Craig LizDr LIZ CRAIG (Labour): Thank you Mr Speaker. So the previous Government signed us up to the Paris Agreement which was good. They did so unfortunately without having the framework in place to actually achieve the reductions that were required. So what this bill does is put in place that framework that will allow us not only to achieve our commitments under the Paris Agreement but also the carbon budgets and the targets under the zero carbon bill. But it also creates that ability to work in partnership with the farming community agricultural community to develop new pricing mechanisms for our agricultural emissions. And unlike the framing of the previous speaker this is a true partnership. It's working alongside the primary industries to develop that way forward.So this is a substantive bill 225 pages. I silently apologised to the trees as I hit print on my computer. But what I want to do is talk a little bit about some of this partnership with the agricultural sector before I move on to talk about what the bill will do in terms of allowing us to meet some of those emission budgets and targets under the zero carbon bill. What this does is create a new agreement with the agricultural sector to develop a new way of looking at agricultural emissions and looking at whether we can indeed price them on farm which is critically important.All the farmers that I know care about the environment—absolutely care about the environment. What they've been telling me is this is the way they want to go on-farm carbon pricing because what it allows them to do is all those investments they're making in their farms at present—particularly looking around water around just environmental plans—it allows that to be acknowledged and the work that they're doing. So this is particularly important in making sure that we can develop those mechanisms for taking into account riparian strips shelter belts and on-farm carbon sequestration so taking those into account in terms of on-farm accounting. It also basically puts in place a mechanism where we can look at our farm environmental plans working out the detail on this and thinking about how we can look at greenhouse gases at the same time as thinking about our plans for water quality.So what the aim of this is is to look at farm-level pricing of livestock emissions and process a level pricing of obligations for fertiliser emissions from 2025 but also looking at starting reporting for livestock emissions at farm level from 2024 so putting in place that framework to make sure that this is working well. This is incredibly important because of the huge contribution that the primary industries make to our economy. But also taking into account that this is also incredibly important because just under 50 percent of our emissions are coming from agriculture. And so the work we do here is not only going to be significant for us as a country but it may well be significant on a global scale developing up that way of looking at on-farm carbon pricing.So what will happen as people have already mentioned is the Ministers of climate change and of agriculture will be required to report on progress in 2022 and basically having a look at the NZ emissions trading scheme (ETS) being the fall back option if the Climate Change Commission provides the advice that not enough progress is being made. But with the goodwill and the commitment of the primary sector out there I know that there's a real commitment to making sure that this works.So while some of the detail of this hasn't been worked out yet we've already had an undertaking that that further information and detail will be provided to the select committee so we can look at this in the select committee process because this is incredibly technical and a detailed bill—as I said it's over 220 pages. And so I'm really looking forward to the submissions that we're going to be receiving from our agricultural sector and from others to talk about how we get this right.But looking at some of the other key elements of this bill—because it's also important that we're meeting our targets under the zero carbon bill and also those emission budgets year on year. So one of the important things that this bill will do will enable the NZ ETS to be capped. What it does is introduces this decision-making framework that can restrict the overall supply of units into the scheme. Then what's accompanying that is regulations that set the overall limit each year. But then they always have to be out for five years so that provides certainty in the sector about what's coming further forward. That not only provides that certainty for the sector but it's also a key mechanism for looking at meeting our carbon emission budgets under the zero carbon bill.So the other thing the bill does is it removes the current $25 fixed price option and it replaces that with a cost-containment reserve. So what happens there is if those prices start to rise what can happen through the ETS auction is that the Government can release some more NZ units into the auction when things hit a particular level. So basically it allows the Government to look at managing supply of units in much more detail.The bill also looks at phasing down our industrial allocations from 2021 because under the Act at the moment a number of activities are either specified as 0.9 or 0.6. What this bill does is between 2021 and 2030 it allows for about a one percent reduction each year and that has got the capacity to actually speed that up after 2030. But it also has mechanisms to make sure that the Climate Change Commission can then recommend that we go faster or slower because what we don't want to do is end up in the situation where we get emission leakage because if we end up having industry moving offshore we may well paradoxically end up with higher emissions if they move to countries which basically don't have the access to a lot of the things we have here like a lot of renewable capacity and generation in our electricity sector.So basically what this bill does is not only create that framework for being able to meet our targets and our budgets under the zero carbon bill but it also allows us to start developing in partnership with the agricultural sector some on-farm pricing of emissions. But it also does another range of things looking at strengthening compliance and transparency. It also introduces averaging accounting for forestry and also has the new permanent forestry activity in the ETS. So there's a whole range of other things that this bill does but it's an incredibly important bill and is particularly significant for us as a country. I'm really looking forward to hearing those submissions during the select committee process so I commend this bill to the House.