Clark David: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — Third Reading 
Text is incorporated into the Bound Volume 
Clark David: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — Third Reading 
[Sitting date: 08 November 2012. Volume:685;Page:6463. Text is incorporated into the Bound Volume.] 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 That was a short and interesting contribution from that member opposite David Bennett. Probably— 
Hon Members 
: Short. 
Dr DAVID CLARK 
: It was short say my colleagues. They are more than willing to agree with that statement. 
There is actually not much to say. I think that speech spoke for itself but I do want to take up some of the earlier points raised in the debate on this matter and in particular firstly some of the points raised by Andrew Williams who indicated that New Zealand First would not be supporting this bill the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. 
I was confused by some of his logic in his argument because some of it to me seemed to be an argument for supporting the bill and some of it was against. He was concerned about the cost to taxpayers of the international Kyoto agreement. We have signed up as a country to the agreement. Indeed Jenny Shipley signed up to it originally and it was ratified by Helen Clark. So we know that is something that has happened. 
The original emissions trading scheme that was brought into this Parliament was supported by that member’s party the New Zealand First Party. So New Zealand First supported it coming into legislation. If it is opposing the bill on the basis of the fact that it will now cost taxpayers more to meet those obligations then that I can understand because that is indeed the effect of the bill. The bill is designed to increase the subsidy to polluters to prolong the period in which polluters are not in the scheme and to make sure that polluters do not begin to meet the costs of their pollution thereby keeping industries trapped as they are today and without change—in effect discouraging businesses from making positive contributions in the climate change area. 
The bill as it was originally drafted was designed to encourage businesses to consider carefully their investment decisions when making decisions around future infrastructure and investments to ensure that they did not invest in carbon-intensive activities unless they thought they had a very real advantage internationally in that area and therefore could afford the offsets that would be required for whatever activity that might be. That might be for activities around mining and producing the materials necessary to make windmills which make a longer-term contribution or solar panels or whatever it is. There are reasons as we know that many of today’s activities that are regarded as amongst the dirtier activities are actually required in the shorter term to take our country forward. 
The scheme as it was designed was designed to ensure that those industries that were engaged in those things that had an environmental cost were encouraged to offset that cost and also to consider whether there would not be a better way of doing things. The changes proposed in this bill make that question a little less directly posed because the carbon price is effectively lowered with the two-for-one deal extended indefinitely by this Government. So already the Government had offered to pay for half of the pollution made by those industries that have not transitioned to a lower carbon solution. Now it is saying it will do that for ever and again is advantaging those businesses at the cost of taxpayers generally because of course it is the taxpayers—when the Government offers those subsidies to polluters—as a whole who end up paying for meeting our Kyoto obligations that the Government has signed up to. So it is effectively a scheme that is designed so that taxpayers pick up more of the bill. It seems I guess at least consistent with the kind of ill-thought-through legislation we have often seen this National Government bring to the House: legislation that increases costs on business and that means the taxpayer picks up the bill. 
 But I want to strongly suggest that it is foolish for the long-term future of this country. The original scheme was itself fairly modest. It set out expectations of a future carbon price and asked businesses to be making decisions and consumers to be making decisions that helped transfer New Zealand into a future lower carbon economy that would be competitive in the years to come and also obviously concerned with doing its fair share and its bit towards reducing emissions on our planet. 
We know and we acknowledge and the countries that signed up to Kyoto acknowledge that the world needs to move to a low-carbon future if there is going to be sustainable life on this planet. In order to do that we need mechanisms to achieve that. An emissions trading scheme is just one such mechanism. The Government signed up to the Kyoto obligation. It is not at this stage proposing to renege on its international obligations. It is not proposing that we pull out of the UN agreement we have signed. It has said: “We’ll meet the costs we’ll meet the whatever billion dollars it costs but we’re actually going to shove that on to the taxpayers. We’re not going to encourage businesses to change. We’re not going to provide the incentives. We’re going to provide the subsidies to not change. We’re going to encourage businesses to stay stagnant. We’re not going to encourage them to change and we’re certainly not going to reward those relatively that are making the positive change.” 
I think that is disappointing. I think that is very disappointing because this is a Government that talks a lot about business but often makes changes that are actually bad for business. Again this legislation actually increases the uncertainty for business. We know that businesses that face costs associated with their emissions are not always going to be happy about that. When I worked on the original legislation I remember talking to businesses of higher energy intensity. People who were their representatives told me: “Look we will squeal. We will squeal if you put a price on carbon. But we’ll squeal a lot louder if we don’t have some certainty around it if we don’t have a neat transition in.” 
What businesses really want is certainty for planning so they can make wise investment decisions that are in the interests of their business. The role of the Government is to make sure that those wise business investment decisions are aligned with the wider interests of society. What we see clearly in this bill is a Government that is reneging on its responsibility to align the wider interests of society with business interests. 
Let me give some specific examples. The transition phase—National expects to end the transition phase by putting a date back in using its review system. That creates regulatory uncertainty. In the agricultural sector the National Government intends that agriculture will enter at a date set by its review of the scheme. Again that is creating uncertainty. Businesses cannot plan in that environment. It will depend upon the international negotiations the Government of the day and a range of other factors. It is very hard to do business planning on that basis. So it is disappointing for business. 
It is particularly disappointing in the agricultural sector where the costs to be imposed were just 5 percent of pollution. Although it would have placed New Zealand dairy products at a premium place in the market because it would be shown that we were taking our international obligations seriously instead we have a situation where New Zealand is seen to be fading away from its international obligations. It has high per capita emissions and our international reputation is taking a battering. 
On top of that we have a situation where foresters are the losers. In this updated scheme we have a likelihood of forestry going downhill. There will be job losses. In the electorate of Mr McClay who chaired the Finance and Expenditure Committee we will have job losses in the forestry sector directly. Forestry is the real loser in the way in which this scheme suppresses the carbon price indefinitely. The amendments that were put up in the name of Moana Mackey included one very good amendment that would have seen some guarantee at least of some of the units having some value which would have advantaged the foresters but we saw there that that was defeated by the Government because it does not want a price signal in the market. Effectively it is saying it does not want a market solution. 
This Government seems determined to put all of the costs back on to the taxpayers and I think that is very disappointing—very disappointing. I personally believe that markets are often a very good solution. If they are properly regulated they make excellent servants; they just make terrible masters. When we let the markets rule when they are clearly errant—when they are not working—we allow them to make us their servants. This is disappointing because we as taxpayers are carrying the can for this bad legislation. That is why the Labour Party opposes this legislation forcefully and regards the passage of this legislation as a great disappointment to New Zealanders and an embarrassment really for this Parliament.