Smith Nick: Climate Change Response (Emissions Trading Forestry Sector) Amendment Bill — First Reading 
Smith Nick: Climate Change Response (Emissions Trading Forestry Sector) Amendment Bill — First Reading 
[Volume:655;Page:4548] 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 I move  
That the Climate Change Response (Emissions Trading Forestry Sector) Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Emissions Trading Scheme Review Committee with an instruction that the committee report finally to the House on or before 26 June 2009 and that the committee have the authority to meet at any time while the House is sitting except during oral questions and during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c). 
I will speak on the detail of the bill and why it is necessary and then I will give a broader perspective around the very important issue of climate change and the Government’s approach to it. But first I thank other parties for their consideration of the bill and I thank the Business Committee for its agreement to allow it to progress quickly. 
The bill has three parts around the reporting and the process issues for the forest sector under the Climate Change Response Act 2002. The first issue that the bill addresses is the requirement in the existing law that any deforestation during calendar year 2008 be reported and declared by 31 January 2009. This bill does not change the legal requirements that go with deforestation under the emissions trading scheme; it changes only the required reporting times by extending that date to 31 January 2010. The dates remain the same for reporting deforestation that occurs in this calendar year. We also made changes to the requirements to surrender units associated with that 2008 deforestation. This date has been put forward by 1 year from the end of April 2010 to the end of April 2011. 
The second change in this amendment bill is in respect of the application for exemptions for small forest lots of less than 50 hectares. The current Act requires that applications for exemptions be made to the Ministry of Agriculture and Forestry by 30 June 2009. The bill amends that with a provision that allows an Order in Council to set the date in future relative to the progress in the report of the Emissions Trading Scheme Review Committee. 
The third element of this bill is in respect of the publication of the forest allocation plan for pre-1990 forest owners. This allocation plan is a compensatory mechanism for forest owners who will be subject to deforestation liabilities under the emissions trading scheme. This has been quite a contentious area and it was subject to many submissions at the review select committee. The bill defers the requirement for this forestry allocation plan from 30 June this year—again the date will be set by an Order in Council—to a date that is appropriate after the select committee review has been completed and subsequent amendments to the emissions trading scheme have been brought back to the House. 
Part 2 contains some corrections to minor technical drafting errors that arose when the original legislation went through this Parliament under quite pressing time frames. The reason for changing time lines is quite straightforward to justify. The current review committee inquiry and the examination of the emissions trading scheme have absorbed a huge amount of energy and effort by many of those affected by the emissions trading scheme. There has been a particular focus on the forestry provisions of the scheme and it is noteworthy that New Zealand is the first country in the world that is attempting to include forestry in such an emissions trading scheme. If the Government pressed participants to meet the compliance requirements of the existing law at the very time those instruments are being reviewed by the review committee it would be unfair and it would send mixed signals. 
I have found that even Government agencies were not completely on time in reporting deforestation by 31 January this year. I am sure that many other forest owners—thousands I suspect—will also be in non-compliance. The particular issue around the forestry allocation plan is that it would be nonsensical for the Government to continue to develop and consult on the detail of an allocation plan when such key issues as offset and other provisions around forestry participation in the emissions trading scheme are being openly debated. It would create confusion and that is why the Government has not gone down that path. 
It is highly unlikely that the thousands—if not tens of thousands—of small lot forest landowners are aware of their obligation to apply for an exemption by the end of this month. It would be unfair on foresters for this oversight to result in them being adversely affected and that is why this bill sensibly provides for that date to be pushed out. 
In bringing this bill to Parliament I have consulted other parties. The Labour spokesperson on climate change Charles Chauvel has raised with me a preference that the two dates regarding forestry exemptions and the forestry allocation plan be firmly fixed at the end of June 2010 rather than be subject to an Order in Council. I understand and accept that that is quite a legitimate point and the Government has agreed to support an amendment by Mr Chauvel to this effect. In exchange for the Government’s support of that amendment the Opposition will support the timely passage of the bill. 
Similar concerns were raised by the Green Party. It also indicated a preference for fixed reporting and allocation plan dates. It is a pretty even toss as to whether a fixed date or a more flexible Order in Council mechanism is required albeit I openly acknowledge that it puts more pressure on the Government to get on and resolve the details of a modified emissions trading scheme and that is why the Government is happy to accept those. My expectation is that this change will be considered at the time this bill is referred to the special select committee. 
The Maori Party has fairly raised with the Government the very substantive issue in respect of the interaction of forestry and the emissions trading scheme with the central North Island Treaty settlement and with other Treaty settlement negotiations. The concern is that any changes in climate change policy in respect of forestry could adversely impact on the central North Island settlement. 
On behalf of the Government I would like to make it plain that we are determined to see that settlement and other settlements progressed and implemented. We will ensure that such settlements are not disadvantaged by any substantive changes to the emissions trading scheme. In many respects the concerns that have been raised with me by the Maori Party reflect the growing economic muscle of Maori and their strong interest in the success of the New Zealand agricultural forestry and fishing industries. This in many ways connects with concerns that National has and it requires a very careful balancing of New Zealand’s economic and environmental interests. 
I also acknowledge that there are other Treaty settlements—not just that of the central North Island—where this issue needs to be managed carefully and I am working closely with my colleague the Minister for Treaty of Waitangi Negotiations Chris Finlayson to work those through. 
I emphasise that this is a relatively minor technical bill. It simply deals with the reporting requirements and the allocation plan in the forestry sector which is particularly important for New Zealand in respect of climate change. I thank other parties for their cooperative attitude on this issue. It bodes well for our being able to build a broader consensus around the bigger challenge of climate change policy and the emissions trading scheme. I acknowledge that the process for the advancement of the bill is a short process. The special select committee needs to ensure that the bill covers only those matters that I have raised and that is why the shortened process is appropriate. 
In terms of the broader issue of climate change this Parliament will need to deal with a more substantive emissions trading scheme amendment bill at the appropriate time when the select committee has completed its review. My expectation in terms of the time line is that the select committee will be able to report back to Parliament in August and there will then be a substantive responsibility on the Government and on Parliament to progress a more substantive bill. I commend the bill to the House.