Groser Tim: Climate Change (Emissions Trading and Renewable Preference) Bill — In Committee 
Groser Tim: Climate Change (Emissions Trading and Renewable Preference) Bill — In Committee 
[Volume:650;Page:18612] 
TIM GROSER (National) 
: 
 I suspect that most members know the phrase “the devil is in the detail” and what it means. My interpretation of it is that whether one looks at a contract whether one looks at a bill or whether one looks at an international economic agreement the bold preambular language is all very nice and very attractive but the bits that actually matter are usually highly technical provisions formally contained in footnotes and annexes that only high priests can understand. That is the general experience that people have in mind when they use this phrase. When we are presented as legislators with 785 amendments coming on top of a bill of unbelievable complexity there is a high chance of mistakes and a high probability that this Parliament is passing this far-reaching legislation with little idea whatsoever about its effects. 
My colleague Dr Nick Smith has just given one example—only one example that we have recently found out about—in respect of cogeneration. I want to drill down into another issue which I suspect is far far larger than the issue of cogeneration. It is a deeply technical point—but remember the phrase “the devil is in the detail—and it is the implication of what is called the greening of the assigned amount units. It is about the Russian hot air units. The underlying question is—and I did ask the Minister during the Committee stage to come up with an economic estimate but even an approximate one would have been fine—what is the likely long-term impact to our economy of this so-called technical change in limiting access to the cheapest available assigned amount units? No answer was given of course; not even an attempt at an answer. 
Let me just try to explore this a little more deeply. As I understand it—and I am no expert in this; let me make this clear—inside the European Union there is a range of prices for carbon credits. They range roughly from around €9 to around €20—that is around US$21 and NZ$44 to NZ$45. The difference is very large when one multiplies it by the Government’s estimate of some 22 million tonnes of carbon dioxide - equivalent gases that we will actually have to pay for. It makes a vast difference to the bill as to which end of that price spectrum one goes into. Of course outside the European Union even lower prices are available on the international market and some of them no doubt are rather dubious. But nevertheless the point is that this is an integral part of the Kyoto Protocol framework. 
We all know that inside the more extreme parts of the green movement this is actually a very controversial issue. They do not particularly like the idea of Russian hot air units and like to put maximum pressure on people to avoid using them. But it is part of the political balance of Kyoto. Without it Kyoto would not have been put together; without it the Russians would not have come into the Kyoto agreement; without it we would be looking at a much different deal. So it is part of the negotiating balance of the agreement. 
Of course the people on the extreme end of this view do not seek to get a balance between the economic and the environmental sides of this equation so they are not interested in the underlying rationale for this which is to drive this down as we put a price on carbon in the international economy at least cost. That is the whole structure. But the people who do not care about these costs want to make it as difficult as possible for countries to meet their obligations using the full tool kit of the Kyoto Protocol. So I want to know from Government members: what is the nature of the deal behind this? What is the price range in practice as a consequence of this enabling legislation? It is my understanding that the actual regulation will have to be written later but what is the economic impact of limiting New Zealand’s access to low-cost assigned amount units? As far as the rationale of quoting the European Union which scorns the use of this is concerned I find this to be hypocrisy on a giant scale. First of all it ignores the fact that the European Union has limited the key issue in its own emissions rating.