Norman Russel: Oral questions — Questions to MinistersText is incorporated into the Bound VolumeNorman Russel: Oral questions — Questions to Ministers[Sitting date: 31 March 2015. Volume:704;Page:2705. Text is incorporated into the Bound Volume.]3.Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Climate Change Issues: Will he submit an emissions reduction target to the UN by the 31 March deadline; and does he stand by his statement that New Zealand’s net emissions are projected to increase 48 percent in the next decade?Hon Dr NICK SMITH (Minister for the Environment) on behalf of theMinister for Climate Change Issues: We will be submitting a target for beyond 2020 well prior to the Paris conference in December but the member is incorrect in claiming there is a 31 March deadline. Only four of the nearly 200 parties to the climate change convention have so far submitted a target. The 48 percent increase quoted in net emissions is notional and not real because it assumes that when forests are harvested all the carbon dioxide is released as though the wood was immediately burned. This as the Minister pointed out at the time is not a true figure but an accounting anomaly that we are seeking to change through better rules in the negotiations.Dr Russel Norman: Is he disputing the projections produced by an official report from the Ministry for the Environment that show that New Zealand’s net greenhouse gas emissions will increase by 48 percent over the next decade under current policy settings?Hon Dr NICK SMITH: As I said in answering the primary question and as the Minister has pointed out that is based on a set of rules that assume that when a tree is cut down—and New Zealand has very large areas of forest that were planted in the early 1990s that are due to be harvested in the next decade—the moment those trees are cut down the carbon dioxide is released into the atmosphere. That is a scientific nonsense. That is not what actually happens and that is why this member quoting that 48 percent and implying that it results in a big increase in New Zealand’s actual emissions is incorrect.Dr Russel Norman: So does the Minister disagree with the Forest Owners Association president Paul Nicholls who said last month that the emissions trading scheme had been watered down so much that in each of the last 2 years about 10000 hectares were deforested as a result of the Government’s policy settings?Hon Dr NICK SMITH: When this Government came to office it took a very balanced decision that the full cost of the emissions trading scheme on consumers and on business when the global financial crisis hit was too large a cost and so implemented a more moderate emissions trading scheme. I think that was a very sensible response. It actually has New Zealand doing significantly more than most other countries in that we are actually the only country outside of Europe to have an emissions trading scheme. My view is that our response has been balanced. I note that New Zealand’s gross emissions are less than when we became the Government and they actually increased substantially when the Green Party supported the previous Labour administration.Dr Russel Norman: Does the Minister accept that the weakening of the emissions trading scheme that the Minister just described has resulted in reducing the price of carbon to pretty close to zero and that is one of the key reasons why New Zealand’s net greenhouse gas emissions have increased by 20 percent under this Government?Hon Dr NICK SMITH: No and the member’s question shows he does not actually understand the emissions trading scheme. You see the reason the carbon price has been so low is that New Zealand emitters have had access to very cheap international units arising from the global financial crisis. But that was only true until 1 January this year. I note that the current carbon price is about $4.50 and that current emissions emitters no longer have access to those international units. That actually means the emissions trading scheme has a far higher effective price.Dr Russel Norman: Will the Minister commit to matching the recently announced European climate target of 28 countries—part of the European Union—that they will be reducing greenhouse gas emissions by at least 40 percent below 1990 levels by 2030?Hon Dr NICK SMITH: There are a number of significant differences with Europe. The first is that its economies have done very poorly and unlike New Zealand are not growing. We on this side of the House are actually for growing the economy and for growing jobs. That is not occurring in Europe and we do not want to match its example. The second is that the population in Europe is in decline and because New Zealand is now so popular—is doing so well—we actually have our population increasing and that makes us different. The third element that makes us different is that New Zealand has a phenomenally high level of renewables. In fact it has increased from 65 percent to 80 percent unlike Europe which has about 15 percent. And so because we have a far higher proportion of renewables and our biggest portion of emissions is actually from agriculture we are in a very different position to those European countries. We do intend to pose a target. It will be a responsible target but one that does not ruin the New Zealand economy.Dr Russel Norman: Does the Minister accept the basic economic logic that a lower price on carbon will result in higher net greenhouse gas emissions and hence the Government’s policy of having a lower price on carbon is the reason why our net greenhouse gas emissions have increased so dramatically?Hon Dr NICK SMITH: Let us get the facts clear. Current gross emissions—gross emissions not including the forestry—have come down by 3 percent since this party has been in Government. Let me compare that with the previous Labour administration when greenhouse gas emissions grew by 8 percent. So actually emissions have come down. The member is absolutely true—that is the higher the price of carbon the greater incentive there is to reduce emissions. There is an honest trade-off to have between the cost of living and the cost of the economy and how much we want to reduce emissions. We are of a view on this side of the House post the global financial crisis that we need to take a cautious view on putting further New Zealanders out of work and putting extra costs on New Zealand households.Dr Russel Norman: So does he accept that the reason the Government has struggled so far to come up with an emissions reduction target is because the Government spent 6 years implementing policy that has resulted in increased net greenhouse gas emissions of 20 percent so far and a further 48 percent under the Government’s own projections?Hon Dr NICK SMITH: We came into Government with a commitment that we would meet our Kyoto Protocol obligations. That member said we never would. We have and we have done some. This Government set a target of a 5 percent reduction in emissions by 2020. Advice from the Ministry for the Environment officials is that we are on target to achieve that. The member keeps confusing net emissions with gross emissions and Kyoto rules with the Framework Convention on Climate Change rules to try to paint New Zealand in the worst possible picture. I invite him to actually look at results—look at results—like the fact that the level of renewable electricity in New Zealand has never been as high for 20 years with figures last week showing it has reached 80 percent.