Kaye Nikki: Questions for Oral Answer — Questions to Ministers 
Kaye Nikki: Questions for Oral Answer — Questions to Ministers 
[Volume:662;Page:10319] 
7. 
NIKKI KAYE (National—Auckland Central) 
 to the  
Minister for Climate Change Issues 
: What reports has he received on New Zealand’s latest net position report under the Kyoto Protocol? 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 The report shows that New Zealand is set to exceed its Kyoto target by 11.4 million tonnes which is worth $233 million. That is a small improvement on the previous year’s estimate. The report shows that although New Zealand’s gross emissions will be 23 percent greater than in 1990 over the Kyoto period 2008 to 2012 that is offset by the growth increment of forests planted since 1989. However the credits for those forests belong to forest owners. Foresters are expected to receive credits worth $1.8 billion; consumers and businesses through the emissions trading scheme are expected to pay approximately $1 billion; and taxpayers are expected to face a bill of about $570 million over the period to 2012. The $231 million surplus is the overall balance for “New Zealand Incorporated”. 
Nikki Kaye 
: Has the Minister received any advice on the impacts of the Government’s emissions trading scheme on New Zealand’s net Kyoto position? 
Hon Dr NICK SMITH 
: Yes the advice I have received is that New Zealand would be in deficit were it not for the emissions trading scheme. The emissions trading scheme is projected to reduce net emissions by 22 million tonnes as a consequence of the financial incentives it introduces to both reduce emissions and plant trees. In short without the emissions trading scheme New Zealand would not meet its Kyoto commitment to stabilise net emissions at 1990 levels. 
Nikki Kaye 
: Can the Minister clarify that there is a difference between New Zealand’s net position and the Government’s net position? 
Hon Dr NICK SMITH 
: Yes that is a very important distinction. New Zealand is expected to exceed its Kyoto target by 11 million tonnes but the allocation of carbon units to foresters as promised by New Zealand when we signed Kyoto in Japan in 1997 means that New Zealand’s net position is actually a deficit of about 30 million tonnes. The claim that New Zealand does not need an emissions trading scheme because we are set to exceed our Kyoto targets ignores the reduced emissions that the scheme will deliver and the fact that the Government still carries a substantive liability from emissions growth. 
Charles Chauvel 
: What advice has the Government received about the additional annual cost to the taxpayer of continuing to underwrite carbon-price risks by maintaining a 50 percent obligation under the emissions trading scheme after 2013 as the Minister indicated on 8 April he was considering? 
Hon Dr NICK SMITH 
: The Government is carefully balancing its Kyoto obligations with a real concern about the cost for consumers and for business. That is why we modified the scheme which will halve the cost for consumers from 1 July this year. This Government has also indicated that if there is not significant progress internationally in countries like Australia and the United States then it would be our intention— 
Charles Chauvel 
: I raise a point of order Mr Speaker. The question was a direct and quite precise one that asked what advice the Government had received about the additional annual cost to the taxpayer of continuing a particular policy. The answer has not yet even begun to address the question. 
Mr SPEAKER 
: If I recollect when the member carried on with his question he said the policy related to something the Minister said on a certain date. 
Charles Chauvel 
: Yes I was simply verifying that he had actually floated that proposal so I was asking about the costing of it. 
Mr SPEAKER 
: The member is saying that he floated the proposal and now he is asking about the cost of a policy. 
Charles Chauvel 
: That was the primary part of the question Mr Speaker. 
Mr SPEAKER 
: What I am getting is that the member is now expecting me to intervene when his question identified that the Minister floated a proposal but he is now asking about costing a policy. 
Charles Chauvel 
: I am asking whether it was costed when he floated it. I think it is a legitimate question. I can repeat the question if it was not heard as clearly as it might have been. I do not think there is any sting in the tail here; it is a pretty straightforward question. 
Mr SPEAKER 
: The Minister having heard that I invite him to carry on with his answer. 
Hon Dr NICK SMITH 
: Certainly. This Government made a decision to halve the costs to consumers and businesses from 1 July this year. I have raised the prospect that in the event that there is not progress in Australia or the United States we would reconsider lifting the cost for consumers and businesses on 1 January 2013. 
Charles Chauvel 
: At what cost? 
Hon Dr NICK SMITH 
: The member asks what the cost of that would be. That is impossible to tell for a very simple reason: there is no international agreement beyond 2013 so to determine the cost for New Zealand when at the moment there is no agreement beyond the Kyoto period to 2012 makes such a calculation impossible.