Graham Kennedy: Budget Measures (Miscellaneous Fiscal Matters) Bill — First Reading Second Reading In CommitteeText is incorporated into the Bound VolumeGraham Kennedy: Budget Measures (Miscellaneous Fiscal Matters) Bill — First Reading Second Reading In Committee[Sitting date: 15 May 2014. Volume:698;Page:18052. Text is incorporated into the Bound Volume.]Dr KENNEDY GRAHAM (Green): Thank you Mr Chair. I am grateful that you allowed me to take the next call because it follows immediately on from what the previous speaker Moana Mackey was saying which was about the iniquity of discriminating against a particular subsector of New Zealand’s economy the post-1989 foresters and in the broader context the sheer inadequacy of this Government’s climate policy. I think to pick up on her point we could call this Government the 0.4 percent Government. What does that mean? It means that as I said in the second reading this Government’s policies will result in our emissions projections which if they were emulated by every other country in the world would result in something like a 5 to 6 degrees Celsius increase.During the second reading I asked a number of questions. Because of the truncated democratic process it was necessary to speak on behalf of the New Zealand people who will not have an opportunity to have input into the passage of the Budget Measures (Miscellaneous Fiscal Matters) Bill. We simply wish to ask questions. There were five questions that I asked the Hon Amy Adams who was in the Chamber at the time. I know she took careful consideration of those five questions. She will presumably have passed those on with the suggested answers on behalf of the Government to Minister Foss who will be able to get up having answered Moana Mackey’s questions and answer the five questions that I lodged as well.Just in case his colleague Minister Adams omitted to convey them to him the first one was whether they think climate change is just another economic problem or is it a qualitatively new unprecedented threat to human society? The United Nations says that to stay within the 2-degree temperature rise and 450 parts per million volume of carbon atmospheric concentration—which Cabinet has signed off on—developed countries have to stay below 1990 levels within a 25 to 40 percent range of reductions by 2020. The second question was why does the Government then respond that not every developed country has to stay within that range when that range is very clearly calculated to account for every different national circumstance of those countries? Question No. 3 was did he think that New Zealand was doing a fair share when global projections are on course for a 2.6 to 4 degree temperature increase whereas New Zealand’s projections as I said earlier are on course if emulated elsewhere to 5 to 6 degrees?The fourth question—and Minister Foss can answer this one effortlessly because he knows about these issues—is what is the global least cost of carbon in mid-May 2014 is it sufficient to begin the challenging task of bringing down global emissions and is it the right criterion to bring to bear on New Zealand’s climate policy when we are trying to bring our own national emissions down? The fifth question which both Moana Mackey and I have touched on is why discriminate among subsectors when you profess equity in your climate policy inter-sectorally in New Zealand? Those five questions are now lodged with Minister Adams and Minister Foss and we will look forward to those answers so that the democratic passage of this bill can be honoured as we go through the course of the next 60 minutes.I am also encouraged by my colleague Moana Mackey’s creativity in terms of responding to Part 2 of the bill with an amendment. I have just put forward an amendment in the last few minutes as well. It comes from the bill titled Climate Change Response (National Emissions Reduction) Amendment Bill which is in the ballot and has been in the ballot for 2 years. The reason “National Emissions Reduction” is in the title of the bill is that it is necessary to highlight the fact that the Climate Change Response Act does not specify emissions reductions as the primary goal—certainly not in the title. The title is about trading not about emissions reduction so the important thing was to have an amendment to the Climate Change Response Act that has in its title “National Emissions Reduction” to emphasise the point that we are not in the business of trading carbon; we are in the business of reducing it. That is the critical thing. That is the distinguishing thing between this Government and the Opposition.So within that bill there were a number of purposes stated—there were about six—and they were very briefly: introduce a carbon floor price and terminate the price cap; phase out the one-for-two surrender obligation; terminate the issuance of free allocations to participants; restrict international units that can be traded and surrendered in New Zealand; introduce agriculture into the scheme; and put an obligation on the Minister to prohibit the entry of any international carbon credit. The further measure in the bill was an obligation on the Minister to prohibit the entry of any international carbon credits that may in his or her judgment depress the price in New Zealand below the carbon floor price.Updating that to put it into an amendment in response to the particular nature of this piece of legislation before us Part 2 of this bill my proposed amendment is headed as addressing the Budget Measures (Miscellaneous Fiscal Matters) Bill. The proposed amendment would be a new clause 8A which would alter the Climate Change Response Act to insert new section 222I which would have the Minister regulate trading and international carbon credits. It would simply say: “The Minister must by notice in theGazette prohibit the entry into New Zealand of any international carbon credits that he or she considers may depress the price of carbon credits below the level required to commence a reduction in gross emissions.” That is designed explicitly to ensure that the status of New Zealand Units in the domestic currency and their relationship to any international foreign carbon credits is such that if the latter are going to depress the price of the former down below whatever level—in the judgment of the Minister and the Government—is required to begin the process of curbing our emissions growth and introducing omissions reductions then those units are not allowed in. They are prohibited.That is a response to the necessary but minor component of Part 2 which is to halt arbitrage on the part of post-1989 foresters. This goes considerably further. Halting arbitrage on the post-1989 foresters will halt arbitrage on the subsector. It will not in itself bring down New Zealand’s emissions level. It will not curb the growth in NewZealand’s emissions. This amendment will meet the challenge of bringing down New Zealand’s emissions and I commend the amendment to the Committee.