Woods Megan: Climate Change Response (Removal of Transitional Measure) Amendment Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeWoods Megan: Climate Change Response (Removal of Transitional Measure) Amendment Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 26 May 2016. Volume:714;Page:11360. Text is incorporated into the Bound Volume.]Dr MEGAN WOODS (Labour—Wigram): I am happy to take a call on what I am sure will be one of many calls over the course of the next couple of hours on this bill. This is to signal that Labour will be supporting this legislation and that we think this is a positive tentative baby step in the right direction. In fact we feel quite honoured to see this Government stand up and take its first steps in front of us in terms of doing something about addressing climate change. I only wish we had a polaroid camera here so we could have captured it for posterity.What this bill does is a positive thing but it cannot be seen in isolation. The message we want to give to the Government is that this cannot be a cherry-picked idea from the emissions trading scheme (ETS) review that exists in isolation. What we fear is that the Government sees the ETS as a strategy and not as the tool that it is in terms of managing our emissions. The Minister for Climate Change Issues outlined the job that New Zealand has ahead of itself in terms of meeting its international emissions reduction targets. It is a large job that New Zealand has ahead of itself in order to do this. The Minister seems to realise that we simply cannot trade our way out of this in the way that the previous Minister thought we could and that we do actually have to do something.Getting rid of the one-for-two subsidy within the emissions trading scheme cannot exist in isolation. If we truly want to address New Zealand’s emissions there are some other thorny issues that we must grasp. We must grasp the issue in agriculture and the fact it is still remaining outside our emissions trading scheme. When we have an emissions profile that 50 percent of our emissions come from a sector and we fail to include it in the tool that is charged with moderating our emissions in our economy and reducing our emissions in our economy we are not going to have an effective tool.I also note the price cap that is remaining there at $25 a tonne means this great free-market Government is not prepared to put a price floor of where a price cannot fall below but it is willing to put a cap of where it cannot go. I note this figure of $25 is out of kilter with what business and industry have been saying. The BusinessNZ Energy Council put together a very good report around energy consumption in our future modelling in 2050 on a price somewhere between $60 and $115 a tonne for carbon.We cannot have a Government that continues to put in place these kinds of ceilings on the price of carbon because quite simply it is this kind of thinking—this kind of 20th century thinking from this Government when it comes to climate change—that is going to fail to see us transform our economy in the way we need to. It fails to see the opportunities that a low-carbon economy puts in front of us the kinds of opportunities it provides for jobs if planned correctly. The failure to put together a comprehensive range of changes to the ETS illustrates this very clearly. What we see here also is the ceiling of $25 a tonne. I would ask the Minister to think about putting in place an amendment when we get to the Committee stage of this bill to also put in place a price floor.Let us face the elephant in the room around the hot air credits this Government let in around the same time it decided to put in place this one-for-two. It let dodgy fraudulent credits into our emissions trading scheme which crashed the price of carbon in this country and made it absolutely ineffective in reducing our emissions made it absolutely ineffective in terms of doing the things it needed to do as an effective means of being a lever in our economy to make those changes. I know we are putting this legislation through under urgency but I really do ask that the Minister think about an amendment she could put up at the Committee stage that would see that we will never return to that place. The Minister has said that it is wrong and can never happen again but I would like to see a commitment—a legislative commitment—that that will never happen again.This is a Government that knew exactly what it was doing when it let fraudulent hot air credits into our emissions trading scheme. It is a Government that sat back and let it happen and crashed the very thing we could be doing to reduce our emissions trading. One of the implications of allowing those fraudulent credits into our system is that we now have a backlog and we have a lot of banked Kyoto credits within our emissions trading scheme. These have to be used before the Paris Agreement comes into force in 2020.This is make-up on what this Government knows it has done wrong. It cannot simply enter into the post-2020 world—when the world must show a commitment and New Zealand has to lift its game with the number of banked credits it has sitting there. The Government has to remove around 250 million tonnes of carbon dioxide between 2021 and 2030 under the Paris Agreement and will at best get 50 million tonnes of that removal out of new plantings. The Government knows the emissions trading scheme. The ability to trade is something it absolutely has to have in place and it has to be in there.One of the things when we are talking about the price of New Zealand Units and we are talking about the $25 cap—which of course the Government now speaks of with great pride saying that you cannot buy the dodgy fraudulent hot air credits that it previously let into our system. This was not because the Government changed its mind and decided it was wrong and we should stop the trade in this kind of dodgy credit it is simply because New Zealand did not enter into Kyoto II the second protocol. But in a post-Paris world what we will see happening is that New Zealand will once again start trading on the international market in terms of carbon credits.New Zealand had a highly conditional target when it agreed in Paris what was going to happen. One of those conditions around our agreement was the transparency work that needed to be put in place to ensure that international credits both were environmentally sound and would reduce carbon within the atmosphere somewhere in the world which is what the dodgy credits we were buying in simply did not do. For New Zealand the Minister has gone to New York and she has signed the Paris Agreement and she is now saying that we can ratify that treaty. But we have to be absolutely sure that transparency work is done if we are going to have a functioning and effective ETS.For Labour climate change and addressing climate change offer real opportunities. If we do this right and do not put in place false mechanisms we have an opportunity to transform parts of our country to create industries and to create jobs. And most importantly if we start doing the planning now and we do that planning right we have the opportunity to put in place the skills training that is going to be required for a low-carbon economy. A free-market approach that just waits to see what happens which we are seeing from this Government in regard to climate change is going to leave ordinary people high and dry. What we are committed to is a just transition when it comes to climate change to make sure we seize the opportunities and that not one person gets left behind.We need to do more on climate change. New Zealand must reach its targets. This is a positive first step but it is in no way enough. It needs to be accompanied by far more action on climate change and I look forward to the contributions from speakers coming up to tell me what other parts of the ETS review they will be putting in place. Why not a carbon floor as well as a carbon ceiling? What are the things we are going to do around agriculture to finally address the issue that will see a real reduction in New Zealand’s greenhouse gases? These are the hard questions New Zealand must face and these are the hard questions Labour is willing to face.