Boscawen John: Third Readings — 
Text is incorporated into the Bound Volume 
Boscawen John: Third Readings — 
[Sitting date: 17 November 2009. Volume:659;Page:7713. Text is incorporated into the Bound Volume.] 
JOHN BOSCAWEN (ACT) 
: 
 I too was a member of the Commerce Committee that discussed the Settlement Systems Futures and Emissions Units Bill. Unfortunately when we first started to hear submissions I was unable to attend all of the committee’s deliberations and the hearing of evidence but I acknowledge the work of the chair the Hon Lianne Dalziel; the officials; and the submitters. It has been interesting to listen to this debate this afternoon. Charles Chauvel commented extensively on the process that we have just gone through in reviewing and hearing submissions on the Government’s proposed amendments to Labour’s emissions trading scheme. It is interesting that during the course of the last 2 or 3 weeks we have had a report from the New Zealand Business Council for Sustainable Development. It has done a survey of a number of issues in relation to National’s proposed amendments. If we looked at that we would read “Shock horror!”—that everything the Government is putting up is bad. But when we read down finally to the last paragraph of that three-page document we see that the council asked people how well they understood the emissions trading scheme. It is interesting to note that about 4 or 5 percent of the people surveyed acknowledged that they have a good understanding of the scheme. In effect 95 percent of the people in the sample who made submissions and expressed an opinion on what the National Government is proposing acknowledge that they do not properly understand the scheme. 
I will use this opportunity this afternoon to go back to first basic principles. We have talked about this scheme facilitating the trade in emissions units. We have heard from the Minister that emissions units will not be treated as personal property under the Personal Property Securities Act. I ask what an emissions unit is. It is the most basic thing that is traded and provided to be traded for under the provisions of the four bills before the House. An emissions unit is the right to discharge 1 tonne of carbon dioxide or its equivalent. I understand that one tonne of methane which is given off by animals by sheep and cattle is equivalent to 25 tonnes of carbon dioxide equivalents. So 1 tonne of carbon dioxide is equivalent to one unit whereas 1 tonne of methane would be equivalent to 25 tonnes of carbon dioxide equivalents or 25 units. 
Under the Kyoto Protocol which New Zealand has signed up to and ratified New Zealand has committed to restricting our emissions of carbon dioxide or carbon dioxide equivalents during the 5-year period of 2008 to 2012 to 1990 levels. In 1990 the New Zealand economy was responsible for discharging if you like the equivalent of 61 tonnes of carbon. We have signed up to a commitment to restrict our emissions during that 5-year period to the equivalent of five times 61 tonnes of carbon dioxide equivalents. That is 305 tonnes of carbon dioxide equivalents or 305 million emission units. 
We might ask what happens after 2012. Well we do not know. We actually do not know. We have been talking about a scheme that has projections for 2020 2050 and 2080 but the reality is that New Zealand has signed up to no commitment whatsoever beyond 2012. We may not sign up to that commitment or we may; we simply do not know. There will be a meeting in Copenhagen in the second and third weeks of December which is in less than a month’s time where this issue will be discussed and I am sure that it had been anticipated by the participants that formal agreement would be reached amongst the nations of the world. Well as recently as a fortnight ago we heard the news that no we will not be reaching any agreement in Copenhagen as the parties are too far apart. It may take a year. This afternoon we had the press release from the Prime Minister stating that he is not going to Copenhagen. He does not expect an agreement in 2010; he does not even expect an agreement in 2011. In fact I have it on good authority that the Government does not expect an agreement will be reached or entered into before the end of our Kyoto Protocol commitment period. 
But coming back to the emissions unit and the requirement to discharge 1 tonne of carbon dioxide or its equivalent New Zealand is being given essentially a free allowance. We have been given the allowance to discharge at our 1990 levels. Our existing levels of emissions in a gross sense are in excess of our 1990 levels but we also get credits for carbon that is absorbed into trees and forests. Since 1990 New Zealand has planted huge additional acreages of forests. Those forests have absorbed carbon and the current Treasury projections I understand are that the levels of our equivalent emissions will be below our 1990 levels. So New Zealand may have no obligation to pay money to anyone for the period from 2008 to 2012. 
It is a moving feast; it could change. The recession that New Zealand has suffered over the last 2 or 3 years has had an impact and we simply do not know what it will be. But let us say that New Zealand has to pay under this calculation. It might interest members to know that Canada has stated that it will not pay. Canada has made the bald statement that it has signed up to Kyoto and it has made commitments but it has no intention of paying. Well if Canada will not pay then I ask why New Zealand would pay. And if we do pay then whom do we pay? 
One of the countries that we would be likely to pay if we have a liability—but we may not and the projections are that we will not—is Russia. Why? The reason is that the levels of emissions in the Russian economy are less than they were in 1990. That is not because the Russian economy has become a whole lot more efficient. On the contrary the Russian economy has been in decline factories have closed and its levels of carbon emissions have reduced simply because products have not been produced. 
We have heard an awful lot from the Labour Opposition in respect of subsidies and the Labour Opposition has been very critical of the National Government’s amendment bill and the process that that bill has been put through by the Finance and Expenditure Committee over the last 7 weeks. Let me say to this House and to the Labour members in particular that I totally agree with Labour members with regard to the process. The process has been an absolute shambles. It has been reckless. It is a very complicated scheme that would impose liabilities and potentially billions of dollars either way. The select committee received 350 submissions on the legislation and it is a fact that the select committee report contains the very important detail that had the National Government had its own way the great bulk of those submitters would not have been given the opportunity to speak. 
It was only this afternoon when Rahui Katene—who sits alongside me in the House—Dr Russel Norman of the Green Party and the Labour members voted to hear all of those people who had a meaningful contribution to make and who wanted to make that contribution that the committee agreed to hear those submissions. I think it is a great indictment on this Government that it would seek to shut those submitters up. 
I totally agree with the Labour members on the process. Labour has talked about subsidies. We do not know what commitment we will make beyond 2012. It has been speculated that we will commit to reduce our emissions levels to 50 percent of 1990 levels by 2050 but the scheme that the previous Labour Government passed into law last year phases out let us say assistance to polluters which is the transitional phase to zero by 2030. Essentially the Labour scheme was a massive tax grab and in that regard I totally agree with Minister Nick Smith and the Prime Minister. The Prime Minister said that it was a massive tax grab that needs to be reversed. I have run out of time but I will be raising this issue as this debate continues. Thank you.