Shirley Ken: Urgent Debates — Greenhouse Gas Emissions—Release of Report 
Shirley Ken: Urgent Debates — Greenhouse Gas Emissions—Release of Report 
[Volume:627;Page:21766] 
Hon KEN SHIRLEY (ACT) 
: 
 The ACT party is the only party in this Parliament that has consistently and vociferously opposed New Zealand’s signing of the Kyoto Protocol. If the Kyoto Protocol is the answer what on earth is the question? The protocol is a fundamentally flawed instrument. The Labour Government’s foolish adherence to it I believe defies logic. 
The protocol is grossly unfair. How it works is that nations have to meet 1990 emission levels by the first reporting date 2008-12—those OECD countries that have ratified it that is. That is why it is unfair. The rest of the world has to do nothing. Only those OECD nations that have ratified the protocol have to do anything. New Zealand just happens to be the only Southern Hemisphere country that has ratified it. Only two other nations in APEC Canada and Japan have ratified it. New Zealand is the only nation in ASEAN that has ratified it. None of our key trading partners—the United States and Australia particularly—have ratified it. So the protocol is unfair to that extent. It is also unfair to the extent that it has a huge impact on New Zealand. Because of that 1990 arbitrary selection date we are at a huge disadvantage. The Kyoto Protocol is not about emissions per head of population or anything like that. It is about relative emissions—in other words what they are in 2008 relative to 1990. 
 It just so happens that New Zealand had a huge fortunately dependency on hydroelectricity up until the late 1980s but as we know we were not damming or building any more hydro stations and we started developing fossil fuels. So our energy consumption in electricity generation in terms of carbon dioxide emissions is relatively per capita quite small. Conversely the Europeans had the advantage of the breakdown of the Soviet Union. All those huge brown smoke industries of Poland Bulgaria Romania and the Soviet Union itself were pumping out massive pollution—carbon dioxide emissions—and Europe of course has a much lower relative target to meet because of that. So this particular protocol suits the Europeans but it does not suit many other nations of the world. The other aspect is that apart from being grossly unfair and distortionary even the UN scientists on the panel concede that the protocol does not achieve its basic objectives. That is why I ask: if the Kyoto Protocol is the answer what on earth is the question? 
I believe that climate change is a reality. The evidence for climate change is overwhelming but the point to make is that it always has been. Climate change on this planet is very dynamic and it seems that when we have a period of change it can be quite dramatic and more recent work indicates that dramatic changes can occur in decades if not centuries rather than over longer periods. The question then is: to what extent is the anthropogenic effect driving it? I think the mobilisation of fossil fuels since the Industrial Revolution is having an impact. The evidence is increasingly showing that it is having an impact but I believe that pales into insignificance compared with the natural cycles particularly the orbital variations which actually drive the climate on this planet. 
Some members will be familiar with the Milankovitch cycle and the various cycles that go with that. In the last million years we have had a succession of ice ages. Ice ages tend to last between 70 and 100000 years with rather brief intermittent interglacial periods of 15000 to 20000 years. Of course the last big meltdown was about 15000 years ago and we have had a million years of records of the glacial period and on that continuation of that cycle it is clear we are actually heading to the next glaciation in the bigger picture. It might be a few hundred or few thousand years away but that—the next glaciation—is where we are heading to in the cycle and that is based on records going back a million years. 
Then we come to the now and by that we mean the next few decades and perhaps the next hundred years or so and there is sufficient evidence for concern. I concede that and most scientists do but the Kyoto Protocol does not address it and it is very distortionary. This Government in particular I believe has made a number of very foolish policy decisions. It is as if it has gone out and said that New Zealand will put on the thickest hair shirt and will go out to the world and lead the way and change behaviour. That is a very very foolish position to take and I am very surprised—well no I am not surprised that the Labour Government had done it; it seems to be its wont to think it can change the world to that extent. 
When we look at some of the policies the Government has implemented there is actually nothing wrong with market instruments. I was on the Government Working Group on Climate Change Policy in the mid-1980s. Bill Faulkner Guy Salmon Keith Turner who is now with Meridian and myself were the authors of the group’s report  
Climate Change and CO2 Policy: A Durable Response. 
 We recognised that if there is an issue putting aside the science then a market instrument was a fair way of actually implementing any response. But this Government has not allowed any market instrument to work. If we are saying we want more plantings in forestry because new forestry plantation absorbs carbon from the atmosphere—after all carbon dioxide is not a pollutant; it is actually a fertiliser for plant life and it is what drives plant life—we would as part of the economic instrument allow forest owners to trade the economic instrument and the encouragement would have been to plant more forests. But what did this socialist Government do? It nationalised the carbon credits. It said: “Oh no the Government will take those thank you.” so it destroyed the economic instrument. 
Then on the other side of the ledger the Labour Government said it would have negotiated greenhouse gas agreements with industry. So instead of letting the carbon credits be traded the Government said it would make exemptions. It said that if industries lobbied the Government and knocked on Ministers’ doors and said: “We’re a big industry and this is hurting us.” then industry would be able to negotiate with the Government to get an exemption. But that just politicises the process and again destroys the economic instrument. All it means is that the Government is getting its hands on more and more levers that drive the economy—and energy does drive this economy. The other aspect is that we end up with the energy efficient actually subsidising the energy inefficient. So that is a foolish part of it in terms of this Labour Government’s policy. 
We then look at the electricity market and what did the Government decide there? It decided it would slap a tax $15 a tonne on fossil fuels principally coal. But hang on a minute—how does the electricity market work in this country? We have a national grid. We have 200 nodal points of take-off. We run an auction every half-hour and the highest price sets the price. To the extent that Genesis’s Huntly power station is the biggest power station in the country with 1000 megawatts and particularly when our hydro storage is low we have to rely upon Huntly for that baseload and what we call hydrofirming Huntly will be paying the $15 a tonne carbon tax on its coal. 
The point is that everyone else gets that same price so the hydro generators get a windfall profit. And who owns the big hydro generators? The three State-owned enterprises: Genesis Mighty River and Meridian do. So all the Government is doing is taxing the economy and we see all the problems associated with that—as if we are not taxed enough already—and making our industries less competitive than those of our trading partners and most of the rest of the world. So that money is going back into State coffers through the dividend payments from those State-owned enterprises. 
That is not an economic instrument. That is just more State control; more of the Government taking control of the levers of the economy. The policy is doomed to failure and it is about time this Government woke up. Now it has had this rude shock. It always said that not to sign the Kyoto Protocol would be a no-brainer; it was like tearing up a big cheque for New Zealand. Well we have seen the truth of that statement. I remember Pete Hodgson ridiculing me at a private dinner with the head of the Intergovernmental Panel on Climate Change Dr Watson when I suggested that New Zealand may not be in a net situation. He ridiculed me and laughed and said: “Impossible impossible.” Well I say to Mr Hodgson the impossible has come to pass. I think for a number of reasons it was predictable from the outset that that would be the situation. So the ACT party will continue to oppose this foolish adherence to the fundamentally flawed Kyoto Protocol.