Fitzsimons Jeanette: Questions for Oral Answer — Questions to Ministers Questions to Members 
Fitzsimons Jeanette: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:647;Page:15921] 
3.  
JEANETTE FITZSIMONS (Co-Leader—Green) 
 to the  
Minister responsible for Climate Change Issues 
: Why has the Government delayed the inclusion of the transport sector into its proposed emissions trading scheme? 
Hon PETE HODGSON (Minister for Economic Development)  
on behalf of the  
Minister responsible for Climate Change Issues 
: In short because the rapid and significant rise in the price of world oil is doing the job for us. 
Jeanette Fitzsimons 
: If inclusion in the emissions trading scheme is dictated by consumer affordability—in this case the price of oil—why on earth has the Government further delayed rather than brought forward the obligation of the agriculture and energy sectors when the dairy payout is up 60 percent on last year’s and export coal prices have recently tripled leading to rapidly increasing emissions from cows and coal? 
Hon PETE HODGSON 
: As the Minister responsible for Climate Change Issues has said on many occasions the emissions trading legislation is a matter of striking a balance between many competing interests. The Government thinks that the balance that has been expressed in recent days is at about the right point and I look forward to the support I hope of all the members of this House for the passage of the legislation on its return from the select committee. 
Charles Chauvel 
: Does the changed entry date for certain sectors alter the fundamentals of the emissions trading scheme? 
Hon PETE HODGSON 
: No it does not. The fundamentals remain intact. Let us remind ourselves of what they are. The fundamentals are all gases and all sectors and—in some respects a more important fundamental—participants will face the full price of their emissions at the margin. In other words the marginal signal comes into effect from the outset. 
Hon Dr Nick Smith 
: How will the emissions trading system now work when officials advise that the originally designed scheme carefully balanced the market of 100 million tonnes of buyers and 100 million tonnes of sellers of credits from forestry but now with the deferral of the transport fuels there is 40 million fewer tonnes of buyers leaving foresters with no one to buy their credits and does not this illustrate that the decision to defer the transport fuels was a knee-jerk reaction made outside of a proper policy process? 
Hon PETE HODGSON 
: No there has been no knee-jerk reaction. But the answer to the essence of the member’s question is that the emissions trading scheme is not a domestic scheme but an international one and the world is a big place. 
Jeanette Fitzsimons 
: Why does the Minister think it will be easier to bring in transport fuels in 2011—which is another election year—when oil prices will be much higher than they are now; or does he think that because emissions are not rising it is OK to stabilise transport emissions at their current level of 60 percent above our 1990 target? 
Hon PETE HODGSON 
: I thank the member for acknowledging that transport emissions have at last stabilised. I think the member and I in earlier years were wondering whether that would ever happen; well it has. But I think the member raises a good point and I suspect that the best way to answer it is to remind the member that behaviour is driven by not just the level of oil prices but also the pace of change and the pace of change has been dramatic. The price of oil 3 or 4 years ago was about one-quarter of what it is now. It has been a really dramatic change. 
Peter Brown 
: Noting the Minister’s plea for support for the bill when it comes back to the House is he aware of the concerns of the New Zealand Shipping Federation that failing to exempt local shipping companies from the emissions trading scheme will hand international ship operators a substantial cost advantage at a time when there is a clear environmental and transport need to grow our domestic shipping industry; if he is aware of that can he advise how the issue will be rectified? 
Hon PETE HODGSON 
: I am afraid I am not able to give the member a thorough answer to his question at this point in my role as an acting Minister. But I will say that the member raises one of many different points of view about who should be excluded included exempted given a special deal or not given a special deal and that is the debate before us. The question is whether this House believes we have struck the right balance and will support the legislation on its return from the select committee. It is now 11 years since the Kyoto Protocol was signed. It is now 6 years since the Kyoto Protocol was ratified. It is time—sooner or later—to move. 
Jeanette Fitzsimons 
: Does the Minister agree with the statement of the Nobel Peace Prize - winning scientist and chair of the UN Intergovernmental Panel on Climate Change Rajendra Pachauri—who incidentally will be the feature guest of the Government next month when the world spotlight will be on New Zealand hosting World Environment Day—that “If there’s no action before 2012 that’s too late. What we do in the next two to three years will determine our future. This is the defining moment.”; and what are the implications of that statement for the half of our emissions that are totally exempt until 2013? 
Hon PETE HODGSON 
: I think that Dr Pachauri has put his finger on it and I think that the Intergovernmental Panel on Climate Change as a body of knowledge has done this globe an amazing service. However the member overlooks the fact that there is the idea of a full charge and there is the idea of a marginal charge for additional emissions. The marginal cost—the marginal price signals—is something that will come into play in this country ahead of its coming into play in most countries. If we can get it through we can say that we have shown some degree of leadership in this area. 
Peter Brown 
: Can I outline a few facts to the Minister: New Zealand coastal vessels already face costs that foreign vessels do not— 
Madam SPEAKER 
: Is this the question please? Would the member just ask the question. 
Peter Brown 
: Is the Minister aware of these concerns: New Zealand coastal vessels already face costs that foreign vessels do not fuel costs represent a significant proportion of a vessel’s operating costs and a coal-burning vessel would be exempt while a liquid-fuel vessel would not be exempt? Does the Minister agree that that does not make sense and something must be done about it? 
Hon PETE HODGSON 
: I am aware of the first two facts that the member posits; I was unaware of the third. But then again I do not know of a coal-fired vessel. Maybe we still have them; I am not sure.