Ririnui Mita: Climate Change Response Amendment Bill — Second Reading 
Ririnui Mita: Climate Change Response Amendment Bill — Second Reading 
[Volume:634;Page:6116] 
Hon MITA RIRINUI (Minister of State) 
 on behalf of the 
Minister responsible for Climate Change Issues 
: I move  
That the Climate Change Response Amendment Bill be now read a second time 
. In doing so I would like to thank the Commerce Committee for its consideration of this bill as well as those who provided submissions and representations to the committee. 
The committee’s consideration resulted in a number of enhancements to the existing provisions of the bill. The bill deals with two issues in particular. Firstly it amends the Climate Change Response Act 2002 to refine the functions of the New Zealand Emissions Unit Registry in respect of greenhouse gases. New Zealand is required to develop and maintain a registry to ensure the accurate accounting of emissions units. Emissions units are defined as the various types of units specified under the Kyoto Protocol. The principal Act allows for only the Crown to hold accounts in the registry and therefore to hold emissions units. The bill allows individuals to hold accounts in the registry and to trade in emissions units. 
So at one level the bill advances mechanisms that will be able to be used in many sectors in the future. For example the National Party recently said that it is in favour of a “cap and trade” scheme for the electricity generation sector which would cap the volume of allowable greenhouse gas emissions in the electricity generation sector and require generators to purchase emissions units for increases in emissions. The first part of the bill sets out some of the mechanisms to achieve that. 
The select committee made amendments to clauses 5 and 13 and also to clause 23 in order to better protect the property rights and interests of unit and account holders. The committee has amended the bill by providing more specific criteria and circumstances—in which the powers of the Minister of Finance may be exercised to direct units to be transferred—under which the Ministers responsible for the registry may provide a direction to the registrar to close a holding account. The committee has amended clause 23 which limits the bar to bringing an action against the Crown or the registrar to cases where an inaccuracy in the unit register has arisen by adding that this bar applies only to situations where the Crown has reasonably relied on external information providers. The Government supports these amendments because they provide better transparency and specificity in order to better protect the rights of unit and account holders. 
Secondly the bill enables the establishment of the Permanent Forest Sink Initiative. Part 2 relates to the development of a mechanism that will allow landowners to access the value of carbon sequestration on land through the establishment of forest sink covenants. This Permanent Forest Sink Initiative provides a business and land-management opportunity which will be created by New Zealand in this climate change policy. The bill will facilitate the initiative which has the potential to attract many millions of dollars of investment into the New Zealand economy. It will enable landowners to make better economic and environmental use of their land particularly isolated and erosion-prone land that is currently marginal for uses such as agriculture and conventional production forestry. A significant part of that land is owned by Maori who stand to gain from the passage of this legislation which is why the Maori Party supported the first reading of the bill. The Permanent Forest Sink Initiative provides a world-leading opportunity for landowners to establish forests and obtain Kyoto-compliant carbon credits. There is a further incentive by which afforestation owners will be able to harvest a portion of timber from their forests. 
The Permanent Forest Sink Initiative will operate through contracts registered against land titles that specify the rights and obligations of the Crown and landowners. Not only does the Permanent Forest Sink Initiative provide economic and environmental opportunities for landowners but it also provides opportunity for domestic and international firms to better manage their greenhouse gas emissions by establishing new forests. Many dividends will flow to New Zealand as a result. Landowners will be able to reap better economic returns through a diversified income stream. From a climate change perspective new forests planted under the Permanent Forest Sink Initiative are likely also to replace stock numbers on marginal land thereby reducing some greenhouse gas emissions from the agriculture sector. 
The Permanent Forest Sink Initiative will also facilitate improved flood protection and catchment management especially in areas where climate change might lead to increased impacts from extreme weather events. It will also aid in the protection of biodiversity and enhance the quality of our rivers and streams. 
I support the committee’s recommended amendments to address the issues raised at the select committee because they clarify the intent of the bill. They also clarify the relationship between the Resource Management Act the existing provisions in the Forests Act and the amendments to the Forests Act. The legislation allows for the possibility of the Permanent Forest Sink Initiative to operate on Crown land. The Government intends to move amendments through a Supplementary Order Paper during the Committee of the whole House. Those amendments will address a number of issues including those raised by the Legislation Advisory Committee. 
I wish to thank again the members of the select committee for their work on this bill and also those who made submissions to the select committee. I commend the Climate Change Response Amendment Bill to the House.