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Climate Change Response (Emissions Trading Reform) Amendment Bill — Third Reading

Sitting date: 16 Jun 2020

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  • CLIMATE CHANGE RESPONSE (EMISSIONS TRADING REFORM) AMENDMENT BILL

    Third Reading

    Hon JAMES SHAW (Minister for Climate Change): I move, That the Climate Change Response (Emissions Trading Reform) Amendment Bill be now read a third time.

    E Te Māngai, tēnā koe. Tēnā koutou e Te Whare. In 2018 not too long after we got into Government, the Intergovernmental Panel on Climate Change published a report on what it is going to take to limit global warming to below 1.5 degrees Celsius above pre-industrial levels. Staying below that 1.5 degree threshold, the report said, is the best chance that we have of avoiding the worst of the climate crisis. But there was more to it than that. The report provided us with absolute clarity on the challenge that we have ahead of us. Specifically, it said that we need to cut carbon dioxide emissions in half by 2030 and to get to net zero carbon emissions by 2050. There was a seismic shift in our understanding of what our children would inherit if we do not act.

    When that report was published, we had 12 years left to make the necessary emissions reductions. But we don't have 12 years any more. Now we have only 10, and soon it will be nine. With nearly three decades of inaction behind us, we came into Government at the last possible moment before the window of opportunity to change course closes for ever. That is why we have spent the last three years putting in place the institutional framework to bend the curve of our emissions downwards, something that has never happened before in our country. Once passed, the reforms contained in this bill will be a critical part of that framework.

    Before I touch on the role it will play, I want to spend a moment reflecting on how we got here. It's a journey not started by me, I might add, but by the previous Government. Five years ago, they realised that a cap and trade system without a cap was failing to deliver on its primary purpose of cutting pollution. It has been accepted for decades that a well-designed system for pricing emissions needs to be a central part of any Government's climate policy framework. Now, what we've had until now has neither been well designed nor a part of a broader policy framework. Some might have wanted to throw it out and start again from scratch, but, as the old saying goes, a bird in the hand is worth two in the bush. So, instead, we chose to take the emissions trading system (ETS) and to fix it. From now on we will have a clear, transparent, and predictable set of rules for emissions pricing, which will drive investment into low-carbon solutions to cut pollution.

    Change is a collective effort. There are hundreds of people both inside and outside of Government who have worked on this bill. But there are a few people who I'd like to thank in particular: first, the stellar team at the Ministry for the Environment, who, led by the Secretary for the Environment, Vicky Robertson, have worked under astonishing pressure to get this bill to a place where it can bring about lasting change. They worked alongside the equally stellar team at and the Ministry for Primary Industries—led by Julie Collins and Ray Smith—to develop the nearly two dozen Cabinet papers that form the basis of this legislation.

    I'd also like to acknowledge and to thank the advisers and the private secretaries in my office, past and present, who have guided this bill every step of the way and supported me and my colleagues with a great deal of skill and even more patience. Then there are the thousands of individual New Zealanders, environmental organisations, farmers groups, businesses, iwi, and hapū that took the time to submit to the Environment Committee, ably chaired by Dr Duncan Webb, as well as the members of that committee themselves. The sum of that work is that, finally, there will be a sinking lid on the pollution that we put into the atmosphere. There will be, finally, a proper price on pollution. And we will now, finally, play our part in tackling the climate crisis and we will do so in a way that is fair and is transparent and is affordable.

    I will be the first to admit that the emissions trading scheme is a vastly complex system. However the premise is actually pretty simple. A carbon price, if high enough, provides companies with an incentive to reduce pollution whenever doing so would cost less than paying for permits to pollute—what we call emissions units. In other words, when it works, it encourages businesses to innovate and to invest in solutions. Together with the introduction of transitional mechanisms like a price floor and a cost containment reserve, the price of carbon will not only be sufficiently high to incentivise investment but predictable enough to give companies the confidence that they need to make those investments.

