Fitzsimons Jeanette: Urgent Debates — Emissions Trading Scheme—Government Announcement 
Fitzsimons Jeanette: Urgent Debates — Emissions Trading Scheme—Government Announcement 
[Volume:642;Page:12088] 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. Ten years ago this year New Zealand helped to negotiate an international agreement to reduce climate change emissions in all developed countries. We took a binding target ourselves to reduce our emissions back to our 1990 levels. That agreement gave countries a 10-year opportunity—a 10-year transitional time—to put in place economic instruments stabilise their emissions and work with their sectors to find ways to meet this agreement. 
In just 3 months’ time those emissions begin to count. They count in real dollars. In 2012 the New Zealand taxpayer is liable for real dollars for all of our emissions that are above 1990 levels from 1 January next year. Today 3 months before that time a proposal is before us to put a price on carbon through an emissions trading scheme—a scheme that will not be legislated for until after the first Kyoto Protocol period is under way and will not come fully into force until that period is over. 
The Labour Government’s emissions trading scheme is soundly structured and its principles are good. I have to give the scheme credit for that. If it had happened 10 years ago it would have really made a difference to New Zealand’s compliance with Kyoto and to New Zealand’s long-term emissions track. But compared with what we need to do today it is rather tepid. And National must take as much responsibility for that as Labour because for 9 years after signing the United Nations Framework Convention on Climate Change in 1990 it did nothing either. 
Rob Storey went to the conference in Rio de Janeiro in 1992 and made a promise that New Zealand would reduce its emissions by 20 percent by 2000. Well he had that knocked out of him pretty fast after he got back. Simon Upton negotiated the Kyoto agreement and started a consultation programme about whether we should have emissions trading or a carbon charge. Lots of New Zealanders participated in that process. A good summary was written but Simon could not get either of the options through his Cabinet. The whole idea lapsed and New Zealand went back to sleep. 
Consequently New Zealand’s emissions have the highest rate of growth of those in the developed world since 1990 and they are now 25 percent above what they were in 1990. Back in 1993—before Kyoto was even developed—on the basis of the framework convention the Green Party proposed that there should be a price put on carbon across the economy. We proposed to do it through a carbon emissions charge and to recycle the money into tax cuts. That ought to gladden the hearts of people who are constantly calling for those. But they would have been tax cuts to the bottom band of income that all taxpayers pay not to the top band. Unfortunately we were not in a position to implement that proposal. We can only reflect on what New Zealand’s emissions might have been like today if it had come to pass in 1993. 
I give credit to the Government for the sound structural elements in its emissions trading scheme. It includes all sectors and all gases—but some of them very slowly. We will be trading in Kyoto-compliant units rather than some Monopoly money New Zealand unit which some people were worried might be the case. That means that our units will be linked to the world market and our price will be the world price. In terms of efficiency across the globe that is very important. 
The points of obligation—in other words the entities that will have to purchase credits and remit to the Government—are roughly the same as the Greens proposed in our policy last March. They will be oil companies electricity companies and probably agricultural processors like Fonterra rather than farms. That is certainly the most efficient way to do it. 
 The scheme will reduce deforestation somewhat. The Greens proposed a replanting incentive for old forests that are becoming mature and being deforested at a fast rate. That is effectively what the Government is doing by allocating them some free credits that they lose if they deforest. But instead of funding it out of the Kyoto credits that New Zealand earns for its forests as we proposed it is being funded by the taxpayer. So there is a large taxpayer payment to those old pre-1990 forests. That is because the Government has caved in to the very vocal post-1990 foresters who have been claiming that they have a property right to the credits that New Zealand earns. We absolutely reject that argument. We wanted them to receive a carbon payment for the carbon they had stored but not the whole credit. That could have been done easily with the Government sharing the Kyoto forest credits among the post-1990 and pre-1990 forests but instead the taxpayer will face a bill for $825 million as a subsidy to those old forests. It has to be done to stop them from being cut down but there was a better way to do it. 
The Prime Minister said that the scheme will be effective and fair and we agree that those are the two criteria by which it should be judged. Being effective means that our emissions have got to level off and then trend down permanently. There is no other way it can be effective for the climate. I want to repeat what I read at question time today from James Hansen one of the most respected scientists from the National Aeronautics and Space Administration and the Intergovernmental Panel on Climate Change. He said that even continuing to increase emissions each year for just another 10 years guarantees dramatic climate changes a different planet no sea ice in the Arctic worldwide repeated coastal tragedies associated with storms and a continuously rising sea level and regional disruptions due to freshwater shortages and shifting climatic zones. 
