Smith Nick: Questions for Oral Answer — Questions to Ministers 
Smith Nick: Questions for Oral Answer — Questions to Ministers 
[Volume:630;Page:2493] 
10.  
Hon Dr NICK SMITH (National—Nelson) 
 to the  
Minister responsible for Climate Change Issues 
: Does he stand by the statement to the House on 16 February 2006 that New Zealand’s Kyoto liability for the first commitment period would be $562 million; if not why not? 
Hon PETE HODGSON (Acting Minister responsible for Climate Change Issues) 
: 
 Under present policy settings the first commitment period liability listed against the Crown accounts is $562 million. However that liability is revised every May and my best guess is that the revised price of carbon will rise substantially. 
Hon Dr Nick Smith 
: Why will the Minister not accept that the cost of Kyoto is now over $1 billion given that Treasury advised the Local Government and Environment Committee that the median estimate of the carbon price for that period is $16 a tonne and that the Minister has already accepted a 64 million - tonne deficit—and when I went to school 64 million times $16 came to $1.024 billion? 
Hon PETE HODGSON 
: If the cost did become $1 billion this May next May or some other time it would be $1 billion over 5 years. Without wanting in any way to minimise that I point out that it would be about one-seventh of 1 percent of GDP over that time. That is the size of it. That cost needs to be weighed against the costs of climate change itself and what happens if the world does nothing. 
Hon Marian Hobbs 
: Further to the comment he has just made has the Minister seen any reports costing the economic impacts of climate change on New Zealand as opposed to the cost of Kyoto compliance? 
Hon PETE HODGSON 
: Yes I have. From an economic perspective the most significant costs of climate change would be an increase of up to fourfold in flood risk in most regions; a twofold to fourfold increase in drought risk especially in eastern regions; eroding and retreating coastlines; and changing biosecurity risks. The costs of these impacts are likely to be highly significant for New Zealand. The February 2004 flood cost about $0.3 billion. The late-1990s droughts cost well over $1 billion. 
R Doug Woolerton 
: Would the Minister agree that we should look at the whole Kyoto question again given that we cannot seem to achieve an international regime that is acceptable to the major players? 
Hon PETE HODGSON 
: The member misunderstands the state of play. Every country in the Kyoto world with the exception of Russia quite a few Eastern European States and with a bit of luck Germany will be buying. That is all of Western Europe Canada Japan New Zealand etc. New Zealand had hoped to be in the selling list but we are likely not to be. We would be the only country in the selling list with an ordinary economy—not collapsed like the Eastern European economies—but it is now likely that we too will become buyers. 
Hon Dr Nick Smith 
: Can the Minister explain to the people of New Zealand how sending a cheque to the Russians for $100 million—maybe $1 billion—will make any difference at all to the number of droughts or storms New Zealand might have? 
Hon PETE HODGSON 
: The member pretends he does not understand “cap and trade”. The member pretends he does not understand the role of economic instruments. This is despite the fact that the member has given many speeches in favour of Kyoto of bringing economic and environmental policy together of “cap and trade” and of getting on top of climate change. He professes to want a cross-party arrangement. He professes to want to do something yet at every chance he gets up and grandstands because he gets his short-term kicks from doing so. 
Hon Dr Nick Smith 
: I raise a point of order Madam Speaker. My question was quite specific. I asked how droughts or floods in New Zealand might be made less severe by sending a cheque to Russia. No part of the Minister’s answer sought to address that question. 
Hon PETE HODGSON 
: If a country receives money from the Kyoto Protocol it is because the country has reduced its carbon dioxide emissions—[ 
Interruption 
] Indeed it has. Because it has reduced its carbon dioxide emissions the global atmosphere will be less affected and because the global atmosphere will be less affected that will make New Zealand’s climate and the climate of the rest of the world a little less changed than it otherwise would be. 
Hon Dr Nick Smith 
: Does the Minister recall telling the people of New Zealand that New Zealand stood to make hundreds of millions of dollars from his Government’s decision to ratify Kyoto; and now that we are in fact going to have to pay about $1 billion—or $250 for every man woman and child—for his blunder does he believe he owes the public an apology? 
Hon PETE HODGSON 
: Yes I do recall that. I was relying on advice that I received year after year after year from officials—which advice changed in May 2005. Those are the facts of the matter. 
Hon Dr Nick Smith 
: Has the Minister seen the statement by Dr Kevin Patterson senior energy analyst at the Ministry of Economic Development who said: “The energy modelling team at the time did all the work working out what the projections were going to be. Then they came up with a final number. Then they had a big whack taken off and that was Pete Hodgson’s initiative.”; and why pre-election did the Minister cook the books to hide the scale of his bungling? 
Hon PETE HODGSON 
: I resent the question actually because there was no cooking of the books by me pre-election. In fact 4 months before the election the bad news of May 2005 came out. That was the timing. The member has forgotten. The truth of the matter is that the reversal of our fortunes occurred 4 months before an election not afterwards. What is more I will say straightforwardly to the member that I played no part in influencing that report except to ask for it to be reviewed. 
Hon Dr Nick Smith 
: I seek leave of the House to table the news report from the “Business Herald” in which Dr Kevin Patterson said that Pete Hodgson deliberately changed the numbers. 
Madam SPEAKER 
: Leave is sought to table that newspaper report. Is there any objection? There is objection.