Clark David: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — In Committee Speaker Recalled In Committee 
Text is incorporated into the Bound Volume 
Clark David: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — In Committee Speaker Recalled In Committee 
[Sitting date: 06 November 2012. Volume:685;Page:6294. Text is incorporated into the Bound Volume.] 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I want to build on some of those comments made by Dr Kennedy Graham. There was much in Dr Nick Smith’s speech prior to it that was poppycock. I think there was not enough time for Dr Graham to constructively add to the debate and to address all of the nonsense raised by Dr Smith. 
Dr Smith in his contribution said that the desire was to address greenhouse gas emissions through an expansion of the scheme. This is a lofty way of phrasing things but it does not sit well with the facts because we know and the Government estimates that this legislation the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill will cost $328 million. It is legislation that is increasing the taxpayer cost because those costs are not being met by polluters. So the facts do not quite line up with the rhetoric. That is not unusual from this Government but it is unfortunate because here we have a serious issue that needs addressing and a Government that is scurrying from it as fast as it can. 
Dr Smith raised the issue of emissions increasing in a dramatic way between 2000 and 2008. Emissions certainly did increase and I guess that is something this Government has not had to grapple with because at this stage the increases are largely coincident with economic growth and we know that this National Government has the worst economic record of any Government in the last 50 years. 
Todd McClay 
: Rubbish! 
Dr DAVID CLARK 
: It has the worst economic record of any Government in the last 50 years Mr McClay so it has not had to deal with this issue of economic growth and to what extent one can decouple growth from emissions. 
Certainly the last Labour Government consented a significant amount of renewable energy some of which is now coming on stream. It was the Labour Government that introduced the emissions trading scheme with the support of the Green Party into this Parliament and it has seen at least some response to climate change—a response that was not particularly forthcoming before it was tackled by the Labour Government. That scheme I have to say was a fairly modest one and I think all members who supported it would acknowledge that it was ambitious in including all sectors and all gases but that it started in a modest way. Its aim was not to put businesses out of business; its aim was to shape the way in which future investment decisions were made so that businesses would make their decisions based upon an understanding that there would be a carbon price in future. 
That decision that framework is in fact the subject of one of the Supplementary Order Papers Supplementary Order Paper 142 that I wish to discuss as I get into my address to this Committee—one in the name of Moana Mackey. It talks about the possibility of having New Zealand - based units to ensure that there is actually a reasonable price of carbon so that future investment decisions are made in a way that is in New Zealand’s long-term interests not in the interests of the next couple of years—the economic returns in the short term—so much as in the longer term. 
We know that New Zealand’s products capture a higher premium price in the market because we have an environmentally friendly reputation. That reputation is under threat—that reputation is currently under threat. As New Zealand waters down this legislation we will no longer be able to attain the same premium prices in the market. When the scheme was introduced we in the Labour Party calculated that it would put an additional couple of cents of cost on a block of butter—a couple of cents. But those couple of cents would go towards offsetting the emissions and it would also help to ensure that those products were seen to be on the right side of the equation. 
Shane Ardern 
: It would go to a northern hemisphere farmer. Production would go elsewhere. 
Dr DAVID CLARK 
: Mr Ardern would like to see us wind back the legislation further but it cannot be done. The legislation that is being put through will ensure that the subsidy to farmers goes out indefinitely. The farming industry which proudly claimed itself to be subsidy-free in the 1980s now is faced with the prospect of being heavily subsidised indefinitely. The National Government is ensuring that polluters are subsidised and ensuring that those farmers who are taking measures to reduce greenhouse gas emissions through good farming practices are not encouraged. 
Shane Ardern 
: How are they doing that? What are they doing? Give me a hint of what they’re doing. 
Dr DAVID CLARK 
: Mr Ardern does not want to see those good farmers encouraged. He wants to encourage the worst farmers to continue doing what they are doing and those farmers who are making changes in their farming practices who are putting modern farming practices in place not to be encouraged. We know that the use of nitrogen on farms can be changed according to best practice to reduce emissions. 
Shane Ardern 
: Yes doing that. Yes a tick for that. 
Dr DAVID CLARK 
: Oh it is all done says Mr Ardern. He is well ahead of most of New Zealand on this issue. I will concentrate back on my speech rather than take too much more wisdom from that member on this matter. 
There is of course this prospect of losing our premium in the market—I will come back to the point—which at all costs must be avoided because New Zealand needs a smart safe business-friendly future not a future that is tied to the worst parts of our economy in terms of those who are the greatest offenders in terms of emissions but to one that rewards good farming practices and advances and clean green climate-friendly businesses. 
The studies that Dr Smith referred to in his address I have to point out that talked about lower emissions with New Zealand stock were commissioned under the Labour Government so there is a rich irony in him claiming that point. 
There is also a point that needs to be addressed when he asks which countries are doing more than New Zealand. Well most countries. New Zealand’s per capita emissions are embarrassingly high. If New Zealand with its renewable resources—with its rich renewable resources—cannot address climate change it is ridiculous to expect other nations to attempt to do so. New Zealand can at lowest cost address this issue and so it is incumbent upon us to take a lead. The costs are not great. New Zealand needs to get on with it show what can be done and take a lead in the climate change space. 
This Government instead is moving us backwards rapidly. It is costing $328 million with this legislation. It is looking to avoid—the latest reports say—future obligations in the way that very few countries did the first time round and really putting New Zealand in a space where we will be less proud to call New Zealand home. Where we need to come back to is the kind of sensible Supplementary Order Paper that stands in the name of Moana Mackey—one that encourages New Zealand units to be traded. New Zealand is the only country that currently does not place quantitative restrictions on international units. We need to step back into best practice and away from worst practice which this Government seems to be attracted to. Let us do what the Australians are doing. The Australians are looking to do this. Many other schemes do not even allow any international units at all. What we have here is a scheme that takes us backwards rapidly that undermines the framework and that in fact gives greater confidence to polluters. 
This is not good enough—this is simply not good enough. We as a country need to be leading the charge and leading the technological development for addressing greenhouse gas emissions because that is the way to future prosperity. Developing new technologies and the intellectual property that goes with them is what will lead the market and set the prices in future—that is both in the agricultural sector and across the energy sector more broadly. New Zealand needs those kinds of things. 
This Government has the worst economic growth record in 50 years. There are other ways to sort that out other than rolling back what is already a very modest emissions trading scheme. We need tools to address the exchange rate and to give the Reserve Bank those tools. We need better savings policies so that New Zealanders have money to invest in businesses. We need pro-growth tax reform that encourages money to go away from the speculative sector and towards the productive sector in our country. Those are the ways to support businesses in New Zealand. Watering down our climate change legislation is not the way to achieve economic growth in this country.