Hutchison Paul: Climate Change Response (Moderated Emissions Trading) Amendment Bill — First Reading 
Hutchison Paul: Climate Change Response (Moderated Emissions Trading) Amendment Bill — First Reading 
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Dr PAUL HUTCHISON (National—Hunua) 
: 
 Thank you for the opportunity to speak on the incredibly important Climate Change Response (Modified Emissions Trading) Amendment Bill. It is very much about ensuring that New Zealand’s response to greenhouse gas emissions better balances our environmental responsibilities with our economic opportunities and realities. This scheme balances it far better than Labour’s proposed scheme. The introduction of this bill comes prior to a vital world climate change meeting in Copenhagen and after a huge amount of work was done by the National Government its officials and a special select committee. The Emissions Trading Scheme Review Committee reviewed the previous Labour Government’s emissions trading scheme and related matters. The review was initiated by the coalition agreement between National and ACT. I acknowledge the huge amount of work put into this bill by the Hon Dr Nick Smith and his officials. I also acknowledge the amount of work put in by the chairman of the select committee the Hon Peter Dunne.  
I believe that the committee worked incredibly diligently particularly on the National side and the Maori Party side but I do acknowledge the special detailed knowledge of individuals like David Parker and Jeanette Fitzsimons. Although I do not agree with their views—I do not believe they have a realistic hold of the realities of the impact of their schemes on the New Zealand economy—I certainly admire greatly their detailed knowledge and their continual probing of the officials during the select committee process.  
In the committee report to Parliament there was a consensus apart from the ACT Party about the United Nations central and benchmark projections. The committee recommended two things: firstly that the Intergovernmental Panel on Climate Change’s projections and findings of the fourth assessment report underpin New Zealand’s future international policy negotiations and that is happening right as we speak. It was noted that there remain however uncertainties in the science but that these uncertainties should not be a reason to delay action by the international community.  
Secondly the committee recommended that New Zealand take action now to reduce its emissions and send a credible signal about future policy in order to protect our international reputation particularly in the area of trade and tourism. The committee accepted that human-induced climate change poses a global threat and that there is a need for a global mitigation effort. This amendment bill certainly fulfils those recommendations.  
It is a great pity that Labour was not prepared to reach a realistic consensus on this modified emissions trading scheme bill. I understand that National offered a compromise position but Labour refused it. There was certainly quite a different view from Charles Chauvel than from other people I have spoken to. But I have sensed right throughout the committee process that Labour was going to be very difficult to shift from its position on its Climate Change Response Act last year. I accept that there were two major issues and they were about allocation and the entry of agriculture into the scheme. But it seems to me that Labour has little appreciation of the severe effects that its heavy-handed approach could have on our economy and therefore on our ability to afford dealing with climate change. The agriculture sector will welcome the extension of its involvement from 2013 to 2015 and this change will also help align New Zealand with the Australian scheme.  
However what neither Labour nor the Greens seems to appreciate is that agriculture is the backbone of New Zealand’s economy. They do not appreciate that it supplies us and the world with much-needed protein in a very cost-efficient way that sectors like the dairy industry have a combined debt right now of $20 billion to $30 billion and that the Labour scheme would mean that many hundreds if not thousands of New Zealand farmers would be put out of business. Although Labour and the Greens wanted to lead the world in punishing our farmers the National Government wants New Zealand to lead the world in agricultural emissions research. In the last 48 hours it has been announced that both India and the USA are keen to join New Zealand’s centre of research excellence and to contribute financially to it. They realise that New Zealand has a real contribution to make in the reduction of agricultural emissions research. I am personally extremely pleased with these developments as I crafted much of National’s science manifesto last year which focused on the idea of New Zealand leading the world in agriculture emissions research.  
Lastly the bill’s introduction of an allocation intensity model without a cap will achieve a much more pragmatic balance for industries such as steel aluminium and cement. New Zealand Steel in the electorate of Hunua which I proudly represent employs 12000 people locally at an average wage of $90000 and 5000 to 6000 people around the country. It has been audited to have the world’s best practice efficiency and it co-generates something like 60 percent of its own energy. Under Labour’s scheme it may well have gone out of business meaning that New Zealand would become dependent on importing steel and that steel would probably be made in less efficient mills around the world thus leaking more greenhouse gases into the atmosphere and making world greenhouse pollution even worse. That is the very principle that Labour has failed to understand either in its negotiations or its previous scheme.  
Under this amending bill our vital energy-intensive trade-exposed industries are incentivised to become more efficient thus contributing to a lower carbon world economy. This amendment bill positions New Zealand very credibly in the international scene to combat climate change. It clearly balances our environmental responsibilities with the economic realities and opportunities facing New Zealand right now.