risk from the effects of climate change than just about any other country in the world because of our reliance on agricultural production to drive our economy—what they would do. All they have said is what they would not do. They said they would pull us out of the Kyoto Protocol. They said they would reverse the carbon tax. But they have not said what they would do to address the underlying problem. 
National of course has a history of having just simple messages. Its present one is that the answer to everything is: “Cut taxes cut taxes cut taxes.” Its answer to global warming is to cut taxes. What was National’s answer in the 1990s when it went to the election with its bribes? It said: “No ifs no buts no maybes. We’re not going to cut your superannuation and we’re going to remove asset testing.” Of course it did not remove asset testing and it did cut superannuation. National cut the baseline of superannuation for a couple from 65 percent to 60 percent of the average wage. What did it say on education? It made another grand promise when it said: “No more tertiary fees.” I think Dr the Hon Lockwood Smith said he would resign if there were fees. What did he do after the election? Well tertiary fees stayed—he increased them but he still did not resign. National promised that workers’ pay would not be cut. It promised that workers’ terms and conditions would be maintained. What did it do? It brought in the Employment Contracts Act which heralded a decade of very poor economic performance by New Zealand. 
Hon Dr Nick Smith 
: I raise a point of order Mr Speaker. We are having an urgent debate on the projected balance of units during the first commitment period of the Kyoto Protocol. Several times during my speech you ensured that I kept to the topic. I have been listening very carefully to Mr Parker for the last 3 minutes. He has talked about everything but the matter for which special time has been set down. I know that the Government is deeply embarrassed by the billion dollar bungle but I think that Government should have to respond and keep to the Standing Orders in terms of this debate. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Can I thank the honourable member and just say that Mr Parker has not yet had 2 minutes. Of course under the Speakers’ rulings people are given the opportunity to rebut. But I would ask the member now to come to the debate. 
DAVID PARKER 
: I was rebutting the assertion and I remind listeners once again that National did not tell us what it would do; it just said what it would not do. 
Why do we have a protocol? Why does the world with the exclusion of the flat-earthers in the National Party say that global warming is the biggest environmental issue that faces the world? It says that because the reality is that global warming induced by human activity particularly the use of carbon fuels and the production of greenhouse gases including carbon dioxide and methane is changing our climate. That is not a fringe view; that is the normal view amongst scientists. There are a few naysayers left but by far the majority of mainstream scientists from all countries in the world agree that that is the case. That includes the G8 scientist groups who recently said that there is now strong evidence that significant global warming is occurring—air and ocean temperatures are increasing sea levels are going up—and that most of the warming in recent decades can be attributed to human activities. They point out that carbon dioxide levels are higher than any previous levels that can be measured from the last 420000 years. Global warming is a reality. It is a problem. 
Why is New Zealand in the Kyoto Protocol? For a start I suppose we should note that a National Government under the then Minister Simon Upton negotiated the agreement of the protocol’s terms for New Zealand which Labour agreed was the appropriate thing to do and Labour subsequently ratified the protocol when it became the Government. Was New Zealand a leader in this? One would think after listening to the National members that New Zealand is out in front. In fact I think we were about 101st out of 150 countries to adopt the Kyoto Protocol. Mr Shirley said that Europe does not have a problem with Kyoto Protocol targets. What a load of rubbish! It is true that Russia and some of the former border States of the Soviet Union do not but the developed countries in Europe do have a problem with the targets as we heard from Mr Baldock when he told us that those countries are having to revise upwards their estimates of their obligations during the first commitment period. Japan is in as well and Japan and Europe are major trading partners for New Zealand. 