    There are bound to be people watching what we do here today who will be wondering why we're passing this bill at a time of profound economic crisis, and some of those people are in fact sitting in the seats opposite. Now, I can give everyone here and everyone watching an hour of their lives back by telling you that the sum total of the National Party's contribution this afternoon will be "now is not the time." Well, now is precisely the time to be passing this bill. I said at the beginning of my speech that we have 10 years to cut our emissions in half, and that shortly drops to nine. And if we kick this bill into the long grass for yet another year, that drops to eight. But the size of the effort doesn't reduce. We still have to cut the same amount of pollution, whether we do it in eight years or nine years or 10 if we get started today. Every year of delay makes the effort harder and more expensive than if we just got on with it right now. Those calling for delay, as they always do, are in fact calling for higher costs and greater economic disruption.

    Now, for decades we have been told that we must choose between the environment and the economy, and that is, and has always been, a false choice. A zero-carbon economy will help to create cleaner and more vibrant and safer communities in every part of our country. It will connect our towns and our cities with frequent and fast trains and buses and roads free of congestion. It will create green jobs that pay people enough to provide for their families and to put a roof over their heads. It will support innovation and new investment in clean-tech, high-value industries. And the Opposition wants to delay all of those things for yet another year on top of the 30 years of delay that we have endured so far.

    We have the zero carbon Act; the Climate Change Commission; the first set of emissions Budgets; the first national climate change adaptation risk assessment; the billions that we are investing in rail, light rail, buses, walking and cycling infrastructure; the billion trees programme; the Green Investment Fund; climate impact assessments on Government policy; climate-related risk reporting for large companies and organisations; the electrification of the Public Service car fleet; the end of new offshore oil and gas exploration; and now, finally—finally—we have a limit on emissions and a proper price on pollution.

    I can confidently say that in a single term of Parliament, we have done more to stave off the climate crisis than the past 30 years of Governments combined. Perhaps I can put it like this. When we came into Government, we had a choice: continue down the high-pollution path towards the climate crisis, leaving our kids to suffer the consequences, or create something better, an economy and a society that is more equitable, more prosperous, and more innovative—all within planetary limits. This bill and every action that we have taken that preceded it is a result of that choice, the choice that we made to build a better future. And today, that future is closer within reach than it has ever been before. Nō reira, tēnā koutou, tēnā koutou, tēnā koutou katoa.

  • Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Speaker. Look, I don't doubt the sincerity or the dedication that the Minister brings to this debate, and, in fairness to him, it is his political life mission to reduce the impacts of climate changenot only here in New Zealand but around the world—and I give him credit for that. And I give him credit for his passion and his dedication and his commitment to that role. We share that on this side of the House, and we have done for a very long period of time. But what he rightly says, in terms of his third reading speech on this bill, is that the impacts will be costly and have a negative effect on New Zealand families, on New Zealand businesses, and on the New Zealand economy at the very time when we are confronting, as a nation, the worst economic crisis of the last 100 years. What we are saying on this side of the House, notwithstanding the Minister's blithe discounting of it, is that now, actually, is not the right time to be doing it. Now is not the right time to be foisting extra cost on struggling businesses.

    This is the problem with the ideologically pure and driven Greens who have pushed this through with the support of New Zealand First and the Labour Party. They are going to hurt New Zealand businesses at a time when they can very least afford to be hurt even more. What we've had now is the greatest number of job losses ever being recorded in New Zealand: 40,000 job losses in the last month alone. New Zealand businesses are hurting, and what does this bill do? Well, it puts a price higher on carbon than has previously been the case. There is already an impact on New Zealanders' wallets and their back pockets in a way that could not be worse at this time right now. So what we find is that this bill, amongst other things—and it's a big bill, it runs to 300-odd pages, it's a very complicated bill with many moving parts, all sorts of detail in it, and much of it will be unfamiliar and unfathomable to many New Zealanders. But the bottom line is, as the Minister says, it puts a price on pollution, and that, of itself, is not a bad thing. It's just a question of timing.

