Shaw JamesHon JAMES SHAW (Minister for Climate Change): That may be because the member David Bennett is not a lawyer. It may not surprise the member to learn that I am not going to take that out of the bill. The reason why that provision is there—Hon Member: He's got confidence you'll be here in two years' time anyway.Hon JAMES SHAW: I would like to reassure the member that actually his nightmare scenario that he's painting of me—who clearly according to his projections will still be the climate change Minister in two years' time and I thank him for his confidence—that I will be able to at a whim simply override and bring them into the emissions trading scheme (ETS) at the process level regardless of anything. Actually if he reads the bill what he'll see is that the Minister cannot do that. It's actually outlined that there is a process by which the Climate Change Commission monitors progress. The Climate Change Commission then makes recommendations to the Government and then the Government must respond within a period of time. So the Government cannot on a whim do anything actually. The Government can only respond to the advice that it is given and it cannot act without the advice of the commission.Second of all what the member is suggesting is a voluntary agreement. Whilst the zero carbon bill was going through the House and before we had a Climate Change Commission we set up something called the Interim Climate Change Committee which had a number of people on it who had had some experience over the last 30 years with agricultural greenhouse gas research and various attempts over the course of the last three decades to make progress on this issue. There have been voluntary agreements between Governments and the sector before which haven't resulted in anything. We also got advice from the United Kingdom because they also have a voluntary agreement in the United Kingdom. The advice is they said it's not going anywhere. So it's an issue of incentives.I also just want to correct the member on something. He suggested that we came to an agreement and then introduced this provision. This provision is part of the agreement. It was negotiated between us and the sector at the time. When we stood up in the Legislative Council Chamber and we launched the partnership with the agricultural sector we did so on the basis that this was the provision.Now I understand it wasn't comfortable but it also wasn't comfortable for those who would like to see agriculture introduced into the emissions trading scheme immediately. Remember Mr Bennett that it is the only sector of the economy that is not currently covered so they have preferential treatment at the moment because other sectors are included in the emissions trading scheme.Hon David Bennett: So—Hon JAMES SHAW: Just let me finish. This is part of the agreement. There were safeguards that were built into it. We heard the concerns of the sector at the time. We also heard the concerns of—CHAIRPERSON (Hon Ruth Dyson): I'm sorry to interrupt the member but the time has come for the House to adjourn for the dinner break.Sitting suspended from 6 p.m. to 7.30 p.m.Hon JAMES SHAW: Thank you Madam Chair. I'll be brief. I understand from memory that the question that I was asked was about the ability of the climate change Minister to simply call in the agricultural emissions work programme and dump them into the ETS. I was just reassuring the member that that is actually not possible in the legislation that there is a process that has to be gone through and that there is essentially an independent audit which leads to advice which the Minister can then respond to. That would be consistent with the principle that his colleague Scott Simpson was talking about: the principle of ministerial oversight. But we do want to make sure that the Ministers cannot act by themselves. So there is that.The other thing that I think I was just starting to talk about was how the experience in New Zealand and overseas of voluntary agreements hasn't yielded results over the course of the last 20 years or so. The advice that we received from the Interim Climate Change Committee was that we needed another mechanism.I just wanted to talk a wee bit about how the incentives are set up. So in a purely voluntary agreement you can imagine that the incentive—not through any malicious intent—is to go slowly right? If you're on to a winning wicket why would you want to change? In a voluntary agreement there's no particular reason to achieve any particular outcome by any time right? You can just continue doing R & D and so on because there is no point where you need to actually change behaviour right or to change any systems. What we've set up here is a system which says there will be a pricing mechanism from 2025 and the sector will design that—obviously in partnership with Government. But the intention is to say that if they don't come up with that then it will become part of the emissions trading scheme via the processes which is the least-best outcome right because of how the sectors work. But that creates a deadline that says actually the incentive then flips on its head and the incentive is to get that work done as fast as possible rather than to defer it which has been the experience both in New Zealand and overseas. That was simply why that mechanism is there. It's not to do with a lack of trust at all; it's just really to make sure that we've got the incentives aligned to get through that work programme. Like I said that is part of the agreement that we have with the sector. So whilst some of them might not have been—you know they might have been a bit grumpy about the design of it—ultimately they said Look if that's the quid pro quo for us to be empowered to actually do the work and to demonstrate that we can do it let's go for it." So I'm pretty happy with where that got to and frankly given the fraught nature of the negotiations and what it took to get to that point I wouldn't want to unpick it at this time. I think that that would create yet more uncertainty."