Mackey Moana: Climate Change (Emissions Trading and Renewable Preference) Bill — First Reading 
Mackey Moana: Climate Change (Emissions Trading and Renewable Preference) Bill — First Reading 
[Volume:644;Page:13806] 
MOANA MACKEY (Labour) 
: 
 I am very happy to stand up and take a call in the first reading debate on the Climate Change (Emissions Trading and Renewable Preference) Bill. With reference to the member Rodney Hide who has just resumed his seat I say with the greatest respect that if anything there has probably been too much caution and too much scepticism from politicians around the world on this issue. I do not think we could say that that has been lacking. I think that were we ever to rely on science to produce an absolute result on anything we would be very disappointed particularly when it comes to an issue as complex as climate change. 
This issue is not about deciding where we will spend our holidays next year because it will be 2 degrees warmer somewhere and 2 degrees colder somewhere else; it is actually about the very subtle but important changes that happen in ecosystems with very small increases or decreases in temperature which have huge flow-on effects that impact on the rest of our economy. We have had issues in this country such as the importation of honey from Australia which have highlighted what could happen if new pests are introduced into New Zealand. If our bee populations were to suffer that would have huge flow-on effects down to our agricultural sector. This House should take very very seriously any indication that there may be a change in climate. 
Even if we take the very sceptical view and say there is only a 1 percent chance that all the scientists in the world whose research has been quality peer-reviewed are right and we are on a pathway to massive destruction we should take that seriously because by the time we are certain that climate change and its devastating consequences are a reality it will be too late to do anything about it. A year ago the Government released five energy and climate change discussion documents and engaged in a significant consultation process. The 3000 submissions that were received showed the depth of feeling out there in the New Zealand community and those submissions have been worked through over the last year. Certainly we know that around the world the depth of feeling about climate change is high. I take on board what the Hon Peter Dunne said but of course this bill is only one tool in the arsenal to combat climate change. Other policies and other initiatives are also going on. It is not the only one although it is obviously an incredibly important one. 
Other members have gone through at length what the bill does but it is important to highlight the need for New Zealand to play its part. We are second only to Australia in the amount of greenhouse gas we generate for every dollar of economic activity. That means that New Zealand as one of the OECD’s biggest per capita polluters needs to stand up and say we are prepared to take seriously our role in climate change reduction. 
Again in contrast to what Mr Hide was saying earlier there are actually many precedents in the world already for emissions trading schemes. New Zealand is certainly not “well ahead” of the pack when it comes to emissions trading schemes. There are active trading schemes in a variety of pollutants not just greenhouse gases around the world and the largest is the European Union Emission Trading Scheme which I am sure the select committee will take a great interest in. Also various states in the United States have their own schemes including markets to reduce acid rain reduce nitrous oxide and other schemes like that. I think it will be very important for the select committee to look at the experiences of the European Union even though New Zealand has a very different greenhouse gas emissions profile and we are bringing in a different trading scheme. 
I note for members’ benefit that since the beginning of 2005 12000 energy-intensive plants in the European Union have been able to buy and sell permits that allow them to emit carbon dioxide into the atmosphere. The companies that exceed that individual limit are able to buy unused permits. This scheme goes on until the end of 2007 when the second period will start. Although organisations such as the UN and the World Bank have praised the European Union Emission Trading Scheme and highlighted it as a scheme that could form the basis of a global system in practice there have been a few bumps that I think we need to look at during the select committee process. For example the accusation has been made that more permits to pollute have been granted than were needed. Certainly that is something we should look at. 
Of interest is the fact that the European Union now wants to bring the aviation sector into its emissions trading scheme. It produces about 3 percent of the European Union’s greenhouse gas emissions but it has had an 87 percent increase in carbon dioxide emissions since 1990. Following the emergence of cheap air travel in the European Union with £5 fares that is hardly surprising. According to the European Commission someone taking a return flight from London to New York will generate the same amount of carbon dioxide as an average person heating his or her home for a year. That tells us how significant this issue is for the European Union. This proposal has been strongly opposed not surprisingly by the International Air Transport Association and airlines outside the European Union particularly those in the United States have said they will oppose the proposal and plan legal challenges. The US has even warned that it could spark a trade dispute. I think these are issues that the select committee needs to look at when considering our emissions trading scheme. 
