Groser Tim: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Groser Tim: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — First Reading 
[Sitting date: 23 August 2012. Volume:683;Page:4723. Text is incorporated into the Bound Volume.] 
Hon TIM GROSER (Minister for Climate Change Issues) 
: 
 I move  
That the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill be now read a first time. 
 I nominate the Finance and Expenditure Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 17 October 2012 and that the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House—[ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! Would members leaving the Chamber please show some courtesy to the member trying to address the business of the House. 
Hon TIM GROSER 
: —thank you Mr Speaker—and to meet outside the Wellington region during a sitting of the House despite Standing Orders 188 190 and 191(1)(b) and (c). 
The Climate Change Response (Emissions Trading and Other Matters) Amendment Bill includes major amendments to the New Zealand emissions trading scheme that the Government intends to make in response to the recommendations of the New Zealand Emissions Trading Scheme Review Panel in 2011 as well as international developments and a number of technical and minor amendments that aim to improve the operational effectiveness of the emissions trading scheme. Although the Government has chosen not to implement all of the recommendations of the review panel I do want to acknowledge the considerable work of the panel in framing the issues in a way that has helped the Government address the issues in question. 
This bill will ensure that the emissions trading scheme effectively supports the Government’s economic growth priorities by keeping carbon costs at a level that is appropriate in the light of the current economic climate and other countries’ climate change actions. The amendments will mitigate the short-term costs for businesses and households and will ensure that the emissions trading scheme is flexible enough to cater for a range of future international scenarios. 
Let me briefly examine and outline the major changes to the bill. Existing transitional measures reducing the impact of the emissions trading scheme on households and businesses will be extended beyond 2012 without an end date subject to a review in 2015. This will facilitate New Zealand’s ongoing economic recovery by ensuring that there will not be significant increases to emissions trading scheme - related costs for businesses and households until at least 2015. 
The entry date for surrender obligations for biological emissions for agriculture will be deferred and will not be specified in primary legislation. The Government’s current intention is to re-examine in 2015 the entry date for surrender obligations for biological emissions from agriculture and the continuation of the transition phase. 
The bill introduces offsetting for pre-1990 forestry in the emissions trading scheme. This will give owners of pre-1990 forest land more flexibility. This bill also introduces a power to allow auctioning within an overall cap on the supply of New Zealand Units—NZUs. Auctioning will mitigate the risk that New Zealand businesses would buy too many international units and will give emissions trading scheme participants more certainty about supply of units in the scheme. 
This bill makes a number of technical changes so that the scheme is more workable and flexible. For example it improves the current treatment of the synthetic greenhouse gases sector in the emissions trading scheme. Equally it removes deforestation liabilities where forest land cannot be re-established because a natural event prevents it. Some of these technical changes will also address issues arising from the interaction between the emissions trading scheme multiple-owned Maori land and the Te Ture Whenua Maori Act 1993. 
Because of the complex nature of the emissions trading scheme a couple of technical issues have arisen subsequent to consultations which we believe do merit further consideration at the Finance and Expenditure Committee. The first relates to the very detailed and complex offsetting rules around pre-1990 forestry. The second relates to the Crown’s ability to manage its Kyoto Protocol obligation for the first commitment period. Further amendments to the Climate Change Response Act may be necessary to ensure that the Act can be certain to meet its first commitment period obligation in an efficient and effective manner by setting aside emission units required for that obligation now. If the committee considers that these issues do need to be addressed then it may wish to make recommendations on the bill. 
In conclusion this bill will keep carbon costs in New Zealand at a level similar to the current level which is appropriate in terms of the current economic climate and international progress. It will make sure that our businesses remain internationally competitive and that households are not weighed down by rising costs. I commend this bill to the House.