Fitzsimons Jeanette: Questions for Oral Answer — Questions to Ministers 
Fitzsimons Jeanette: Questions for Oral Answer — Questions to Ministers 
[Volume:657;Page:6320] 
2.  
JEANETTE FITZSIMONS (Green) 
 to the  
Minister for Climate Change Issues 
: When are New Zealand’s gross domestic emissions forecast to peak and permanently decline under the Government’s proposed changes to the emissions trading scheme? 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 New Zealand’s emissions have grown from 61 million tonnes in 1990 to 76 million tonnes last year and are projected to go up to 86 million tonnes in 2020 on a business-as-usual basis. Determining the future profile of emissions is difficult because under both the current and the revised emissions trading schemes such analysis depends on the long-term carbon price. That price is in turn very dependent on the success of future international negotiations. If we make reasonable assumptions about the carbon price and prospective forestry investment I am advised that our emissions relative to Kyoto Protocol rules would peak late next decade and be 20 percent down on business as usual or down by 16 million tonnes. 
Jeanette Fitzsimons 
: I raise a point of order Mr Speaker. I asked about gross emissions and the Minister answered about net emissions. Perhaps that can be taken into account as I ask my supplementary question. 
Mr SPEAKER 
: I hear what the member says. 
Jeanette Fitzsimons 
: Or perhaps the Minister would like to reply in terms of gross emissions. 
Mr SPEAKER 
: The Minister gave a pretty comprehensive answer. I think there was no attempt to evade the question but I appreciate that in terms of the member asking her supplementary question. 
Jeanette Fitzsimons 
: In the light of the Minister’s reply about net— 
Hon Pete Hodgson 
: I raise a point of order Mr Speaker. In respect of the comprehensiveness of the Minister’s answer I agree that it was. The point I would like to make to you is that this question was on notice. The words “gross” and “net” mean very different things in terms of climate change matters and the word “gross” was in the question on notice. The Minister at the end of his answer gave the pivotal distinction of net emissions and in that respect he did not address the question that he had several hours to look at. 
Mr SPEAKER 
: If the Minister has the data on gross emissions I invite him to provide that information. 
Hon Dr NICK SMITH 
: In my answer I referred to the fact that the analysis is very sensitive to the carbon price. The gross emissions are particularly sensitive to the carbon price and that is why I gave the advice I have received in respect of the net emissions as per the rules of the current Kyoto Protocol. 
Jeanette Fitzsimons 
: Is the Minister not confirming that his Government intends that New Zealand’s gross domestic climate change emissions will continue to rise indefinitely because an intensity or output-based allocation means that the more one’s pollution grows the bigger the subsidy one gets? 
Hon Dr NICK SMITH 
: I think we all accept that the problem of global warming is indeed a global problem. This Government takes the view that to send an industry like steel or aluminium or cement offshore so that the emissions occur somewhere else on the planet provides absolutely no benefit other than exporting jobs. That is why our emissions trading scheme is focused on providing an incentive for energy efficiency and not for exporting jobs and emissions. 
Hekia Parata 
: Tena koe Mr Speaker. How do the variations to the emissions trading scheme agreed with the Maori Party compare with those agreed in Labour’s minority report and in discussions with the Minister? 
Hon Dr NICK SMITH 
: The answer is not much and that is why I find Labour’s trenchant criticism of the Maori Party and of the revised scheme a bit unfair. Labour agreed to the entry date of 1 July for stationary energy transport and electricity. Labour agreed to— 
Charles Chauvel 
: I raise a point of order Mr Speaker. The question asked the Minister to make comment on matters for which he bears no responsibility whatsoever: first the minority report of a political party of which he is not a member; and second negotiations that he is now proceeding to misrepresent. 
Hon Dr NICK SMITH 
: Point of order— 
Mr SPEAKER 
: I am not sure I need the Minister’s comment. I am happy to rule on the matter. The Minister was asked to compare a couple of sets of information which the Minister is perfectly at liberty to do. There is absolutely nothing out of order about that. 
Hon Dr NICK SMITH 
: I note that the revised emissions trading scheme takes an intensity approach which was agreed by members opposite. It also provides for a transitional fixed price and a transitional fixed price was agreed to by Labour. It is most remarkable for Labour to describe our scheme as fiscally irresponsible. That is pretty strange because Labour’s proposed changes were going to cost about the same. 
Jeanette Fitzsimons 
: Was the Minister’s earlier answer a confirmation that this Government has no intention at all of moving New Zealand to a low-carbon economy but instead simply wishes to pass the cost onto the next generation of Parliament’s Ministers and New Zealanders? 
Hon Dr NICK SMITH 
: Not at all. I point out that the revised emissions trading scheme that has been agreed to by the Government and the Maori Party takes in more sectors on 1 July next year than are covered by the European emissions trading scheme. I note that we will be the only country outside of Europe to have an emissions trading scheme operating on 1 July next year and that our scheme is broadly in line with that proposed by Australia. That therefore shows we have appropriately balanced New Zealand’s economic interests as well as the importance of the environment. 
Hekia Parata 
: Is it true that this scheme will cost the Government billions of dollars in paying for industry emissions as a consequence of the slow phase-out of industry support? 
Hon Dr NICK SMITH 
: No and I am surprised that claim has been made. The previous Government’s scheme had the Government budgeting to make $23 billion from the sale of emissions units—$23 billion. The phase-out that is being proposed in our revised scheme which is broadly in line with Australia effectively has it so that it is fiscally neutral—that is the Government does not make a whole lot of money from the emissions trading scheme but nor does it cost the Government. I know that with the proposed changes to the scheme our phase-out is in line with our medium and long-term emissions reduction targets. 
Jeanette Fitzsimons 
: Why is the Minister so hell-bent on aligning with a non-existent Australian scheme that may never pass through the Australian Parliament when that alignment makes it impossible to align with the existing European Union scheme or the proposed United States or Japanese schemes none of which will accept intensity-based allocations? 
Hon Dr NICK SMITH 
: I think the member is misinformed. It is interesting that officials from both Australia and New Zealand have been invited to Washington as they work on the Waxman-Markey Bill before the United States Congress specifically on this issue of an intensity-based approach. I also note that in communications from European Governments that is the approach they are intending to take in the next phase of their emissions trading scheme for the very reason that an intensity-based approach is an intelligent way of dealing with the problem of leakage. 
Jeanette Fitzsimons 
: What is the point of persevering with a scheme that has such a low price of carbon that it will not change anyone’s behaviour where half of New Zealand’s emissions are left outside for 6 years and where the big polluters get bigger incentives to pollute with more free credits; how will that scheme have any environmental benefits whatsoever? 
Hon Dr NICK SMITH 
: I point out that the scheme we are planning to introduce involves a very substantive cost. We are talking about 50 million units of obligations at a cost of $25 each. There are a number of technologies that become economic for reducing emissions. I also point out that climate change is a long-term issue. These are transitional measures. Frankly this Parliament has been debating a carbon tax and an emissions trading scheme for the whole time I have been here and I think it is an important first step to make that start on 1 July next year.