Parker David: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — In Committee Speaker Recalled In Committee 
Text is incorporated into the Bound Volume 
Parker David: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — In Committee Speaker Recalled In Committee 
[Sitting date: 06 November 2012. Volume:685;Page:6320. Text is incorporated into the Bound Volume.] 
Hon DAVID PARKER (Labour) 
: 
 I want to talk to the title of this bill which is the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. The title implies that this bill is a serious attempt to respond to climate change and I want to say why in my opinion the bill should not proceed with that name. It is a misnomer to suggest that this bill will do anything meaningful to reduce New Zealand’s climate change emissions which after all is the objective of climate change policy. 
The main response for New Zealand to the challenges posed by our climbing emissions is to price emissions and that is intended to give an economic encouragement to the people who consume emissions-intensive products—like petrol or aluminium or steel—or to the people who produce the goods that are consumed by society to change the mix of goods that we consume in a way that reduces emissions. That simply put is what emissions pricing is going to do. Emissions pricing is an alternative to the other way we can reduce emissions which is to regulate. If you want to do something other than education the only two ways you can influence behaviour are by pricing something to encourage people to change their behaviour or by regulating and saying that thou shalt not do this or thou shalt do less of this. 
In New Zealand after quite a period of debate that lasted for more than one Government—National then Labour—we eventually got to the point in New Zealand where Parliament agreed that we should be trying to do our bit in the world in part through pricing emissions. It was never going to be the complete answer but it was always a very important part of the prescription for New Zealand. It worked in New Zealand in two main ways. First it was discouraging of increases in emissions-intensive goods and second it was effectively giving a price benefit to people who reduced emissions like those in the forestry sector because they sequester carbon in the trees which as they grow take carbon dioxide out of the atmosphere. That was the essential intention of the Act. 
For anyone to influence behaviour by price the price has to be meaningful. Otherwise it is a fig leaf and an excuse for inaction that you would take if you were not doing anything via price. And that is where we have got to in New Zealand now. This is just a fig leaf. This is not having any material effect on behaviour. We know that because the foresters who are the biggest potential reducers of greenhouse gases emanating from New Zealand came to us and said that the price now is so low that it does not influence behaviour. It does not allow them to overcome the disadvantage they have because they are facing the land price being paid in some areas by the dairy sector which can afford to pay a higher land price than they can in part because the dairy sector is protected from having any obligation to account for its agricultural emissions. 
So the forestry sector says that not only is the price very low and not acting as a sufficient incentive to new forests which are what New Zealand is overly reliant upon in terms of emissions reductions but also that it suffers this disadvantage of competing for land against a sector that is not facing any cost for its agricultural emissions. This bill if enacted puts that inclusion of agriculture on the never-never. It says that under this legislation it will never happen. Effectively Parliament would have to come back to legislate again. How does the bill do that? [ 
Bell rung 
] Mr Chairman— 
The CHAIRPERSON (Eric Roy) 
: The Hon David Parker—oh I might have pressed the bell a minute early. My apologies. 
Hon DAVID PARKER 
: Thank you Mr Chairman. I do accept your apology. 
The CHAIRPERSON (Eric Roy) 
: I do apologise. 
Hon DAVID PARKER 
: No that is all right. These things happen. What it does is it depresses the price of carbon into the foreseeable future down to such a derisory level that it is ineffective. We heard from the people who are service providers in buying and selling carbon rights and they said that because of the lack of a floor on the price of carbon and no restriction on some of these units that are washing around the world at a very low price effectively New Zealand’s price of carbon goes down to a dollar or $2 a tonne—not enough to influence behaviour. 
Let us not forget that the Government was worried that the price was going to go over $25 a tonne not so long ago and so it put a price cap in last time. The price has now gone to about a dollar or two dollars and the Government does not think that it needs to restrict units or have a price floor. [ 
Interruption 
] Five minutes from now is it? Thank you Mr Chairman. 
Well it just does not make sense particularly given this Government saying—and I remember the Hon David Carter saying it in earlier contributions on prior legislation—that we ought not to move ahead of Australia; Australia had a carbon price that was going to be later and the Government said lower than where New Zealand’s carbon price was heading. So that was the justification for both delay and a cap on price. 
The Australian price now is far higher than New Zealand’s price currently. It is about $30 a tonne—A$30 a tonne. It is probably going to come back from that a little bit but it is still a hell of a lot more—an enormous amount more—than the dollar or two dollars a tonne that we have got in New Zealand. So much for this pretence that this was about coordination with Australia—if that was the intent the Government has abandoned that. This scheme is so permissive of low prices that we will never be able to link with the European scheme. The Europeans are not going to link with a carbon pricing scheme that is as loose as this one is. So the idea that we can link with other schemes and therefore have deeper carbon markets is wrong too. 
We have got one-for-two free allocation. Even at a low price of $2 or $3 per tonne the Government is still saying not only can you have the benefit of that really low price but we will halve it again because you are going to have to remit only one unit for every two units of your emissions. Why is that necessary? This is just a fig leaf for inaction and as other speakers have said it makes a mockery of the Government’s pretence that it is going to reduce emissions by 50 percent by 2050. And I think that is sad. I do think that is sad. 
I do not think New Zealand can overcome these problems alone and I am not someone who says that we should sacrifice the interests of all our industries so that we are just chasing a pyrrhic victory all on our own. I do not think anyone on this side of the Chamber says that but I do think we should be doing something meaningful and I do think that means that we have a responsibility to the world to be actually doing something to try to curb our emissions growth. If it is not going to be through this legislation then maybe it should be though regulation. I certainly think there should be a floor on the price of carbon so I was disappointed that the Government voted down Kennedy Graham’s amendment to that effect. There should be a floor if you are going to have a ceiling. You cannot justify that asymmetric interference with what is meant to be a market-based approach to minimise emissions at the lowest and most efficient cost to the economy. 
This legislation is a disappointment. This legislation is a shadow of what was originally produced. It can actually be fixed in the future but at the moment New Zealand’s climate change response is effectively nil.