Brash Don: Urgent Debates — Greenhouse Gas Emissions—Release of Report 
Brash Don: Urgent Debates — Greenhouse Gas Emissions—Release of Report 
[Volume:627;Page:21758] 
Dr DON BRASH (Leader of the Opposition) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. We have become accustomed to Labour’s incompetence: 111 emergency calls the National Certificate of Educational Achievement Te Wananga o Aotearoa the Immigration Service the huge waste in the tertiary education system hip-hop tours the failure to accelerate road building and the “chewing gum Budget”. But nothing compares with the monumental scandal that is Labour’s ratification of the Kyoto Protocol. 
In the 2002 election campaign National argued against New Zealand being the only country in the Southern Hemisphere to ratify the Kyoto Protocol. After the election Labour pressed on intent on being the most virtuous of all the countries in the Southern Hemisphere despite the fact that Australia refused to ratify the United States refused to ratify and the big emitters of Asia India and China were not obliged to make any reductions in their emissions. Of course we should ratify Labour argued as our contribution to dealing with the serious problem of global warming and by the way not to ratify would be like “setting fire to a very big cheque”. That was because the Government had calculated that we would have a net credit position of 55 million tonnes of carbon which could be sold on the international market and was worth $825 million at the Government’s price of $15 a tonne or $2.1 billion at the current international price of $38 a tonne. It was easy to be virtuous with a prospect of a pay-off of between $800 million and $1.2 billion. 
But there were always doubts. Early last year Alex Sundakov of the consultancy firm Castalia Strategic Advisers concluded that the Government’s figures were wildly optimistic. It had assumed that emissions from the agricultural sector would grow over the next 10 years at a fraction of the rate at which they had grown over the decade since 1990 but he could find no justification for that assumption. It had assumed that total energy emissions would actually decline from current levels over the next decade but he could find no justification for that assumption. It had assumed that new plantings of Kyoto Protocol forests would continue at 30000 hectares per annum but he argued that new plantings were likely to be well below the assumed 30000 hectares per annum. It had assumed that non - Kyoto Protocol forests planted before 1990 would be replanted in their entirety as they were harvested but he argued that a significant and growing proportion of non - Kyoto Protocol forests would not be replanted once harvested. Taking those factors into account he concluded early last year that there would not be a credit balance of 55 million tonnes but a debit balance of 7 million tonnes and that was just in the first commitment period between 2008 and 2012. 
Of course Pete Hodgson rubbished Dr Sundakov at that time. He stated that Castalia Strategic Advisers’ reports were “undermined by a combination of methodology errors and forecasting assumptions at the bottom end of credibility”. He went on to say that any liability under the Kyoto Protocol was “unproven and unlikely”. He also trumpeted the fact that New Zealand “will be one of very few seller nations in the first Kyoto commitment period.” Now we know that far from being pessimistic Dr Sundakov was too optimistic. Now we know that the Government itself estimates that the position is not a credit balance of 55 million tonnes and not even a debit balance of 7 million tonnes but a debit balance of 36 million tonnes. Instead of a financial asset worth between $825 million and $1.2 billion we face a financial liability of between $540 million at the Government’s price of carbon and $1.4 billion at the current international price of carbon. So we are somewhere between $1.4 billion and $3.5 billion worse off than when Labour blithely ratified the Kyoto Protocol late in 2002. 
Of course the bill could be much higher if the international price of carbon escalates above $38 a tonne and it will certainly be very much higher if New Zealand stays in the Kyoto Protocol during the second and subsequent commitment periods. Everybody knows that the first commitment period was to be just a softening-up period to get everybody suckered in before being hit with the very substantial reductions in emissions that would be required to make any appreciable difference to global warming. 
This is a Government that offers large numbers of hard-working New Zealanders tax relief of just 67c a week in 3 years’ time but squanders money in a profligate and wasteful way on hip-hop tours more bureaucrats dodgy tertiary courses of the Twilight Golf variety and now the granddaddy of them all an enormous bill as the price of its determination to have New Zealand the only country in the Southern Hemisphere signed up to the Kyoto Protocol. And make no mistake the Government intends to pay that price. Pete Hodgson confirmed last week that he would be buying carbon credits on the international market to cover our projected deficit—probably paying hundreds of millions of dollars to Russia and the Ukraine to make Helen Clark and her Ministers feel good. 
