Bridges Simon: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Bridges Simon: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill — Second Reading 
[Sitting date: 25 October 2012. Volume:685;Page:6217. Text is incorporated into the Bound Volume.] 
Hon SIMON BRIDGES (Acting Minister for Climate Change Issues) 
: 
 I move  
That the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill be now read a second time 
. The bill includes major amendments to the New Zealand emissions trading scheme that the Government intends to make in response to the recommendations of the New Zealand Emissions Trading Scheme Review Panel in 2011 as well as international developments and includes a number of technical and minor amendments that will improve the operational effectiveness of the emissions trading scheme. The bill was referred to the Finance and Expenditure Committee on 23 August 2012. The committee received 758 written submissions from interested groups and individuals and heard from 73 submitters who indicated that they wished to appear before the committee in person. I would like to take the opportunity to thank the chair Todd McClay and members of the Finance and Expenditure Committee for their work in considering this piece of legislation. My thanks go also to the submitters for the effort and thought that went into their submissions. 
The emissions trading scheme is New Zealand’s main mechanism for meeting its international commitments to reduce greenhouse gas emissions. The emissions trading scheme was originally designed in the context of New Zealand’s pledge under the first commitment period of the Kyoto Protocol which finishes at the end of this year. 
Rt Hon Winston Peters 
: How about some excitement? 
Hon SIMON BRIDGES 
: There is still much uncertainty—this is exciting enough—in international negotiations over how progress towards reducing global emissions will play out especially during the transition period from the existing Kyoto Protocol framework to a new framework covering emissions from both developing and developed countries which is expected to come into force in 2020. The Government’s main objectives with these amendments are to ensure that the emissions trading scheme supports the Government’s economic growth priorities more effectively to ensure that the emissions trading scheme is flexible enough to cater for various potential international outcomes in the period from 2013 to 2020 and to improve the operation and administration of the emissions trading scheme. 
I am pleased with the committee’s recommended changes to the bill to build more flexibility into the emissions trading scheme—specifically the proposed changes that give the Minister for Climate Change Issues the ability to retain the exportability of units generated by the forestry sector in response to possible future international scenarios and greater discretion in setting the levy rate for synthetic greenhouse gases. I also note that the broadening of the eligibility criteria applying to the use of pre-1990 forest land for offsetting will create greater flexibility for pre-1990 forest owners. 
I would now like to address another couple of topics that were raised by submitters and considered by the Finance and Expenditure Committee. Many submitters raised the option of putting restrictions on the type and quantity of international units that can be used in the emissions trading scheme—specifically where they had concerns over the environmental integrity of certain types of units. It is important to note that the Government reserves the right to restrict access to units that have specific environmental integrity concerns and it has already done so in some cases. Minister Groser has recently asked officials to look into the environmental integrity of certain units so that their eligibility under the emissions trading scheme can be reviewed. I would also note that overall the emissions trading scheme is designed to ensure that New Zealand can meet its international climate change obligations at least cost to the domestic economy. A key part of this is ensuring that the scheme is open to international units so that the price emitters pay reflects the international carbon price which in turn reflects the level of international ambition to reduce emissions. 
Another topic that was raised by a number of submitters was the limited time allowed for consideration of the bill in the select committee. I note that although the time allowed in the select committee was short the committee fully considered all of the 758 written submissions it received and it heard from all of the submitters who indicated that they wished to be heard in person. In addition there were two rounds of consultation on possible changes to the emissions trading scheme before the select committee process: the first in relation to the 2011 review of the emissions trading scheme and the second in April in relation to the Government’s proposed response to it. 
The amendments proposed in this bill will support the Government’s growth priorities ensure New Zealand is in a position to cater for various potential international climate change negotiation outcomes and improve the operation and the administration of the emissions trading scheme. For these reasons I am pleased to commend this bill to the House.