That was why I asked the Minister responsible for Climate Change Issues David Parker at question time how much our emissions would actually go down by 2012 compared with now. He said that they would go down. I repeated the question because I could not believe the answer and he said again that they would go down. I am very encouraged that the Minister believes that our emissions will go down by 2012 and that it is the purpose of the policy that they go down by 2012. But I cannot make the numbers reach that conclusion. 
There is no way that our gross emissions will reduce by 2012. Transport is increasing by 3 percent a year—that is about 17 percent over the next 5 years—and it is stated in the documents that emissions trading will lower that by only 0.3 percent. So that is still a rise of 16.7 percent by 2012. Agriculture faces no price at all so it will not be going down in the next 5 years; it will be going up. Electricity is growing by 2.7 percent a year and for 2 of those 5 years it faces no price at all. So the Government must be counting on avoided deforestation to reach those numbers. It certainly cannot come from new plantings. After 5 years new seedlings are so tiny that they absorb very little carbon although they will be great in the future. 
I cannot make the numbers for avoided deforestation add up to a big enough number to reduce our emissions over 5 years from where they are now. Then I hit on the answer. The Minister must be relying on the National Energy Efficiency and Conservation Strategy which will be announced next month and on measures not like trading but like changes to the building code and standards for appliances more efficient vehicles better public transport and more renewable energy. That must be what he is relying on to meet his target by 2012. That is good because I have been working very hard on those issues over the last 2 years. 
Even with those best projections though I have difficulty making the figures go down by 2012. If the Minister has other figures then I urge him to supply them to the House. We will welcome them. 
The Prime Minister says the scheme will be fair. Well the first way in which it is not fair is that the taxpayer will still be covering two-thirds of New Zealand’s bill in 2012 not the emitters. The taxpayer is particularly going to be subsidising New Zealand’s most profitable industry—the industry that has just received a windfall of on average $250000 per farm in increased milk payouts—which is the dairy industry. The dairy industry is responsible with the rest of the farming sector for half our emissions and it will not be in the scheme at all until the Kyoto period is over. 
In addition to that huge subsidies will help the industry transition to what happens after 2012 and when it does finally come in it comes in at 5 percent above its 1990 emissions and does not have to pay for anything up to that point. 
The particular unfairness with agriculture is that it competes for land use with forestry. Forestry will face the full deforestation liability on 1 January next year but agriculture will not face anything for 5 years. That is what the forestry sector has been most angry about recently. It is being treated very different from farming and it should not be. 
The hard decisions have been left until after the election. There will be no electricity price rises until after the election and the allocation decisions for the competitiveness-at-risk industries are also being left until 2009. That means that the Government can say to industry that if its competitiveness is at risk it will be protected without having to say which firms will be protected and by how much until after the election. When the squeals come and some industries that think they should be helped are not—because if everybody is helped then it will not help our emissions at all—that will not happen until 2009. 
This proposal could be fixed. It is a good start. First we need to review the memorandum of understanding with the agriculture sector. The Minister said at question time that it is not on track to reduce its emissions voluntarily by 20 percent. Therefore the sector should be brought in in 2009 even if it gets a higher level of grandparenting. 
 We should bring forward the energy sector to 2009 even if we have to exempt the vulnerable industries for another year while an allocation is worked out. At the least most energy users ought to be brought in earlier than 2010. 
We should stop protecting export coal. Underground coalmining releases methane emissions from the coal seams. They count under Kyoto and New Zealand pays for them yet the documents indicate that the coalminer will not have to pay for them. That is easy to fix and should be fixed. It should cost the coal industry for the effects it has on the climate. 
Finally we should make sure no low-income families are still living in cold damp homes by 2012. We should make sure we build enough public transport so that as many people as possible do not need to use their cars to get to work but can leave them at home. We should also invest properly in a society and an infrastructure that makes it possible to lower people’s power and fuel bills. 
For the sake of the climate for the sake of the next generation and for the sake of vulnerable people today we can make amendments to this proposal that would make it more effective and more fair. That is what the Green Party will be advocating.