The next criticism we sometimes hear is that these international agreements do not work. Well we really had better hope that this one does. This Government really thinks we should be putting our shoulder behind the Kyoto Protocol because if we do not New Zealand stands to lose a huge amount. We can also look at what has happened with the last example of an international agreement on an environmental matter which concerned gases that cause ozone depletion. New Zealand was one of the countries in on that agreement before some other countries had agreed. Eventually most other countries did agree. Has that agreement worked? The atmospheric research facility at Lauder in Central Otago in my electorate is one of seven or eight leading research stations in that field in the world. It is part of the international effort on atmospheric research—so much so that much of its funding comes from international sources rather than from the New Zealand Government. I was there recently with the Hon Pete Hodgson talking about whether the international agreement in respect of ozone depletion has worked. The research facility staff are not at the point where they can in a peer-reviewed journal stake their scientific reputations on it having worked but they are very confident that it has—that the concentration of ozone-depleting gases in our atmosphere is decreasing and that as a consequence we are seeing the start of the rebuilding of the ozone layer. That for me was wonderful evidence that the international community can make a difference with big problems when it wants to. The ozone issue is not as easy as global warming but it is probably not as important either and we are determined to make it work. 
What have we heard Dr Smith say today? Well it is a bit inconsistent for him to rail against what the Government is doing currently when in 2001 he said in a  
Sunday News  
column on Sunday 4 November: “The problem is enormous. Modern civilisation is based on burning coal and gas. The billions of tonnes of carbon being put into the atmosphere each year are gradually building up. Eventually it will stuff life on Earth. New Zealand can’t ignore the problem. Poor countries refuse to do anything because their emissions are so small in comparison to rich countries like New Zealand.” That brings me to my next point. One of the criticisms that has been made today is that New Zealand should not be in there because some of the undeveloped countries are not yet bound by emission targets. That is true; they are actually part of the protocol but they do not have a target to reduce emissions during the first 5-year period between 2008 and 2012. Why? Because they actually produce fewer emissions on a per head of population basis compared with developed countries like New Zealand so it would be unfair to include them at this stage. 
Dail Jones 
: What about China? 
DAVID PARKER 
: China on a per capita basis produces far fewer greenhouse gas emissions than New Zealand. 
We have heard of various amounts that the revised projections are going to cost the New Zealand economy. The true figure is estimated to be $500 million between 2008 and 2012. It could be less than that because the assumption is that we will not make progress on energy efficiency. I think that is a very conservative assumption because we are pretty wasteful of energy so far in New Zealand so we have some easy gains to be made. Also it is assumed that we will not make any progress on our livestock emissions of methane despite some of the very good research programmes that we have in New Zealand and it is assumed that we will not make as much progress as we might do on forests. 
But let us assume for a moment that $500 million over 5 years is right. Let us put that in context. The last drought in Canterbury in the late 1990s cost about $230 million at the farm gate in lost production. When costs beyond the farm gate were included the drought cost about $1 billion throughout the economy. This year alone the Government has spent about $200 million as a consequence of floods. Both floods and droughts increase in frequency as a consequence of global warming. Indeed the National Institute of Water and Atmospheric Research report dated May 2005 which came out last week analyses the changes in drought risk associated with climate change. This causes me real concern down in Otago my electorate. It is estimated that in Otago—and it is the same in Canterbury and Marlborough—the incidence of drought as a consequence of global warming in the forecast period covered in this report will become between two and four times as frequent. What used to be a one-in-20-year drought will become a one-in-10-year drought or a one-in-5-year drought and when the droughts arise they will be tougher and drier. With the exception of a couple of the big rivers like the Waitaki River and the Clutha River there will be less water in the rivers for irrigation and the droughts will be drier. So the costs of doing nothing are very high for New Zealand. 
In terms of the promises of National members I return again to their theme. What do they promise? They promise tax cuts. This week we have already seen the costing of their new justice policy which would scrap parole for people who are currently in prison. That move would cost $700 million per annum as a consequence of the increased prison population plus $3 billion in capital expenditure for new prisons. The $3 billion would be a one-off cost and the $700 million would be per annum for every year into the future. We have heard it said that the Kyoto policy is detrimental to farmers. We are protecting farmers. This is of importance for all New Zealand but it is of special importance to farmers. They bear the cost of droughts floods and trade barriers into Europe. We are protecting them through this very good policy. 
The debate having concluded the motion lapsed.