    So what do we find, amongst other things? Some of our major industrial businesses are going to be hit by the decision to reduce the free allocation of credits. Those are businesses like New Zealand Steel, like the aluminium smelter, like the O-I glass manufacturer in South Auckland, like our fertiliser companies, like the oil refinery up at Marsden Point, and like a number of other businesses who, if they are not profitable, if they are not sustainable in our economy, guess what! We'll be buying those products, importing those products, from countries overseas with a worse emissions footprint than anything that occurs here. And we will be exporting jobs and importing carbon products or products that have been produced in a less efficient way from overseas. That's carbon leakage, and that actually does nothing, absolutely nothing, to solve the issues that confront the globe.

    What's more, this bill gives effect to the first-time pricing of agricultural livestock into the emissions scheme at farm level and fertilisers at emissions processor level from 2025. There's a sword of Damocles that hangs over the agricultural sector, because, if the Minister for Climate Change and the Minister of Agriculture don't feel that there's been sufficient progress made by 2022, which isn't very far away, they're going to move that forward. And that will mean that New Zealand farmers, who already compete against subsidised products from pretty much every other primary producing country in the world, already have a difficult job in terms of exporting their product around the world. They are going to have an extra handbrake put on them. I just can't see the sense of that at this current time. Farmers, actually, are doing very well. They're already low-emission producers by world standards, and they do a great job and have done a great job over a long number of years. There are a number of examples that the Minister, during the committee of the whole House stage—and I credit him with engaging with the Opposition in a very full and detailed way, and actually that worked, I thought, very well. I thought the committee of the whole House debate was a good one, and I wanted to acknowledge and thank the Minister for engaging fully in it.

    But already, since the announcement of the Supplementary Order Paper and the regulations that go with this bill, carbon price has moved up. So it was at about $25, or a little bit under, for most of the last 12 months or so, but, today, it sits at $31.40. Already, that's having an impact. So at the committee of the whole House stage, the Minister conceded that at $25 a tonne currently that works out for a litre of petrol at the pump, New Zealanders are paying about 4c a litre into the emissions trading scheme contribution. But at $35, the Minister conceded that that moves up to 9c a litre. Now, that might not be a lot to many people. It may not be a lot to many people. And I suspect, actually, that's not enough to probably change driving behaviour. But all it does is add to the cost of living of New Zealanders at a time when we can least afford it. It's not of itself going to be sufficient to change behaviour. Indeed, the Minister has indicated that the price needs to go up vastly higher than the $35 that is currently mooted.

    I want to just refer to the issue that has been highlighted since this bill came back to the House. That is the plight of the South Island winter tomato growers who currently produce tomatoes during the winter, and they have a real issue because, even at $30 a tonne, it looks like many of those growers are not going to be able to produce tomatoes in the South Island during winter months. The reason why is because they heat their hothouses with coal. Of course, coal is a greenhouse gas evil, and that is something that needs to be changed, but is now the right time to do it? These are businesses that are looking for mitigation options. They're looking for help and assistance from the Government, and it seems there is none. There's a lot of talk by this Government of a just transition. Well, the just transition in the case of South Island tomato growers will be that they just don't grow tomatoes. It'll be as simple as that. And what will happen is that the demand for tomatoes in the South Island during the winter will be met by other producers who will ship their product around the countryside by fossil fuel - carrying vessels or trucks or trains or whatever. They will shift product around and actually defeat the very purpose of this bill, because the emissions will be ultimately higher. Then the Minister, when he was confronted with the concerns and the criticisms of the South Island tomato growers, he said, "Well, we've got a Green Investment Fund." The fund was set up recently—actually, a couple of years ago—the job, which is to assist companies to adopt low-carbon technologies, to help them finance that. Well, as of today, a hundred million dollars allocated to that fund in Budget 2018, not one single cent invested so far. Not one single cent. They've got flash offices, they've got a team of nearly a dozen high-paid executives, many of them who, pre-COVID, spent a lot of time tripping around the world, probably adding to the carbon emissions. But have they made any investments in the sorts of things that the Minister has promised the South Island tomato growers? Not one cent.

    So National is not going to support this bill at this time, not because we don't agree with the broad principles, because we do, but it's a question of timing. In a post-COVID environment where it's going to be our primary producers who are going to need to lead an export economic recovery for New Zealand and New Zealanders, surely now is not the right time, no matter what the protestations and the blithe dismissal of the Minister in terms of his tin ear on the needs and the concerns of New Zealand business people and New Zealanders who are trying to conduct their day-to-day lives against the most dramatic economic crisis that this country has seen in living memory, probably for more than 100 years or so.