A number of suggestions and proposals were considered during the consultation period and it is important to look at why an emissions trading scheme was pursued. From those submissions it was clear that there was broad—although it must be said not unanimous—support to introduce an emissions trading scheme. There was strong consensus that to be fair to all sectors involved over time it had to involve all gases and all sectors and that is what this bill does. An emissions trading scheme is also the most flexible and the lowest-cost option and it enables firms and industries across all sectors to pursue emission reductions and that is something we want to incentivise. 
Also the science tells us that we need to control the quantity of our emissions. We can talk for a long time about where those emissions should come from and which industries can do better but of course over time the important factor is an overall reduction in the total amount of emissions. If we look at New Zealand’s current net position we see that our emissions are set to continue to rise if we do not introduce measures now to stop that. This bill is an important part of that. The good news for New Zealand is that we can in a cost-effective way reduce our emissions substantially through both a range of recently announced policies and this emissions trading legislation. 
Of the sectors that will be brought in a lot will be said about the agricultural sector. There has been a large amount of discussion about the time frame for bringing in the agricultural sector. Unlike most developed countries almost half our emissions come from the agricultural sector. We are unique in the world in that respect. It is our single biggest source of greenhouse gases. One-third is from nitrous oxide and approximately two-thirds is from carbon dioxide—a by-product of partial digestion in ruminant animals. A fair and equitable emissions trading scheme I think we all agree must over time include agriculture as well as all the other big emitting sectors. Part of the reason is there is huge opportunity within our agricultural sector for low-cost greenhouse gas emission reductions. It would be a huge cost on the rest of the economy if we were to exclude them and not get the benefit from the potential that lies within that sector. It would also be unfair on all the other sectors and on the taxpayers who would have to carry the burden of those emissions if this sector was not brought in to play its part. 
But we have acknowledged that its inclusion is complex and therefore it will not happen till after the first commitment period although as already indicated monitoring of this sector will commence well before then. Minister Parker has said that when the sector joins the scheme the Government would prefer to impose direct obligations on processing companies rather than individual farmers but many approaches will be investigated and all options will be looked at. Fortunately I think our agricultural sector is known for being adaptable and it is known for leading the world. We know we have a lot to lose if we open ourselves up to false barriers to our trade from markets that are prepared to say they will not deal with a country that does not have an emissions trading scheme. We are already world leaders because we know that we produce 1 kilo of meat or 1 litre of milk far more efficiently than anyone else in the world does. 
I welcome Federated Farmers’ response to this bill and their commitment to being part of the solution. The challenge has been firmly laid at their door and the Government is coming to the party with an investment of $175 million over the next 5 years in a plan of action for land management and climate change and in science and technology. Although work has been done on nitrogen inhibitors methane reduction research is still in its relative infancy and it holds huge potential. The benefits to New Zealand of that could be not only greenhouse gas reduction and the trade benefits that would come from that but also the use of that technology around the world to bring in other countries and to ensure that once again New Zealand is seen as a leader in assisting the entry of the rest of the world’s agricultural sector into the Kyoto Protocol. That perhaps could also allay many of the concerns around the world about the implication for food supplies of the Kyoto Protocol. No other country is looking to bring agriculture in at this stage although the European Union reform of the common agricultural policy has led to some reduction in greenhouse gases and what New Zealand is doing here is being watched with interest. 
We have addressed many of the other issues in other speeches today but I just want to say that the select committee will have a range of important options to look at. One that has been pointed out is minimising environmental leakage which is going to be extremely important and also making sure that as the methods of measuring greenhouse gases change over time any scheme that we put in place here is able to adapt to that. Thank you Madam Assistant Speaker.