Clark David: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — In Committee Speaker Recalled In Committee 
Text is incorporated into the Bound Volume 
Clark David: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — In Committee Speaker Recalled In Committee 
[Sitting date: 06 November 2012. Volume:685;Page:6306. Text is incorporated into the Bound Volume.] 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Mr McClay has certainly enhanced his reputation with that speech. Well he has enhanced his reputation for not letting the facts get in the way of a good story. We know that that member oversaw the select committee process for the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. He has reminded us of that fact and he has tried to suggest to this Committee that it was a generous process it was a process where all submitters were heard and where due consideration was taken. Well nothing could be further from the truth. In the interests of gutting the forestry sector in his own electorate in what one might consider an ill-conceived attempt to make his own seat a marginal one Mr McClay has pushed ahead with this legislation without the full process that we would normally expect around this kind of major legislation with implications for New Zealand’s international reputation. 
National rushed this bill through the House to meet its December deadline of the transitional period ending. It said that its reason for doing this was that there had already been a significant review but the great irony there is that the Finance and Expenditure Committee did not listen to or did not take heed of the recommendations of that review. Indeed in the select committee process as it was provided there was not adequate time for full submissions. Many submitters said there was not adequate time for full submissions due to the short period of time allocated for this process. Instead of the usual 4 to 6 months that we would expect for a piece of legislation of this nature to be going through the select committee process the bill received just 7 weeks. 
Charles Chauvel 
: How long? 
Dr DAVID CLARK 
: Seven weeks—7 weeks. It was basically a rubber-stamping exercise. This piece of legislation was rushed through the select committee process. 
Hon Trevor Mallard 
: $1.3 billion a year. 
Dr DAVID CLARK 
: That is why—yes $1.3 billion a year it costs to run this and— 
Hon Trevor Mallard 
: So how much a week was the select committee then? Nearly $200 million a week. 
Dr DAVID CLARK 
: It is $200 million a week Mr Mallard says for select committee time to rush a process like this through. A mockery—a rubber-stamping exercise. It is not adequate. And what we see as a result of course is $328 million more in cost to the taxpayer. Industries that are doing good things are up for the chop with jobs going in the forestry sector in Mr McClay’s own electorate as a result of these changes and those who are doing things that are the old way of doing things are advantaged. Those who are not willing to make the transition to adopt new technologies that are climate friendly are rewarded and those who are actually making that change are punished for the additional costs of stepping up to make the change to gear up for the economy of the future. This is shameful. 
As I said the Government justified this short select committee process on the basis that it was preceded by an extended period of ministerial consultation with key stakeholders. The interesting point to note around that is that the key stakeholders did not include the environmental sector. A piece of environmental legislation and key stakeholders did not include the environmental sector—that is what the National Party calls balance. 
This piece of legislation—let us remind ourselves why it is here. The Supplementary Order Paper in the name of Moana Mackey which proposes that we allow for New Zealand Units to have a more prominent role places an obligation on participants surrendering credits for a minimum of 50 percent of those units to be New Zealand Units. That is the aim of Supplementary Order Paper 142 in Moana Mackey’s name. This would make sure that the price which is artificially low at the moment because of uncertainty around future agreements and because of the global financial crisis is kept at a reasonable level so that those who are in the space of making positive contributions to our climate are supported through the transition period to a fuller carbon price. 
That Supplementary Order Paper needs to be put in the context of the Kyoto Protocol and New Zealand’s wider obligations. We know that the Kyoto Protocol was set up because New Zealand wanted to be a part of the solution. The protocol— 
Charles Chauvel 
: The “Coyote Protocol”. 
Dr DAVID CLARK 
: Sorry? 
Charles Chauvel 
: “Coyote Protocol”. 
Dr DAVID CLARK 
: “Coyote Protocol”. My pronunciation is corrected—thank you Mr Chauvel—in line with a previous contribution. We know that this protocol aims to ensure that the world addresses climate change as a whole. New Zealand is stepping forward to do its share or at least it was stepping forward when Jenny Shipley signed it in 1998 joining 191 countries and the European Community in signing that protocol with Helen Clark ratifying it. 
New Zealand has made it clear that it intended to do its bit and subsequently we saw all kinds of behaviours as people prepared for the scheme to be introduced. We saw forests felled faster than they normally would be as those with interests in converting to dairying got on with that business before the emissions trading scheme was introduced. And then sure enough when the scheme was introduced those activities dropped off and we saw New Zealand starting to begin on a path toward a more sustainable future. 
Since that time since National came to office we have seen backwards steps. We have seen of course under the global financial crisis the price of international emissions units drop—plummet exponentially. We know of the Russian hot air which makes for very very cheap units and we know the effect that that has had on the international carbon price. With the global financial crisis production has slowed in many industrialised countries. We know that that has meant that the carbon price is artificially low at the moment and that if we are going to do our bit we need to find ways of ensuring that that carbon price is more realistic and is in line with long-term expectations of what it will cost to address climate change. 
The science tells us that the probability of climate change being natural—i.e. not human induced—is less than 5 percent. There are still some who would doubt the science and who think it is all a conspiracy theory but the scientists—I am not a scientist but as a policy maker I am inclined to believe the scientists because there seems to be a strong consensus around the issue—say we should be taking steps now because it is cheaper to address these things now than to deal with the effects of runaway climate change later. 
When we signed up to the Kyoto Protocol New Zealand—under Jenny Shipley in 1998 and then subsequently under Helen Clark—had to then effect a mechanism to ensure that our obligations were met. There are basically three broad options for doing that. One is to have a carbon tax and we know that that did not succeed politically. Subsequently when the Business Roundtable proposed it of course we all smelt a rat. You know that when the Business Roundtable proposes a tax there is something a little bit fishy going on. But what was sustained and supported by the Green Party and introduced by the Labour Party was an emissions trading scheme. That was better in the long run than having taxpayers subsidise polluters. Rather than taxpayers encouraging polluting activity for ever there would be a scheme that ensured that we started to attribute the actual costs of pollution in our country the costs that New Zealand incurs under the Kyoto Protocol back to those who were generating them so that their behaviour would change. A price incentive would encourage behaviour to change so that those who were employing newer cleaner greener high tech mechanisms and business solutions would succeed and those who were not willing to change would face challenges and be forced to change their behaviour and make future investment decisions that were smart and in New Zealand’s long-term interests. That is why the scheme was introduced. 
But what we have seen from this Government as those international market prices have gone into freefall is a general acceptance of that hot air of the limited change it brings and of the way in which it slows down the transformation of our economy to one that is ready to tackle climate change and ready to lead the way in terms of research and development and in terms of introducing new technologies that are better for the planet and to actually generate a better return for New Zealand. This is I suppose at least consistent with a Government that is not in any hurry it seems to get our economy back on track. It has got the worst economic record of any Government in the last 50 years. We see that it is not willing to step in and make the big choices to actually help us to transition to a low carbon economy. In fact it is extending subsidies for the foreseeable future. 
Moana Mackey’s Supplementary Order Paper 142 allows for New Zealand credits to have a significant standing in the market. It places obligations on participants to surrender credits for a minimum of 50 percent of their emissions units—