    So I do take issue with the Minister, and when he just dismisses, as this Government so often does, any criticism and just dismisses it blithely, then I think that that is treating New Zealanders and New Zealand business people with disdain and disrespect. I think they deserve better than this from a Government that is supposed to be caring, kind, and putting teddy bears in the windows. So look, thank you, Mr Speaker. We oppose this bill at third reading.

  • Dr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe, Mr Speaker. Look, I give that speech a D. I give it a D, because that's really what typifies it. I don't think there's any deniers left over that side, but I have my suspicions. But the next D I see there is, yet again, delay—delay, delay, delay, one more day, one more year, one more decade, one more lifetime. That's where we would be if we did it the way they would like, but the time absolutely is now. And the fact of the matter is that it's not time to delay, not time to deny, not time to defer and deflect, to turn our attention elsewhere.

    The time is now to look clearly and urgently at the problem which is before us, and it is a problem. The fact of the matter is that carbon costs. The illusion is that it doesn't because it's spread thinly—thinly geographically and thinly over time. But every carbon emission is costing us and it will cost us our livelihoods, it will cost nations their land, and yet they would have us delay. The time is not to delay. The time is for action. And look, I know there's concerns out there, and it's entirely unsurprising when we have a significant change that there's anxiety.

    Only the other day, Saturday in fact, I was on a street corner in Christchurch talking to people, talking to my constituents. At street corner meetings, I imagine we know, we get a full range of people, and an older guy, a bit older than me, probably a boomer, came up to me, and he made all of the arguments in succession.

    "Not now. Our current circumstances dictate—we're in the middle of an economic crisis." We're always in the middle of some situation. There is always a reason to do nothing. It takes courage to say further delay is wrong; we must act now. In fact, in this crisis, in this economic crisis, is exactly the right time, because we are in times of change. Let us take advantage of the fact that there are people out there who can redeploy, who can shift our economy to a low and ultimately no-carbon economy.

    "We can't make a difference. We're tiny. We're less than 1 percent." Now, that's another trick, another philosophical trick, where if we break ourselves up small enough, into small enough units, no one can make a difference, and together we drown. So each of us, each 1 percent, each 0.5 percent, has to take their load. And what's more is we should take more than our load, because we have been emitting more carbon than just about any other nation in the world per capita for decades. That's why we should be lifting more now than some of our neighbours, and we're better placed to do so.

    "Too fast, it's all too fast. Let's just defer it a bit more. Give us more time to transition." Well, there are two things to say about that. The first is that this has been on the books since 2008 and we've done nothing. It's had no effect. The other thing is that we've got a 50-year time horizon to get to carbon zero. So let's not think we're being hasty. Let's think we're taking the first tentative—gingerly stepping down a very long but very important road.

    "The system hasn't worked." Well, it hasn't worked, because it was broken. It wasn't designed correctly, and that lot knew it and they didn't fix it. They sat on it, they watched it, and they twiddled their thumbs whilst the fires kept burning. This cap and trade system—a cap and trade system with a cap and trade—is one that will work.

    Look, I want to touch on one which, you know, has raised some genuine concern in some communities. And that's the fear that there's going to be too many trees. I want to recognise this and recognise the fact that there are rural communities, in particular, which are anxious about this. The first thing to note is that we have fewer trees now, fewer forests now than we did in the 1990s. And this system, the 2008 system and the illusory credits that were out there, in fact, led to deforestation in the long term, led to fewer forests. Now, we do want the right forests in the right place; we don't want to see forests planted on good, productive land. But this is not, and forests are not, the way ultimately to a zero-carbon future. The way to a zero-carbon future is through good progressive technologies, and that's what this does. This bill is nudge politics at its best. It's saying we need to recognise that carbon costs and that we need to put those costs where they are properly borne, on the sector which emits that, so that the sector changes, so that they make rational decisions about the costs that they're imposing on others here in New Zealand and, in this case, around the world.

