Graham Kennedy: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeGraham Kennedy: Questions for Oral Answer — Questions to Ministers[Sitting date: 29 May 2014. Volume:699;Page:18486. Text is incorporated into the Bound Volume.]11.Dr KENNEDY GRAHAM (Green) to theMinister for Climate Change Issues: Has he asked for any advice on the potential profit made by companies which were given free New Zealand units under industrial allocations in the emissions trading scheme submitting cheaper offshore units instead to meet their liabilities; if so what was it?Hon TIM GROSER (Minister for Climate Change Issues): No because unlike non-industrial participants of the emissions trading scheme the industrial participants in the scheme do not have the luxury of opting in and opting out and opting in again to the scheme.Dr Kennedy Graham: Is he aware thatMethanex which for example received an allocation of 300000 New Zealand Units in 2012 could have submitted cheaper international units instead of those New Zealand Units thereby profiting at the taxpayer’s expense to the tune of $1 million?Hon TIM GROSER: This goes to the heart of the issue. The scheme is designed to allow participants in the scheme to minimise the cost of meeting their obligations. It is entirely possible thatMethanex may have found a way to minimise its costs. From the end of May onwards the situation will change when all participants will have to use New Zealand Units.Dr Kennedy Graham: When he said yesterday in answer to a question that he was happy for companies “to maximise their fiscal position” under the emissions trading scheme was he talking about the possibility of New Zealand Steel making $3 million because his Government refuses to stop the flow of cheap credits into New Zealand?Hon TIM GROSER: This is essentially relitigating exactly the same point. The reality is that we expect companies to behave like rational economic actors. If the way they can meet their obligations involves using certain types of units that meet the standards of environmental integrity that we have set that is exactly what we would expect to happen.Dr Kennedy Graham: Does he think New Zealand families will be equally as happy as he is that these big companies are profiting from their pollution by playing the market?Hon TIM GROSER: These companies are minimising their costs of meeting their obligations. They are still obligations they have to meet. New Zealand will be better served by people who pursue low-cost abatement strategies.Moana Mackey: Does he appreciate that New Zealand met its international climate change obligations in the first commitment period of Kyoto only because of forestry; if so why is he unfairly targeting the post-1989 foresters whilst allowing everyone else to continue to engage in arbitrage with access to these cheap units?Hon TIM GROSER: We are not unfairly targeting forestry; we were removing a privilege that only post-1989 Kyoto foresters had. They were making money at the taxpayer’s expense. I think it is time the member started to think of the taxpayers she is meant to represent.Moana Mackey: In that case why did he not simply stop post-1989 foresters from being able to deregister and reregister in a single reporting period which would have avoided capturing forest owners who entered into the emissions trading scheme in good faith but now want to exit because the economics are not there and who have no intention of reregistering to game the system?Hon TIM GROSER: First of all if post-1989 Kyoto foresters want to stay in the scheme they can until the end of the true-up period or rather more precisely until the end of May 2015 continue to use cheaper international units if they wish to along with other participants. What we have stopped is a money-go-round that allowed them to make money at taxpayers’ expense.