Fitzsimons Jeanette: Climate Change (Emissions Trading and Renewable Preference) Bill — In Committee 
Fitzsimons Jeanette: Climate Change (Emissions Trading and Renewable Preference) Bill — In Committee 
[Volume:649;Page:18130] 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 Anybody listening to David Carter would never guess for a moment that the agricultural sector which produces 50 percent of New Zealand’s emissions was being 100 percent protected for a whole 5 years with its emissions being paid for entirely by the New Zealand taxpayer. The second thing that anyone listening to David Carter would never guess is that when the agricultural sector comes into the scheme in 2013 it is to be awarded free credits equal to 90 percent of its emissions in 2005. Furthermore that free allocation does not even begin to reduce until 2019. That shows extremely generous treatment towards the agricultural sector. The only thing the National Party could do in its proposed emissions trading scheme to treat the agricultural sector more generously would be to take it out of the scheme altogether and we suspect that that is what it will want to do. 
I will respond to what the Hon Nick Smith said in his speech about the difficulty of figuring out what these huge amendments given at short notice actually mean. I am keen to help him with that problem by going through Supplementary Order Paper 239. This Supplementary Order Paper records the effects of the policy agreement that the Greens have reached with the Government and it enables us to support this bill. 
The first provision on Supplementary Order Paper 239 that I draw members’ attention to is new section 18CB which responds to submissions by many many submitters that we should not include Russian hot air in the New Zealand registry—in other words units issued to Russia under the Kyoto Protocol—because Russia’s economy collapsed after 1990 and therefore this does not represent any real effort to reduce emissions. We were very glad to find out during negotiations that bilaterals are going on with Eastern European countries whereby those countries are agreeing that they will be greened when they put their units on the market. In other words the money spent on them will be invested in carbon reduction programmes. So new section 18CB says that regulations will be drawn up to the effect that Russian hot air and Eastern European assigned amount units—in fact assigned amount units generally—will not be accepted into the New Zealand register until they meet those conditions of greening. We are very glad to have achieved that. We think that improves the environmental integrity of the scheme. 
The second provision I draw members’ attention to is new section 69A “Establishment of Innovation Fund”. I have been on record about this fund a number of times and people who were on the Finance and Expenditure Committee with me will have become sick of me harping on about it. As introduced the bill locked New Zealand into old technologies and made it impossible for the new exciting and innovative carbon-reducing technologies to be established in New Zealand. Those technologies would get no credits and they would be competing with companies that were 90 percent grandparented even though they were much less efficient. So the Government has agreed to my suggestion of establishing a contestable innovation fund equal to 1 percent of the total credits issued for free within that cap not on top of it—150000 credits a year to be precise. People can bid for those credits if they want to set up a new enterprise in New Zealand or expand an existing enterprise in a way that significantly reduces carbon emissions for a particular industry. I hope that means New Zealand will be able to position itself in the rest of the world as a friendly place for new innovative technologies and I hope that will lead us in the direction of an economic transformation towards a low-carbon economy which is what we need to have. 
I point to new section 74— 
Hon Dr Nick Smith 
: What about 69B— 
JEANETTE FITZSIMONS 
: I say to Nick Smith that that is all part of the same thing. 
Hon Dr Nick Smith 
: That’s the fishing section. 
JEANETTE FITZSIMONS 
: I understand that the fishing section was the agreement between New Zealand First and the Government. That was not our proposal so I will leave that to New Zealand First to discuss. New section 74 simply makes the point that an industry is not necessarily either wholly or not at all trade exposed. An industry may be trade exposed for some of the products it sells and not for others. In that situation it is not exactly fair that the industry should get 90 percent of all of its emissions for free. Instead there ought to be a graduated scale and new section 74 makes it clear that that must be considered at the time of the development of the allocation plans. 
New section 180 “Establishment of Household Fund” is as the Minister described in the House last week the largest energy efficiency programme New Zealand has ever seen and the Greens are very proud of that. We know that the household sector uses about one-third of New Zealand’s electricity we know that much of it is used very wastefully and we know that householders do not always have the information as to how they could reduce their bills. Most of all we know that when new technology is needed householders do not have the capital to make it possible for them to reduce their bills so they are trapped in this cycle of low incomes high energy use cold and damp houses and poor health. 
This fund makes it possible to build on the small programmes that the Energy Efficiency and Conservation Authority has been running for some time to insulate retrofit and upgrade homes to provide clean heating devices and to extend those programmes up through middle-income people with various rates of subsidy. The fund will be overseen by the authority which will develop the criteria for ministerial approval. My hope is that particular urgency will be given to homes where people have health problems that are exacerbated by cold and by dampness that there will be a higher level of subsidy for low-income homes than for high-incomes homes and that there will be something for everyone. 
New section 181 “Gazetting of targets” inserts in the legislation a requirement for targets. Another member noted earlier that this is not a “cap and trade” scheme because there is no cap—unlike in Australia which plans to have a cap. That is a matter that has concerned the Greens from the beginning. It simply means that we plan to continue growing our emissions indefinitely but to buy offsets from the rest of the world. Although we were not able to get a cap we were able to get targets for the reduction of emissions within New Zealand into the bill. The bill requires the Minister to develop targets and to gazette them and they are reviewed at the 5-yearly reviews under new section 147. Those targets will initially be the ones that have already been announced in the Energy Efficiency and Conservation Strategy and we hope they will be strengthened over time.