    "Wait for the science." is the other one. That's another delay. "Let's just wait. Something is just over the horizon. They're working on it. Solar panels will get better. We'll genetically modify our cows not to emit methane." Well, if that's the approach we take, we can take that one for ever as well. It is just delay in disguise.

    "It will stop economic growth." That, as the Minister for Climate Change said, is the biggest fallacy. If we look at countries that have achieved reductions in carbon, they are the countries with the highest growth. They have harnessed technology and they have managed to do this in growing economies. And whilst Treasury projections in respect of this bill see a modest reduction in GDP, in fact history would suggest that this will be a huge boost as we enhance our productivity, enhance our energy efficiency, enhance our transport networks, and so on. So this is, in fact, a great and timely piece of legislation. It is a big bill, and, as was noted, it's a complicated bill.

    Hon Nathan Guy: 724 pages.

    Dr DUNCAN WEBB: It's 724 pages of absolute progressive green gold, and I absolutely endorse it. It is a money bill. It's a bill which deals with finance. It isn't a finished work. It will never be a finished work. A machine that is this important, this complex, and this valuable requires ongoing maintenance. So do expect to see it back here like you would with any piece of legislation which is critical to the working of our economy and our country. This is a bill which creates a market, and I'm surprised that the Opposition are not supporting it, because it is a market-based solution to an environmental problem and it's a huge leap forward.

    I want to say this. Being part of passing this legislation along with the other climate change legislation is a highlight of this term of Parliament. I'm very proud to have been part of it. It's been a real privilege. I commend it to the House.

  • Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Speaker. I'm very pleased to rise to speak in the third reading of the Climate Change Response (Emissions Trading Reform) Amendment Bill, and very pleased to reconfirm National's position, which is in opposition to this bill. Duncan Webb was—

    Hon Nathan Guy: Who?

    Hon JACQUI DEAN: Well, exactly.

    Hon Nathan Guy: He went down in the list.

    Hon JACQUI DEAN: Exactly. Duncan Webb, chair of the Environment Committee considering this bill, gave us what he thought was a grade of "D" that we should be ashamed of, far from it. We are very pleased to stand in this House. We absolutely accept the nomina of "D"—"D" for "delay for very good reason." It seems to have escaped this "Government of kindness" that we are, in fact, heading towards not a recession but something much worse than that, and we will find out a little later this week how soon and how badly our economy will dip into depression. And what is the industry that is keeping this country's hopes alive? What is the industry that is going to be that industry which carries New Zealand through some very tough economic times in the next year, two years, three years from now? Well, of course, we know what it is: it's agriculture.

    Duncan Webb—and I was surprised that Duncan trotted out this argument when he said that New Zealand is emitting more per capita than any of our neighbours. Well, yes, but there's numbers and then there's numbers. And maybe what Duncan hasn't considered, or maybe has forgotten, is that New Zealand's emissions profile, of course, is skewed, because around 50 percent, more or less, of our emissions come from methane. Those methane emissions come from those very animals in that very sector of our economy which is the sector which is going to enable the next Government to be able to support the social spending that we are going to so badly need over the next few years. The fact that Duncan Webb, firstly, didn't seem to realise that New Zealand's emissions profile was so very unusual is a little astounding, given that he is the chair of the committee, but the fact that he would choose to use that figure as an argument for ploughing ahead with this emissions trading bill, which will impose cost not just on agriculture—but, of course, those costs will flow right through our society—is a little puzzling. So if anyone gets a "D", I award it to Duncan Webb.

    Duncan Webb also said that this is the right time "because we are in times of change." Yes, we are in times of change, Duncan Webb. We are about to move into the greatest economic hardship that this country has seen in 160 years. If that fact has passed you by, then I would suggest that you and your Government and your coalition partners think again about the impost on bringing agriculture into the emissions trading scheme (ETS) by 2022, by 2025, at farm gate level, at processor level. We would suggest that the Government and its coalition partners think again, and think again about the importance of agriculture on our economy and how critical it is that we have an agricultural sector that can face the future with some confidence—some confidence—because no other sector can.

