Shaw James: Climate Change Response (Removal of Transitional Measure) Amendment Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeShaw James: Climate Change Response (Removal of Transitional Measure) Amendment Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 26 May 2016. Volume:714;Page:11396. Text is incorporated into the Bound Volume.]JAMES SHAW (Co-Leader—Green): I want to respond to a few points of the Minister Paula Bennett’s just then. She said that only a few countries have an emissions trading scheme. This is correct but one of them is China which—as we all know—is a pretty big market and should be able to sustain any kind of interaction with it that we want. There are more countries that have got carbon taxes in place than have emissions trading schemes in place and one of the things that we have argued for some time is that a straightforward carbon tax where you recycle all of the revenue in the form of tax cuts to people and to businesses would actually be a far more transparent and predictable model. It does not necessarily exclude countries from working cross-border with each other to try to work out ways to reduce their emissions.There is a growing number of countries that have either carbon taxes or emissions trading schemes in place. This is moving at extreme speed so if we wanted to introduce this we would ask why we have to take 3 years to do this because in 3 years’ time the world will be a much much more different place than it is now in reference to these kinds of mechanisms. I mean it is a very different place now than it was 3 years ago—3 years ago China did not have an emissions trading scheme or any carbon taxes in place and it does now.I also want to just mention in reference to the question about a floor price that yes the advice is that it is unlikely to drop below where it is now. If that is the case why not put a floor price in place to be sure and to absolutely secure it—to remove that likelihood completely? You would only not put one in place if you felt that actually there was a chance it would drop below the current price. Of course the current price—I think it is trading at about $14—is not yet enough for farmers foresters and other businesses to be making investment decisions about putting their money into lower-carbon and therefore cheaper forms of industry so the price has to rise if it is going to have any real effect. I cannot remember the study but there was one in the last 6 months that said that the price would need to be about $50 a tonne before people started really making major choices about where they directed their investment in the economy. I just want to note again that France last week put in place a NZ$50-a-tonne price for 2017 which is just next year. They are moving very very quickly so it is disappointing that we are not.I do accept the difficulty of trade-exposed industries and of course New Zealand Steel is a really obvious one. It is a major employer in South Auckland. It has got 1000 people working there and I think an extended community running into several thousands of people and it is in very difficult times with or without a price on carbon. But one of the options that the Minister could explore is to remove the subsidy and bring trade-exposed industries into the emissions trading scheme and then put a border adjustment in place so that imported steel—in this case—was subject to the same carbon price as domestically produced steel and that would mean that they could compete on an even basis. It would mean that the consumer of that steel actually has to carry that price and the consumer is therefore making decisions about whether they can get more efficient with their use of steel or could they be looking at other lower-carbon goods for example laminated wood beams which are as good as steel in some circumstances.So we would argue that there are ways of managing those kinds of considerations which would actually move us in the direction of a lower-carbon economy whereas continuing to leave those sectors out of the emissions trading scheme and continuing that subsidy actually continues to fuel growth in emissions and it does not move those industries towards actually doing anything to reduce their emissions.