Groser Tim: Settlement Systems Futures and Emissions Units Bill — First Reading 
Groser Tim: Settlement Systems Futures and Emissions Units Bill — First Reading 
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TIM GROSER (National) 
: 
 The member preceding me Te Ururoa Flavell is very gracious. I thought I was going to be on the morning watch as a consequence of his rising to take a call. 
National supports the first reading of the Settlement Systems Futures and Emissions Units Bill and I will focus for a few minutes on the emissions trading side of the bill. In the deeply unlikely event that people are listening to the debate at this very late stage let me make it clear that National supports this bill’s setting up of a regulatory framework for emissions trading although we still have the most serious reservations about the underlying substantive bill to which the emissions trading scheme relates. The reason we support this bill is that irrespective of the design of any emissions trading scheme National recognises that we need a proper regulatory system in place that has domestic credibility that has international credibility that protects property rights and that deepens the markets. That is neutral to the actual substantive concept of the emissions trading scheme it underwrites. Rather than reiterate the technical description my colleague Simon Power so ably put out about the features of this bill that lead us to— 
Hon Lianne Dalziel 
: You mean “NZX so ably” Tim. 
TIM GROSER 
: No—I think there was benefit from the briefing and I heard the Minister read a speech that I am sure she herself spent a great deal of time crafting personally. 
We will support this bill irrespective of an emissions trading scheme that National will introduce and recently in a speech by our deputy leader there were set down six key principles on which we will base the construction of a more balanced emissions trading scheme. But we will need a framework which this bill sets out for the actual trading of the emissions units. 
I think that most important for this bill in terms of trying to understand what it will achieve is to see that it is very much a work in progress. We are essentially trialling here an administrative system of great complexity and potentially enormously important economic effects. If ever the old phrase “the law of unintended effects” applies I would argue it applies here. I think that it is a very commonplace observation but utterly correct to say in relation to this regulatory change that the two parts taken together—the substantive emissions trading scheme and this bill implementing the emissions trading process—are the most important reregulation of the New Zealand economy since the reforms of the 1980s and early 1990s. Although one could make an argument that at least those reforms were on well-trailed grounds in terms of international experience this legislation is literally entering uncharted waters here both in respect of the technical provisions of an emissions trading scheme and the substantive provisions of the emissions trading scheme it is intended to facilitate. 
For that reason the essential difference between the parties not on this bill but on the underlying policy issue is that we think the transition path that New Zealand is now undertaking for the very first time has many many risks associated with it. Therefore we think a much more prudential approach is utterly warranted. We see essentially when we step back from the technical substance of this paper to look at what it is actually trying to achieve that there are two separate questions here. The first is whether we need to have policy frameworks such as provided for in this bill which establish a response to the question: are anthropogenic greenhouse gases a serious problem that the international community needs to address? That is one question. The other question is: what is the right balanced policy response? People try to put those two together but they are actually quite separate. 
I believe that it is very clear the consensus has grown not just in this country but internationally on the first question—that we need to take this seriously and that we need frameworks such as this bill to deal with the problem. We can see that with the change in the Australian Government the Australians have come on board with ratification. The two United States presidential candidates are making very promising statements that the United States will also come on board so the consensus is growing. Of course the big question about developing countries is still before us. So that is that side of the question. On the policy response side of the question this bill is addressing again we can see a consensus emerging that we have to put a price on carbon and that it is probably better to do that via a trading system. The consensus has grown within New Zealand and I think it is clear that the consensus is growing internationally. 
But this is very much a work in progress. I will guarantee that a future Parliament will have to come back to this to make changes in the light of practical experience and most important in terms of international negotiations yet to occur. Given the hour I will stop at this point but I think it is very important that people understand that this is an issue of immense complexity and that the deeply difficult transition issues in moving towards a decarbonised economy will take decades to address. Although I think we have the framework for a reasonable trading regime that will eventually establish an international market in emissions units we must be prepared to revisit this issue in due course. 
Bill read a first time.  
Bill referred to the Commerce Committee.