Chauvel Charles: Climate Change Response (Emissions Trading Forestry Sector) Amendment Bill — Second Reading In Committee Third Reading 
Chauvel Charles: Climate Change Response (Emissions Trading Forestry Sector) Amendment Bill — Second Reading In Committee Third Reading 
[Volume:655;Page:4725] 
CHARLES CHAUVEL (Labour) 
: 
 As noted by the Minister for Climate Change Issues the Hon Dr Nick Smith the Climate Change Response (Emissions Trading Forestry Sector) Amendment Bill as reported back from the Emissions Trading Scheme Review Committee includes two changes recommended by the select committee. The first change is to new section 168(1)(ca) which is to be inserted in the Climate Change Response Act by clause 4 of the bill. This provision deals with the forestry sector. The committee has recommended that rather than having a final date for the deadline under that section to be set by Order in Council there ought to be a firm date set by legislation as to when the actions required under the clause should be taken. Those actions cannot be taken any later than that date. 
There is a similar amendment to new section 183(3)(a) which is to be substituted in the Act by clause 5(2) where the plan put in place in the original bill to allow a deadline to be set administratively is replaced by the firm deadline of 1 July 2010. This amendment is an appropriate exercise in parliamentary oversight. Rather than allowing these sorts of things to run on at the pleasure of the Minister Parliament is asserting its right to set a final deadline in the legislation. I think members of the select committee were unanimous in agreeing to that amendment so the bill has been reported back on that basis. 
As the Minister said the bill by agreement of the parties in the House will be advanced through its stages today to meet the deadline of 30 June. I will address a few comments on the Minister’s assertion that there are deadlines in the Climate Change Response Act that could not have been met in any event and that this bill would have been necessary no matter what had happened whether or not we were having an emissions trading review. Unfortunately I do not think that the facts bear out what the Minister has said. The industry’s reaction is quite telling. When those in the forestry sector were asked about this legislation last week they said they were not surprised by the delay because of the state in which climate change policy currently sits in New Zealand. However they were disappointed. The Forest Owners Association chief executive David Rhodes said: “The market depends on supply and demand and if we don’t have demand we don’t have a market and that follows on into forest investment.” That comment has been echoed by the forestry sector throughout the history of the emissions trading scheme. 
It is as well to remember that forestry as the Minister said was bound by this scheme right from the beginning. Yes we were the first country to bring forestry in but we have not done well by the foresters in this Parliament. That is why we have 8 million seedlings rotting in the ground. There may well be a halt to deforestation as the Minister has suggested but we need to look to whether that is as a result of the recession we are currently in rather than because of any benign effect of Government policy. The truth probably is that because of the uncertainty in the sector with the lack of incentives to plant and the lack of profitability—because there is no ability to trade carbon credits which the foresters all hold—there is no incentive for those foresters to be able to maximise the value of their plantings. 
We might have had an end to drastic deforestation. We always expected there would be a bit of deforestation before the coming into force of the emissions trading scheme legislation. Hopefully that is over but let us not suggest that that is anything to do with anything other than economic conditions. Let us not suggest that it is a legislative consequence or a consequence of the actions of Parliament. 
I will now say a word about the wider state of climate change policy. The Minister rightly says that we can probably look forward to further legislation in this area. I said on the introduction of this legislation that we were trying to assist the Government to get to a position where it could go to Copenhagen at the end of the year with an emissions trading scheme bill intact with proper targets in place not only for the longer term but for 2020 and with the ability to look forward with confidence to a scheme that would have integrity and would internally hold together well for the sectors to be included—all sectors and all gases. That is still the aim of members on this side of the House but we must avoid making excuses for not complying with the law. 
If officials had been told back in November when the Minister took office that they were to get on with the requirements of the law—because it is open-textured legislation; it is an Act that says the Minister and his officials are to get on and make rules for the various sectors that are bound by the legislation—I do not think we would be in the position we are in now; I think we would be in a position where departments would have been compliant with the law and the sectors would have been doing what they should have been doing under the legislation. But of course they have had this false sense of security—insecurity perhaps—about the reality of the forestry sector. They believed that because there was a review by the select committee somehow there would not be a requirement to comply with the law. This has been a top-down belief; it has come right down from the Minister’s office and through into the industry and of course it is wrong. When the legislation says that administrative action is required then administrative action has to be taken. It is a completely unnecessary exercise for this Parliament to now be stepping in and rescuing the Minister his Government and the departments involved let alone the forestry sector for non-compliance with the legislation. The legislation should have been complied with from day one. Had it been complied with we would not be spending time in Parliament applying this fix. 
The lesson that has to be taken from the situation we are in now is that we cannot let this happen to the further sectors that are to come under the legislation. We have the stationary energy and industrial processes sector due to come into the emissions trading scheme on 1 January next year. It is well known that no allocation plans are being put in place in that sector. No work is being done on the thresholds at which the members of those sectors are to come into the scheme and have units allocated to them. Those sectors have to plan their businesses on the basis that they will be bound by the law on 1 January next year because that is what the law says but continual statements by the Minister and others are leading them to believe that we are going to have to pass some sort of legislation to give them some comfort that that will not be the deadline. That puts industries in an impossible situation as submitters told the Emissions Trading Scheme Review Committee. They cannot plan their businesses on this basis they cannot make decisions about whether to build new generation plants and that is very serious for the country. 
We have been in situations of electricity shortage before we have planned assets in the pipeline in the generation sector and we want those assets to continue to be built so that we can keep the lights on. But in the climate that those in the industry are in at the moment they do not know whether they are going to be bound by the emissions trading scheme on 1 January or 1 July next year. The Minister cannot give them that certainty because there is not the political agreement that he thought there was. They are in a real bind. 
It is interesting that New Zealand Steel when it heard of today’s delay said that it was surprised to hear about it. It has been proceeding on the basis that the scheme would come into force on 1 January and although there is this uncertainty it is just getting on and doing the best it can. I know that members around the Chamber will reflect on the fact that although the ACT Party supposedly stands for certainty and private property its contribution to policy in this area is the Emissions Trading Scheme Review Committee which has destroyed property rights for the forestry sector and created huge uncertainty elsewhere. There is a huge irony there. But here we are: we are where we are and the legislation is what it is. We will do our best to get on and make a good job of it.