    Tourism can't. Tourism is on its knees. And, Mr Speaker, I'm cognisant of the fact that I'm straying a little wide of the bill, but the point I am making here is that National's suggestion, National's—

    Hon Member: Idea.

    Hon JACQUI DEAN: National's idea—thank you; that word is important—is that we delay for a year so that we get a sense of just how badly our economy is performing, and then make a decision about bringing agriculture into the ETS, even more so than it is now.

    The Hon James Shaw, I want to thank the Minister for his engagement with all parties in the House, and particularly—and Scott Simpson acknowledged this—James Shaw's contribution to the committee stage of this bill was really very impressive. He has an in-depth knowledge of his subject and is very passionate about emissions trading; it is his reason for being here in Parliament. National has no argument with that. Our point—and James Shaw is quite right: we were always going to be arguing on the point of delaying this for a year—is that this is not business as usual, and yes, Duncan Webb and the Hon James Shaw, there is a wrong time to bring agriculture, methane emissions, into the ETS, and that wrong time is now. Further, I would say to James Shaw, who asked the rhetorical question: "Why are we passing this bill at a time of profound economic crisis?"—indeed, James Shaw, why are we? Why are we putting this cost impost on that very sector of our economy who are the ones who will bring us through this very tough time in front of us? We don't know what that looks like. We don't know how hard it's going to be. We don't know how many people are going to become unemployed, lose their jobs, lose their livelihoods, lose their homes, lose their businesses. We don't know, but we do know that it is going to happen. So why would any Government propose to impose more cost at that time? We say no. We say delay.

    James Shaw also put forward the argument that every year of delay we make the effort harder. To the contrary, Minister. When we are considering methane emissions and the impact of agriculture on global emissions, a delay of a year gives that industry a whole year to continue developing the science and the technologies so that we have an ETS system which is led by science. Our agricultural sector is very aware of the impact their emissions are making in New Zealand. What are they doing about it? Well, they are investing in science. They are investing in the very technologies that will reduce those emissions. Give them a year—give them another year to work on those technologies.

    I read just a couple of days ago that there is now a breed of cattle which is shown to have less in the way of methane emissions compared to others. Well, that's very exciting, because what it will lead to is a breeding programme—just as we do when we're looking for any quality in animals, there will be a genetics programme of breeding which will get us closer to the science which will allow agriculture to enter the emissions. What we've got now is a tax. We are literally contemplating today a tax on that very industry of agriculture, which is the industry that is going to bring us through this post-COVID world.

    So yes, Duncan Webb, yes James Shaw, I am very proud to stand up and give a "D"—"D" for delay, "D" to allow the agricultural sector to find the science to comply with climate change regulation. I am very proud to stand here today as a rural National MP who is in touch with the farming sector. I was at farmer meetings yesterday. They are very concerned about the essential freshwater package. They are very concerned about that national policy statement for biodiversity. They are very concerned about getting their meat processed. They are very concerned about their own futures, and they know that they are the sector that will prevail in getting through this post-COVID world. Do not saddle them with extra cost at this time. National opposes this bill for that reason.

  • MARK PATTERSON (NZ First): I rise to support this Climate Change Response (Emissions Trading Reform) Amendment Bill on behalf of New Zealand First. I too have a "D" to throw around that last speech by Jacqui Dean—and that is "disgrace". It's the National Party, you went over there—Paula Bennett went over there to Paris—

    Hon Nathan Guy: Oh, we've heard all of this before. It's like a broken record.

    MARK PATTERSON: —and signed us up to a set of targets. Well, OK, I'll move on from that and I'll move on to the speech from Todd Muller on Sunday, where he admonished previous National Governments and previous Labour Governments for not moving fast enough on this very issue. In the very first opportunity that he's got to walk that talk so that he can lead this country—or at least lead his party—he's failed at the first hurdle. That, in my way of thinking, is a disgrace. This is an incredibly important issue. We do have to make our 2030 targets, we have committed to them, and we can't afford to just kick the can down the road for another year—that's 10 percent of the time that we've got left to meet those 2030 targets.

