Parker DavidHon DAVID PARKER (Labour): Can I add my thanks to Kennedy Graham and to the philanthropists who sponsored the report. They were very generous—they were more generous than they initially realised they were going to have to be because there was a bit more work in this than was realised.If we in New Zealand cannot sustain our environment what country in the world can? I find that a very uncomfortable question because it effectively says that if New Zealand does not the world will not. It is actually not a very nice future for the world or for our children.We know that the planet is already over halfway to 2 degrees warming. We know that if we are to meet our carbon budget and stay below 2 degrees we have actually got to stop the remaining one-third of that—or more than the remaining one-third of that—budget being released. At current trends they will all be out there in the atmosphere in the next 15 to 20 years. We are running out of time. We have got the Arctic soon to be ice-free in the summer; in the centre of the Arctic particularly. We have got record temperatures being recorded semi-annually. We have got glaciers in Greenland New Zealand and Antarctica all melting. We have got whole Pacific Island nations sinking under the rising sea. We seem to be able as a world to cater for that because they are small populations despite the fact that we are losing entire cultures. I remember one of the most frightening things I discovered and other people probably knew this when I first discovered it some years ago: a metre rise in sea level means 30 million Bangladeshi people have to move. Where do they go? Where do they go? I come back to one of the propositions that I thought I heard the Minister saying which was effectively that we have to choose either a clean environment or a strong economy. I reject that dichotomy. We can have both. As others have said I was privileged to be the climate change and energy Minister under Helen Clark's Labour-led Government and I came to that conclusion that I have earlier suggested: if New Zealand could not overcome our environmental problems including our contribution to climate-changing gases there was no hope the world would. I thought that was an incredibly depressing future and therefore I preferred the framing that we can—and we can—and that we should therefore be a beacon of hope rather than another source of despair. The Vivid Economics report at one level does not actually tell us much more about how we can do it—we have always known what are the sources of emission and the sources of emission reduction—but it does articulate a number of scenarios that would reduce New Zealand's emissions.One of the points my colleague Dr Megan Woods made is that whichever scenario you have you need a carbon budgeting agency to help lead you there partly because it depoliticises the route there. As to the hope of getting there I know of no environmental problem to which there is not a solution. There is none. The solution may involve substituting a product and it might cost a little bit more but the new practice costs more only if you are not properly calculating or valuing the environmental cost that you are avoiding. When you boil down environmental policy to get to those ends there are only three choices: education regulation and price. We need all of them. Education does not get you there. When the economic or the profit motivation of private enterprise enables one person to compete against someone who is doing it more expensively but cleaner then you undermine the clean one unless you have a regulational price that stops them being taken out of the market by someone who is willing to cut that environmental corner. We need all three.In respect of the emissions profile of New Zealand it is essentially half agriculture and half energy. The half in energy splits roughly one-third into transport and electricity with industrial processes and industrial heat being the final third of that. Electricity I think is under control. I know National claims credit for that. I put a bit of work into that myself but I will not get into that political debate—Scott Simpson: Truly collaborative.Hon DAVID PARKER: And my predecessors did too. Electricity production has to double from here and it has to be clean in order for us to overcome our transport challenge but we can and we will. The answer to that lies in regulation not price. You know good ideas have many parents but it annoys me that some of the ideas that come from this side are left as orphan children; National will not pick them up. It has been clear for years that we need a regulatory standard to drive the adoption of low-emission vehicles including electric vehicles. That is all you need: a ceiling or an allocation of so many grams per 100 kilometres of travel that descends quite steeply. That will drive the adoption of electric vehicles into the fleet and you do not need any other instrument at all. It is really simple. This Government tinkers around the edges with stupid rules like giving people a free pass when it comes to their contributing to the cost of roads. That is the wrong approach—we need a regulation.In respect of land we need a price on carbon in agriculture. The Vivid Economics report makes this clear at page 17 and says that the underlying economics need the agricultural sector to see a price because that goes to the economics of different land use. It is basic economics. Treasury has said it. It is why the old carbon tax was dumped. Everyone knows it is true and to hear the National Party members still put their heads in the sand and say it is wrong is galling. It was put this way by New Zealand Oil and Gas recently: The current Government has tried to put this beyond the purview of their reviews that they have of the ETS notwithstanding their 'see no evil hear no evil' approach." New Zealand Oil and Gas said this in 2016: "New Zealand's major source of emissions are energy transport and agriculture and if an attempt is made to meet all of New Zealand's emission reductions from energy and transport and biological emissions from the agriculture sector continue to be excluded then the scheme"—that is the emissions trading scheme (ETS)—"will create economic distortions and unfairness and fail to meet its objectives. These flaws will become more pronounced as the economic impact of the scheme increases." The logic is irrefutable and anyone in this House who denies that is wrong. It is simple. You can have 90 percent or even 100 percent free allocation for background emissions in agriculture but if you price their marginal increase in emission or reward them for their decrease you will have the behavioural change and you will drive the land-use change that is necessary.I have not got much more time so I am going to concentrate on what I think is the key recommendation here. Of the three scenarios mentioned in the report for me the standout one is "Innovative New Zealand" by 2050. I am not scared of it. I think there is real opportunity for us to be wealthier as well as cleaner. Land-use change towards higher-value uses of land—higher value than dairying—are the key to reducing our agricultural emissions. Those who were at the Royal Society forum last night would have seen some amazing presentations of how we have now got this sensor technology. We have got the developing robotics. We have got precision agricultural techniques. These are coming together with ubiquitous mobile technology which is also happening. These are coming together to enable a move of far more of our land into horticulture and crop production which is a higher-value land use with a lower environmental impact. There are still some nitrate challenges—but they can be overcome through precision agriculture—but there are no ruminant emissions from it. That is the key and it is an exciting future for New Zealand. It is one that is more profitable. There are the technology jobs as well. Some of the technology we were shown last night of the robotic sensing of grapes and some of the information we had about the robotic apple-picking that is already happening in the United States and will be coming to New Zealand in the next few years just shows what an amazing future we have as a country if we just push towards it. We put a huge impediment in the way of that land-use change by not making agriculture take responsibility for its emissions. They are going up. They will go down. Not only that water quality will improve. We would have avoided the deforestation in the northern forest area around Taupō etc. that sadly happened since this Government took over.There is a solution here. If we are elected agriculture will be coming into the ETS very fast. We have always said it should. We have always said its free allocation should start at 90 percent of 2005 emissions. We have not resiled from that. That is a key step which will drive so much other change. I do not have any more time other than to again express my thanks to all members from various parties who have supported us getting this far through the Vivid Economics report."