The Labour Government has been guilty of gross deception. It has been guilty of gross deception in more than one way. Not only did it try to tell us that there was a gain to be had in being virtuous on the basis of assumptions that now look wildly implausible; it even tried to hide the facts from the New Zealand public after admitting the truth to the United Nations on 15 April. It told the international community but did not tell the New Zealand public. There was only a fleeting mention of the enormous contingent liability facing the taxpayer in Michael Cullen’s Budget last month. Ten pages into the section on contingent liabilities there was a small note explaining that estimates of New Zealand’s likely position during the first commitment period were not sufficiently robust to warrant formal recognition in the Crown accounts. The Budget listed a whole range of individually minor contingent liabilities but failed to put any number on the little matter of the liability for our projected carbon deficit of $540 million or $1.4 billion or even more. 
To justify participation in the Kyoto Protocol we need to be convinced of three things all of which are highly contentious. First we need to be persuaded that global warming is actually taking place. 
Hon Dr Michael Cullen 
: Oh really! 
Dr DON BRASH 
: I tell Dr Cullen that there is some debate about that in the scientific community. Second we need to be convinced that even if global warming is taking place that warming is being caused by human activity and specifically increasing emissions of carbon dioxide and other greenhouse gases. There is some debate about that in the scientific community. Third to justify participation in the Kyoto Protocol we need to be convinced not only that global warming is taking place and that that warming is caused by greenhouse gases but also that doing something to reduce emissions at enormous cost is in some sense commensurate with the potential gain. That too is hotly contested. Bjorn Lomborg the famous Danish environmentalist does believe the world’s climate is warming and does believe that it is being driven in large part by the emission of greenhouse gases. But he regards the enormous costs of reducing greenhouse gas emissions as wildly disproportionate to the potential benefit in terms of a slightly cooler global climate. Even the UN Intergovernmental Panel on Climate Change which has been the main driver of the Kyoto Protocol has calculated that if the Kyoto Protocol was fully implemented it would slow the expected rate at which the Earth’s temperature increased by 6 years. 
Brian Connell 
: How much? 
Dr DON BRASH 
: By 6 years. Instead of a global temperature rise of 2.1 degrees Celsius occurring by 2094 it will be postponed to 2100. That is not much of a benefit relative to the estimated cost of implementing the Kyoto Protocol of US$1 trillion or NZ$1.4 trillion. 
Labour has signed New Zealand up to a very bad deal. It was so intent on impressing its socialist friends in Europe that it forgot the enormous cost to New Zealand taxpayers. It convinced us all that we could be virtuous and get more rich by producing a set of assumptions that even at the time looked wildly optimistic and now have been shown to be so. Labour has been shown to be totally incompetent unwilling to listen to advice that it did not want to hear and guilty of being grossly deceptive in failing to include that potentially enormous liability in the Budget last month—a month after the size of the potential liability had been advised to the United Nations. 
The National Party cares deeply about the environment. We value clean air and we value clean water. We value New Zealand’s wide open spaces and want to keep them in a condition such that our children and our grandchildren can enjoy them. Before the election we will be announcing our policy to protect and enhance our environment. But the Kyoto Protocol is an incredibly expensive way to try to reduce global warming by a very small amount in 100 years’ time. Before last Thursday’s shock announcement National was committed to scrapping Labour’s carbon tax—a tax that is calculated to add $4 a week or $208 a year to the costs facing every New Zealand household. We were also committed to withdrawing from the Kyoto Protocol from the commencement of the second commitment period starting in 2013 unless all other significant countries were engaged in meaningful programmes to reduce greenhouse gas emissions. 
In the light of the enormous cost to New Zealand even during the first commitment period the scientific uncertainties about global warming and the relationship between possible warming and greenhouse gases the totally disproportionate cost of reducing greenhouse gas emissions and the fact that most of our major trading partners have not taken on any obligation to reduce greenhouse gases the Government should undertake an immediate formal review of our continued participation in the Kyoto Protocol. That should include an independent assessment of New Zealand’s likely carbon balance in the 2008-12 period the viability of a major programme of forest planting on New Zealand’s eroding hill country to increase our carbon credits and the risks to New Zealand of exporting jobs to other non - Kyoto Protocol countries in the Asia-Pacific region. I can assure the country today that it will not find a National Government spending hundreds of millions of dollars—potentially billions of dollars—buying carbon credits from either Russia or the Ukraine. 
Madam DEPUTY SPEAKER 
: I call the Hon Michael Cullen— 
Hon Dr Nick Smith 
: Here’s a guilty man.