Chauvel Charles: Third Readings — 
Text is incorporated into the Bound Volume 
Chauvel Charles: Third Readings — 
[Sitting date: 17 November 2009. Volume:659;Page:7711. Text is incorporated into the Bound Volume.] 
CHARLES CHAUVEL (Labour) 
: 
 I take a brief call on these bills which will see the implementation of what was the Settlement Systems Futures and Emissions Units Bill in the manifestation of this legislation in its previous stage in the House. I took a call in the second reading of the legislation and Melissa Lee pointed out then that I had not had the opportunity to sit on the Commerce Committee that heard submissions on the legislation. So I am delighted to be able to advise Ms Lee on this occasion that I will be rejoining the Commerce Committee this week. I can see that Jo Goodhew is equally delighted at that prospect. 
Jo Goodhew 
: No she is not there any more. 
CHARLES CHAUVEL 
: Oh well we will be ships that pass in the night again. The reason for my absence from the committee and the reason for missing out on the treat of hearing the submissions on this legislation—which going by the previous speaker’s contribution were really fascinating—is that I had to sit on first the Emissions Trading Scheme Review Committee which was probably an equal delight and second the Finance and Expenditure Committee with its deliberations on the most recent amendments. So I did not get a chance to hear submissions on this legislation but I do want to say that I think that this is the sort of legislation that should be promoted. I say that from the point of view of someone who supports emissions trading who wants to see a robust carbon market in New Zealand who wants to see us meet good international standards in this area and who sees real possibilities for wealth generation for New Zealanders if we can ride the wave of managing to make the transition to a low carbon economy in a good time rather than simply be dragged to the negotiating table in this area as reluctant participants—which unfortunately is the image of New Zealand that is emerging internationally. 
I want to say a few words—first to congratulate my friend and colleague Lianne Dalziel who was the Minister who originated this legislation and introduced the original bill in September 2008. Later that month it was read a first time and referred to the Commerce Committee which appears to have done a diligent job. It reported the legislation back in mid-June. It is a bit of a shame that it has taken until now mid-November to get around to passing the bills that give effect to the original legislation which signals that trade in securities and other products can be cleared and settled in New Zealand through systems that meet the expectations of international and domestic participants. 
It was interesting to have been involved in a parallel process—the emissions trading scheme deliberations—in two select committees over the time that this legislation was being considered first by the Commerce Committee and now in the House. Perhaps it is instructive for the House to consider this idea of the emerging carbon market which will be facilitated by the legislation that we are passing now. I just happened to pick up today’s copy of the  
New Zealand Energy and Environment Business Week 
. It is a very reputable publication but it mentions in a number of places just how many influences there can be on the price of carbon. 
First of all it records the difficulties we encountered in the select committee when Treasury advised us on the last day of our meeting that the emissions trading scheme amendments being sponsored by Dr Smith were more likely to add between 13 and 17 percent of GDP by 2050—that is around $110 billion in additional debt—compared with the original estimate of 6 or 7 percent of GDP. Interestingly the reason for that mistake was a mistake around the calculation of the price of carbon. Instead of assuming a price of $25 a tonne to 2012 and that by then there would be the rudiments of an international agreement on how to deal with greenhouse gases so it would be a reasonable expectation that the price might have got up to $50 Treasury forgot to factor in that upward variable and that is where the massive mistake came from on the last day of the meeting. 
The price of carbon is influential across our economy. If one looks through the rest of the  
New Zealand Energy and Environment Business Week 
 one reads the news that Australia has decided to exclude agriculture from its emissions trading scheme. If one compares the two economies one can see why the Australians would do that. Fifty percent of our greenhouse gas emissions come from that sector. Only 15 percent of the Australians’ emissions come from agriculture. One can see the perils of harmonising the two schemes. One can see the distorting effect that harmonisation could have on our domestic price of carbon if we simply slavishly follow the harmonisation bandwagon as the Minster intends to do. 
There is news about the Lake Hayes decision in the South Island where Meridian Energy which wants to build a big wind farm was declined permission. That will obviously have a major effect on our forward price of carbon and on our price of electricity. Then there is a warning about the lake levels. Some people are very concerned about the South Island lake levels. There is some recent maintenance work stopping generation on the Waitaki scheme and people are having a think about what that will do to the power price on the spot market. Obviously when we have an active carbon market going when carbon is properly traded domestically—as this legislation that we are considering today will facilitate—we will see these sorts of fluctuations right across the board. 
I conclude by repeating the tribute that I have paid to Lianne Dalziel. It was far-sighted to introduce this legislation late last year. It was a good thing to have it referred to the Commerce Committee. It was good that the committee promptly progressed the legislation. But it is a shame that it has taken until now for the House to pass the empowering legislation. Unfortunately it does reflect the fact that we have a Government that is not sufficiently serious about the problem of global warming and climate change and consequently the developing of economic instruments including the ability to trade carbon which this legislation facilitates and which Labour supports. Thank you.