Mackey Moana: Questions for Oral Answer — Questions to Ministers 
Mackey Moana: Questions for Oral Answer — Questions to Ministers 
[Volume:647;Page:16053] 
5.  
MOANA MACKEY (Labour) 
 to the  
Minister responsible for Climate Change Issues 
: What reports has he received on how important an emissions trading scheme is towards making progress on climate change? 
Hon DAVID PARKER (Minister responsible for Climate Change Issues) 
: 
 I have seen two apparently irreconcilable reports. The first is from Nick Smith and says: “The sooner we get an emissions trading system in place the sooner we can make progress on climate change.” The second is from John Key last Sunday and says: “I’m calling for a delay in the passage of this legislation.” 
Moana Mackey 
: Who bears the cost of growing emissions if the emissions trading scheme is deferred? 
Hon DAVID PARKER 
: It is absolutely clear that without the emissions trading scheme New Zealand’s emission will increase and the taxpayer will have to bear the additional hundreds of millions of dollars of cost. These are the same taxpayers whom National is simultaneously pretending it would help. 
Hon Dr Nick Smith 
: Why did he welcome only 2 weeks ago the 2-year delay announced by the Prime Minister in the implementation of the emissions trading system but go aplectic over the weekend proposal from John Key that Parliament— 
Hon Member 
: Go what? 
Hon Dr Nick Smith 
: I will start again for the benefit of the Ministers. Why did the Minister welcome only 2 weeks ago the 2-year delay in the implementation of the emissions trading system announced by the Prime Minister but go aplectic over the weekend proposal—[ 
Interruption 
] 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. I do not know what that word means but it could be an insult and I would like the member to explain it to the House if he wants to carry on with that question. I am certain he knows what it means. I do not but maybe he does. 
Madam SPEAKER 
: Would the member please continue. Not all members always pronounce words the way others wish them to be pronounced so please continue. 
Hon Dr Nick Smith 
: I will reword it for the Minister: why did he welcome only 2 weeks ago the 2-year delay announced by the Prime Minister in the implementation of the emissions trading system but not welcome the weekend proposal from John Key that Parliament use this window of opportunity and take the time to get the emissions trading legislation right? 
Hon DAVID PARKER 
: That one is easy. The reality is that the increase in the price of petrol and diesel is far more influential because of the very rapid rise we have had in petrol and diesel prices far outstripping what would be the cost of carbon through the emissions trading scheme. So the effect of delaying transport into the emissions trading scheme has very little effect on emissions during the first commitment period and does not come at great cost to the economy. 
Judy Turner 
: Has the Minister seen the April 2008 New Zealand Institute of Economic Research report which states that the emissions trading scheme will reduce employment by 22000 jobs in 2012 and how does this Government plan to compensate those whose jobs will be lost due to the imposition of an emissions trading scheme? 
Hon DAVID PARKER 
: Yes and I addressed that issue in question time last week when I noted that there is a flaw in the New Zealand Institute of Economic Research analysis. The Treasury analysis comes to a different conclusion. The main difference in the two approaches is that the New Zealand Institute of Economic Research includes an assumption that increased subsidies would increase net welfare in New Zealand which flies in the face of the New Zealand experience and general economic theory. 
Moana Mackey 
: What other reports has he seen about cause for a delay in the emissions trading scheme? 
Hon DAVID PARKER 
: The  
Sunday Star-Times 
 editorial last week stated: “It is vital however that the scheme goes ahead and it would be extraordinarily reckless for National to pull the plug on it for merely electoral reasons. Today John Key is to give an important speech on his party’s position. This is a real test of Key’s statesmanship and of his ability to resist the reactionary rump of his own party.” 
Hon Dr Nick Smith 
: Are not his claims yesterday that slowing the process of this legislation through Parliament would cause massive deforestation a sign of his desperation and panic when the provision in the bill is already backdated to 1 January 2008 and the timing of the passage of the bill is irrelevant to when it actually takes effect?  
Hon DAVID PARKER 
: Not at all. The reality is that last year there were 19000 hectares of deforestation in New Zealand. 
Hon Dr Nick Smith 
: Under your Government. 
Hon DAVID PARKER 
: Correct. Without the emissions trading scheme deforestation would return to New Zealand at similar levels to that but rather than there being no cost to the taxpayer as was the case last year there would be a cost of hundreds of millions of dollars. 
Jeanette Fitzsimons 
: Was it his intention when the emissions trading scheme legislation was designed that a trade-exposed industry could receive a free allocation of 90 percent of its 2005 emissions then reduce its production to a small fraction of its 2005 output and sell its surplus credits if that was more profitable than continuing to trade at the same level; and if that was not his intention will he remove that opportunity? 
Hon DAVID PARKER 
: Free allocation addresses a number of issues. One of them is carbon leakage but the other is sunk investment costs. So it is not quite as simple as one not getting any allocation if one reduces one’s output. But I am sure that this is one of the issues that will be considered further at the select committee. 
Rodney Hide 
: Given that the Earth has been getting warmer for 18000 years that it has been getting cooler since 1998 and that even if New Zealand shut its entire economy down it would have no impact on the world’s climate will the Minister consider delaying this legislation until after the election so that its effects can be considered properly; if not why the rush? 
Hon DAVID PARKER 
: I think that can be easily answered by saying that the world has not been getting cooler since 1998. 
Judy Turner 
: How does he expect New Zealanders to suffer the still unquantifiable economic and social costs of the emissions trading scheme when global food demand and emissions leakage mean that this country’s agricultural emission reductions will actually lead to a global increase in agricultural emissions of more that the equivalent of 3 million tonnes of carbon dioxide; and does he agree that this is one of the many failings within the limited framework of the current emissions trading scheme legislation? 
Hon DAVID PARKER 
: No I do not accept those assertions. Agriculture does not come into the scheme until the start of 2013 and then it receives free allocation covering 90 percent of its 2005 emissions. In addition to that I do not accept the proposition that there are no emission reduction opportunities in agriculture. It is true that they are limited but they are not non-existent.