Court SimonSIMON COURT (ACT): Thank you Mr Chair. Thank you Minister and I do appreciate that for many members of the House and for those who may be watching today wondering what all the debate is about—an emissions trading scheme and reserve price at auction—isn't it just as simple as auctioning a house or going to Turners auctions and buying yourself a cheap second-hand internal combustion engine vehicle to take your family to and from church or to the beach or to work—that first tradie van that an apprentice might buy? But it's actually more complicated than that. Minister you've spoken of the oversupply of credits and I haven't heard that term before except used by you in this House and by officials. Yet when we dug further into the oversupply issue of that 120 million-odd New Zealand Units which are currently held by participants in the market 66 million of them are in forestry. What that means is they're essentially locked in trees because if those foresters wish to take advantage of those units and sell them or trade them or lease them out sooner or later they're going to have to when they cut down their trees—assuming that they're not just growing pines for a postcard or for some other reason—pay back those New Zealand Units unless they replant. So 66 million of those credits are essentially locked. They're in a vault. In fact they're buried deep underground. The carbon is locked. They can never come out. So what we're really talking about is about 55 million units and a number of businesses have purchased New Zealand Units on the secondary market over time and when those units were much cheaper than they are now. They've done that because they recognised that the trajectory of New Zealand's market-based system was that the price would increase for these units over time and that that would more correctly reflect the externalities that emitting carbon dioxide into the atmosphere in New Zealand causes.There's no simple way. We've heard about a carbon tax. We've heard about a whole lot of other policies. But there is no simple way to put a price on the tailpipe of your car on the emissions from the steel mill the emissions from the cement kiln at Portland in Whangārei or the pulp and paper mills or even the emissions from that wonderful Huntly power station which generates a fantastic thermal baseload of energy and keeps the lights on in the North Island particularly in winter when it's dry—and potentially in summer in the future where Aucklanders and those in Hamilton and other parts of the country will want to use their heat pumps as air conditioners. Because that's what progress is: progress is using technology that we thought we might use for one thing—a heat pump to keep us warm in winter. It actually turns out we might like to keep the doors closed and run an air con unit in summer because it's much more comfortable watching the cricket and being nice and cool inside than having a blast of heat. So it's important that we recognise that these technologies like heat pumps and like the industries which produce carbon dioxide emissions in order to make products like pulp and paper like cement and steel and to refine the fuel that we absolutely depend on in New Zealand—because I know we've heard New Zealand Refining Company at Marsden Point is planning to mothball or shut down their refinery and to import fuel. That introduces a whole lot of new risks and potentially this rapid increase in the price of New Zealand Units—CHAIRPERSON (Adrian Rurawhe): The member's done really well on his contribution. In his last 30 seconds can he bring it to the actual Part 2 of this bill?SIMON COURT: Thank you Mr Chair. So we've got about 66 million credits locked up in forestry. Those businesses and industry—55 million potentially—have hedged to protect their businesses against future price shocks and if these auctions don't clear then they may not have sufficient credits to pay for their future emissions. It's not up to a Government or an auction methodology or those who set the auction methodology to say when a business should sacrifice some or all of its credits. So that's why—CHAIRPERSON (Adrian Rurawhe): Order! The member's time has expired. The question is that Stuart Smith's tabled amendment to Part 2 amending clause 9 with new regulation 15A be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 43New Zealand National 33; ACT New Zealand 10.Noes 75New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.Amendment not agreed to.CHAIRPERSON (Adrian Rurawhe): The question is that Simon Court's amendments to Part 2 as set out on Supplementary Order Paper 15 be agreed to.A party vote was called for on the question That the amendments be agreed to.Ayes 43New Zealand National 33; ACT New Zealand 10.Noes 75New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.Amendments not agreed to.CHAIRPERSON (Adrian Rurawhe): The question is that Part 2 stand part.A party vote was called for on the question That Part 2 be agreed to.Ayes 75New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.Noes 43New Zealand National 33; ACT New Zealand 10.Part 2 agreed to.