    New Zealand First's view on this has always been that we must do our bit as international citizens. We must address this issue ourselves. We had, in the previous Government, a scheme where you could buy emissions offsets from offshore—many of them turned out to be fraudulent. That is just not the New Zealand way; we're cheating ourselves and we're cheating, essentially, the planet. If everyone starts doing that, we're getting nowhere. So we've got to do our bit, and that's very much been New Zealand First's attitude all along. We will not stand for delay.

    So this bill, as the Minister for Climate Change said, it's an incredibly complex piece of legislation. One of the main features, of course, is the cost containment reserve with the floor and the cap. That cost containment reserve is a little bit like the Reserve Bank, perhaps, being able to print a little bit of money to bring the currency down just so we can manage that, and I think that is a worthy mechanism within this bill: to make sure that that transition that businesses are going to make can be a fair one.

    Our major industries actually have responded. Fonterra have committed to phasing out their coal-powered stations—(a), because it's the right thing to do and they know they have to do it, but, (b), because their competitors are. FrieslandCampina, the big Dutch dairy company, has made an even stronger commitment to make decreases. So if we're not in that game, we're not going to be competitive in the long term. We had Mr Simpson talking about, actually, the tomato growers, and how they were going to be disadvantaged by that. Well, maybe he should have taken a bit more notice of Ecogas Ltd, who got $700 million in funding from the Provincial Growth Fund (PGF), and they had teamed up with T&G Global to produce biogas to power up their hothouse. That is the sort of innovation that putting a price on carbon—and a realistic price—and setting that band that companies know that they have to respond to, that is exactly the example and sort of behaviour we're trying to drive within this scheme.

    Of course, under the previous administration, we had the unit price for carbon going down to $2 or $3 per unit, which sends no signal whatsoever. If we were allowing ourselves to open up, as we've heard previously, to those international units, the price would swing wildly and businesses would not know where they're going. So we do need to send those signals, and this bill does that.

    Of course, Jacqui Dean touched a lot on the farming side of things, and she didn't seem to quite understand—I saw that in the committee of the whole House stage—it's the He Waka Eke Noa, where the farming sector has come together and are designing their own scheme, which will kick in around 2025, that recognises that the issues for agriculture are different. In the main, we're talking about methane, which is a flow gas. There is some good reason for the industry to be able to have some more time to design that system so that it is fair and things like, maybe, riparian planting and sequestration from soil and things can be built in.

    I was at Invermay, just out of Dunedin—just by the way, this Government saved that sheep genomics team from being disbanded. I was looking at their sheep-breeding programme there and their methane-capturing boxes that they put the sheep in. They're breeding sheep that are more methane-efficient, and they're seeing some quite consistent lines in terms of room and size and how that plays out in terms of methane emissions. So there is good stuff happening. Jacqui Dean alluded to lines of cattle that they're now starting to identify. So genetics is a big issue.

    Feed additives—and, of course, the PGF, once again, has invested in the red seaweed processing, and that's showing some promise; as is the 3-NOP. We've got the vaccines that, of course, are being developed in a world-leading facility out at Massey, which is the international centre for developing vaccines. We've got grasses, of course, being developed with GE technology and fodder crop. So there will be some other tools there; whether we choose to deploy them or not is a matter for another day.

    But, also, there is some opportunity in this. If you're thinking of absolute production, I think that's where the National Party get let down a little bit in their agricultural space. It's actually about value. This Government's done a lot of stuff around trying to increase value. I actually had the Beef and Lamb New Zealand people in, this morning, giving a briefing on their Taste Pure Nature, country-of-origin Provenance brand that they're working with the industry to develop. It's been very successful so far; about a year in, and exceeding expectations.

    What a story we have to tell. We are leading the world on some of this stuff that I just outlined earlier. We have got a story that consumers will want to hear and will be prepared to pay a premium for. Our farmers can be proud of what they're sending offshore. From that side of things, there is incredible opportunity, and we should not shy away from that.

    So, I guess, when we were looking at it, one issue that we did have was some concern around, maybe, the lack of levers within this bill to limit forestry offsets. As Duncan Webb alluded to in his contribution, we do not want to have runaway forestry. We can't make forestry offsetting so profitable that it envelops large swaths of hill country; we absolutely understand the potential for that to happen if this gets out of control. So we do have to have that in there.

