Court SimonSIMON COURT (ACT): Thank you Mr Chair. We've heard the Minister's response to this tabled amendment and to some extent the Environment Committee addressed some of those concerns but not adequately.I'd like to move on to Supplementary Order Paper 15 which tables an amendment to the Climate Change Response (Auction Price) Amendment Bill and which address the real risk and as yet the unaddressed risk that should an auction with a confidential reserve price fail to clear bidders who bid in good faith and who submit bids above the confidential reserve price will find that they're not able to take New Zealand Units away from the primary auction. It's been offered that those bidders could then go to the secondary market and secure the units that they need. It's also been suggested that they've had a long time to prepare for this. It's been suggested that there is a large bank of New Zealand Units or carbon credits out there.I'd like to talk about a number of those matters because they all add up to a scenario which is not shared by the submitters. Those are the submitters who will be bidding for millions and millions of units which they must secure in order to then fulfil their obligations under the emissions trading scheme. They want the emissions trading scheme to succeed and the reason they want it to succeed is because if it doesn't they fear—and this is a genuine fear—that the Government will simply move to policy mechanisms to direct interventions in the market. They doubt whether this Government actually believes in markets. They're not entirely confident that this Government wants a market place solution to succeed. So perhaps if an auction did fail and then businesses were scrambling to secure units from the secondary market there were price spikes and then commentary around that in the media and in markets then that could be a legitimate justification for the Government to say Look markets don't work." But again any market that has a floor a ceiling and a confidential reserve price—which is what we're here to discuss at this stage of the committee—is already if not rigged then extremely tightly controlled by those running the market.So what this Supplementary Order Paper proposes to do—and ACT feels that this is—is a genuine amendment that will take risk out of the emissions trading scheme and make the emissions trading scheme more durable more enduring and more accepted not just by the businesses that participate in it but by those communities who hear the acronym—the ETS—hear about the concept of a marketplace system and wonder what on earth that has got to do with the climate. If we wish to establish an enduring durable market that has the confidence of its participants and also the communities that are affected by this then ACT believes that allowing bidders who bid for units in the market and whose bids are above the confidential reserve price—that they should be able to take those units away.I've heard some of the concerns raised by the Minister and by officials that if the auction clears and those bidders take only part of the units away then the reserve price would be easily discovered. We know that reserve price will be close to the secondary market price so it's not like the discovery will be "Gosh it was $10 lower or $10 higher."—that's not a likely outcome. It's important that the bidders have confidence that when they place a bid and their bid is above the reserve price they know not just that the auction failed and the Minister will review it but they actually have an opportunity to secure the units that they bid on and to be able to if they are for example traders or buying on behalf of others go back to their clients and tell them "Yes we put in a bid at the price that you agreed we'd bid and it was above the reserve and we secured the units you need."Now if for some reason the 4.75 million units don't all sell at one auction then they will indeed carry over to the next auction but if it's a fraction if it's a few hundred thousand or if it's a few tens of thousands that fail to clear that should not be a reason for millions and millions of tons equivalent of carbon and those units failing to be available to the market participants to fulfil their obligations. So that's why ACT believes that this amendment inserting new clause 11A "In regulation 32 replace 'zero' with 'or equal to the confidential reserve price'." and to delete some of those other clauses that if the entire block of 4.75 million units is not all sold above the reserve then the entire block will fail to sell will be enduring and will give confidence in the emissions trading scheme. In fact it gives us some small hope if this amendment was to be taken up by the Government and accepted that there is an opportunity for an enduring cross-party approach to a nationally agreed way to mitigate emissions and that's how New Zealand will retain its standing in the world.We could well become an example of how emissions trading schemes and a market-based approach to mitigating the risks of climate change can be a shining light a guiding light to some of our competitors particularly in Europe where they have a hash of an emissions trading scheme themselves. It doesn't include transport and a host of other subsidies and levers that they pull in their economy both with transport—I mean they still subsidise diesel for their fishing fleets. They subsidise French farmers to grow hedges apparently for biodiversity. We want to avoid any of those false I guess mechanisms that don't actually address climate change that don't mitigate emissions but that give the impression that Governments are seen to be doing something. That is true virtue signalling and the ACT Party doesn't agree with that.So this bill has been brought to the House under urgency. That in itself creates uncertainty—the submitters said so; a number of them did. They have said it takes time to get large businesses and their trading units and their clients used to the idea and conditioned to the idea of how a market will work and they were asking for more time but of course it's not possible to have more time because of the time frames that have already been set for the auction process—and that's 17 March for the first auction. We believe that if the Government listened to ACT and to submitters and took up this amendment that we've proposed we could achieve a fully functioning ETS in time. This one small amendment won't achieve that on its own but it will go some way towards mitigating the risks that submitters have raised and creating an enduring national process. For that reason ACT commends this Supplementary Order Paper this amendment to the Climate Change Response (Auction Price) Amendment Bill to the committee. Thank you."