Smith Nick: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — Second Reading In Committee Third Reading 
Smith Nick: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — Second Reading In Committee Third Reading 
[Volume:651;Page:847] 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 It amazed me that the member Pete Hodgson talked about shameful policy. I will begin my contribution on this biofuels bill by reciting for members opposite their actual record on climate change. When they came to Government in 1999 New Zealand’s emissions were 68 million tonnes of carbon dioxide equivalent. In 2000 that figure went up by 1.9 million tonnes. If we go a further few years forward we see that in 2003 that figure went up by 2.5 million tonnes. If we look in terms of the most recent data we see that the figure went up by 2.9 million tonnes. For all the talk of members opposite about carbon neutrality their climate change record was one not just of increasing emissions but also of an increasing rate of an increase in emissions. In fact during the previous Labour Government’s period in office of 9 years the rate of growth of greenhouse gas emissions was almost double what it had been in the preceding 9 years under a National administration. So when I hear a former climate change Minister like Pete Hodgson saying that we who have been in Government for not yet 5 weeks should be ashamed I say that he should reflect on his own record. 
This biofuels amendment bill does exactly what National went to the electorate on in the 2008 election and said we would do. We have a mandate for this change and I tell the House that it is appropriate we pass this bill under urgency because there is the real risk of a waste of public money being invested in infrastructure which will not apply if we get on and get the law straight in respect of biofuels. 
The first point that is critical in any debate around biofuels is whether it will do good. I could quote  
Time 
 magazine the United Nations the OECD and the world food organisation which this year have all expressed real concern that biofuels are doing more harm than good. 
Hon Pete Hodgson 
: What is the world food organisation? Where is its headquarters? 
Hon Dr NICK SMITH 
: Well the member opposite wants to quibble about what those organisations are. Let me go through them again. The United Nations Secretary-General has urged member countries not to impose mandatory requirements for biofuels. Our very own Parliamentary Commissioner for the Environment has said that a compulsory biofuels requirement will do harm to New Zealand’s clean and green reputation and members on this side of the House agree with that caution. 
I also want to pop the balloon that has been put forward that says that somehow the previous Government provided for a sustainability standard. It did no such thing. The select committee was asked to develop a sustainability standard and when the officials said that it was pretty difficult and that the European Community had been trying to do this for 5 years and it could not get there do members know what the Government members decided to do? 
Chris Auchinvole 
: What did they do? 
Hon Dr NICK SMITH 
: They said: “Let us kick it to the officials. Let us get the officials to sort it out. It is too hard.” and the officials came up with some highbrow principles. I say to this Parliament that it is so easy to have highbrow principles but what is needed is the pragmatic ability to have regulations that work. They do not exist and it is an indictment on the previous Government that it introduced a compulsion for biofuels without actually having a sustainability standard in place. It was one of those classic examples of putting the cart before the horse. 
Members opposite have said the problem is that some biofuel companies would like the compulsory requirement. I bet they would! I would love it if this Parliament were to pass a bill to compel people to use my particular product. I brew a drop of home brew and it is an excellent organic drop. I would love it if this Parliament were to pass a bill to deal to those big corporate beer companies and require them to include a blend of 0.5 percent of “Nick Smith’s Home Brew Beer”. I would love to see such a bill passed. I could justify it because my beer is particularly good and I think it should be better valued by Parliament. But does Parliament really think that such a law would be good law? It would be a nonsense. For members opposite to simply say that because some biofuel company would like a compulsion to buy its product and that that somehow is good law is a very pathetic advance. 
The real difference in approach around the issue of biofuels is this. The first thing is that this Government is open about the fact that this House of Representatives will not be the one that finds the answer to the challenge around climate change and new fuels. I honestly do not know whether the answer will be hydrogen vehicles electric vehicles biofuels or some other technology that has not yet been invented. I do say to this Parliament that when we try to pre-guess what that answer is we are pretending we have a level of knowledge that we do not have. We should not try to pick winners—like biofuels. 
I would love it if the next speaker explained why we would compel biofuels but not electric cars. I personally believe that electric cars will be a bigger part of the future than biofuels. I think that Parliament should say that we have a transition to make to new renewable technologies and that we need to provide a kick-start and some incentives for them. The answer is not to compel any one of those technologies but to provide a consistent financial incentive to move to them. The idea that Parliament could prescribe that the exact answer is for New Zealand to have 2.5 percent biofuels by 2012 in my view was quite ridiculous. The proposal from the Minister to look at an excise tax advantage that would then allow that to flow through does make a lot more sense. 
The second point I will deal with is the issue of cost. Officials have made a prediction but nobody knows the proper price. It depends on the sustainability standard but we do not know what it is yet. If the sustainability standard is very narrow and tight then the price will be quite high. If the sustainability standard is very loose and very open then the price will be quite inexpensive. But if we take a moderate view of it it is about 4c a litre. Each cent on a litre of gas costs $60 million so we are talking about a $240 million cost being put on to consumers for this biofuels incentive of a teeny-weeny little percentage. 
As the Minister responsible for Climate Change Issues I put it to this House that the biggest contribution New Zealand can make to this huge challenge of climate change is around the technology to reduce the methane from agricultural emissions. Do members know that we are spending just $4 million on research and technology to solve that problem? How many members in this House can put hand on heart and say that putting a cost of $240 million on to the economy for biofuels while we spend just $4 million on agricultural emissions from farm animals—the real elephant in the room around climate change—is a sensible programme? In my view it is completely disproportionate and out of order with what is logical. 
The last challenge I would have for members opposite is simply to go back to their record on climate change. Can any member opposite name for me a country that has had a larger increase in emissions than New Zealand has had over the last 9 years? Can they name any country—any? The reality is that the previous Government had the very worst record and the few countries that may have had a worse record most of us have never heard of. I think it is about time that members opposite made some apologies for their appalling record on climate change before they lecture this Government about its sensible programme.