Boscawen John: Climate Change Response (Moderated Emissions Trading) Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Boscawen John: Climate Change Response (Moderated Emissions Trading) Amendment Bill — In Committee 
[Sitting date: 24 November 2009. Volume:659;Page:7988. Text is incorporated into the Bound Volume.] 
JOHN BOSCAWEN (ACT) 
: 
 First of all I owe you an apology from last night Mr Chairperson because I misunderstood the advice I had received from Mary Harris about the consecutive speech motion. When I checked that this morning your ruling was absolutely right on point. 
I want to respond to the comments of Dr Smith who said the ACT Party is opposed to an emissions trading scheme. Yes it is. But the ACT Party has also made it very clear that if we are to have any sort of tax on carbon it should be a carbon tax. So there is the option of negotiating a carbon tax with the ACT Party. But Dr Nick Smith also said if he did not do this deal with the Maori Party there was no guarantee that he could have done a deal with ACT next year. I ask Dr Smith why he could not have done a deal with the Maori Party then. If the Maori Party had more time to consider the implications of this bill it might well have done a much better deal for itself and for all New Zealanders. 
I want to talk a little about the electricity industry. I do this for the benefit of Sue Kedgley. Let me see whether I can explain how the electricity industry works in the simplest possible terms. Electricity is generated either from renewable sources like geothermal or water or from thermal sources like gas and coal. Essentially the emissions trading scheme puts a price on the carbon discharges from thermal power stations. So for example if Contact Energy was to generate electricity from gas it would have to pay a tax on its emissions from its thermal power plants. That has the effect of costing Contact Energy—and another example is Genesis Energy in respect of the Huntly power station—more to generate that electricity. It has been estimated that at $25 a tonne for carbon it will add about 10 percent to the cost of electricity. But it goes further than that because that 10 percent increase in the price of electricity is charged across the whole market. Everyone pays more for electricity. 
In respect of the power stations that operate from renewable sources from hydro and from geothermal generation they do not pay that carbon tax and that increase in the price of electricity is a windfall gain. In other words Contact Energy TrustPower Mighty River Power and Meridian Energy which all own hydro stations will be able to charge more for their electricity and it will not cost them any more to produce it. That will result in windfall profits. If Sue Kedgley takes objection to the ACT Party being the only party that is prepared to stand up and speak out about a 10 percent increase in the price of electricity from 2013 I wonder whether she actually understands what she is talking about. Essentially she is condoning a massive increase in profits and a massive windfall gain not just to State generators but to privately owned power operators. I ask Hekia Parata again how she can support a bill that will increase the price of electricity and have massive windfall gains going to those companies. 
Let us come back to fishing. Officials have calculated that the diesel that the fishing industry uses to drive its trawlers and its operations will generate some 600000 tonnes of carbon. It has to pay for those emissions. It will get a 90 percent allowance for those emissions. But from 2013 it will need to pay for the full cost of those 600000 tonnes of carbon. At $25 a tonne that is $15 million a year. That is despite the fact that New Zealand gets an allocation of free units under the Kyoto Protocol because our fishing industry was generating carbon emissions in 1990. 
The CHAIRPERSON (Eric Roy) 
: I thank the member for his acknowledgment. It was not necessary but I thank him for it.