    Of course, there are the social and economic measures that the Climate Change Commission has taken into account. Minister Shaw has absolutely assured us that that is where that mechanism sits to place some limit should they be seen to be getting out of hand with the forestry offsetting, so we are watching that. Of course, there is a review coming up, and I think that's with the Climate Change Commission, and that's something that they will have to, I think, keep a weather eye on.

    Finally, this has been, as referenced earlier, an incredibly complex piece of legislation. I think it is six years in its gestation. So could I commend the officials that have been involved in this. It's been a herculean effort.

    Finally, the Minister, as well, Minister Shaw, for your efforts in this, you have used your adept political skills to, at least, get this side all together. I think, actually, if you asked them behind closed doors, the National Party want to support this too, but they have decided to take a political position, which is incredibly disappointing, given the importance of acting in this space. So congratulations, Minister Shaw, on getting this across the line, as it is a massive task. New Zealand First will support this bill through to law because it is, quite simply, the right thing to do. Thank you.

  • ERICA STANFORD (National—East Coast Bays): Well, Mr Speaker, if taking a political position by opposing this bill today is going to save Kiwis huge costs of living, potentially their jobs, then I'm happy to take that on. Mr Patterson has spent quite a bit of his speech today talking about Todd Muller, in fact, and his speech on Sunday. I'll tell you what Todd Muller did on Sunday: Todd Muller stood up for everyday Kiwis and what will be, potentially, the worst time of their lives, and what we are doing today is standing up for those Kiwis to make sure that their cost of living, their gas, their electricity, their basket of groceries won't be increasing at what will be the worst time in many of their lives.

    Now, look, listening to the Government speeches today, you would think, by listening to all their posturing today, that what they've done over the last three years has been some monumental effort at wrestling down our emissions, but the reality is, over the last three years, they've only gone in one direction—and it's not down, it's up. I'll tell you why that is. That's because they haven't put in place a single thing to wrestle down our emissions, not a single policy in place to do a single thing. Now, Minister James Shaw today was very cute when he came out and said, "I'll save you an hour of your time"—

    Matt King: He's cute!

    ERICA STANFORD: What he said was cute, I should say. "I'll save you an hour of your time and tell you what National speakers are going to say.", and he wasn't wrong. But his very flippant way of dismissing our point won't sit well with Kiwis who are now paying an extra 4c a litre at the pump, who are going to be paying more for their food, more for their electricity, more for their fuel, and watch their cost of living increase. His whole speech was so high and mighty, talking about eight years and ten years and the effect doesn't reduce, and every year of delay—and while he was saying all this, I was sitting here thinking to myself, actually: where have all the delays been in the last three years? The delays have been in the introduction of electric vehicles into this country. We had, what, about 87 electric vehicles in the Government fleet at the beginning of their term? I think we still have that exact same amount, despite their promises to increase that by a third or a half. They've done absolutely nothing in three years. You want to talk about delays? There's a massive delay.

    Shall we talk about delays in terms of the Green Investment Fund—the only thing that they won in the negotiations in creating this unholy mess of a Government? What happened to that? Not a single cent spent in the last three years. You want to talk about delays? Let's talk about the Green Investment Fund delays. All of those companies out there who are sitting waiting for that cash—nothing. We could talk about green tech investment—nothing. It's very rich from the Minister to talk about this side of the House, delay, delay, delay, when he's sat on his hands for the last three years and hasn't put in place a single policy that has had a real impact on emissions, and we have watched our emissions over the last three years grow and grow and grow. What he's done is set up a working group, and yep, we agree with him—that's great—but what has he done to wrestle down our emissions in three years? Not a single thing.

    And Chlöe Swarbrick, she yells from the other side of the House while Scott Simpson is talking. "Oh, so we're going to screw future generations?", she interrupts.

    Chlöe Swarbrick: I was asking, "What about them?"

    ERICA STANFORD: In the last Budget we just listened to, we've got $140 billion of debt for our future generations. You want to talk about screwing future generations? Let's talk about that Budget. And, by the way, in that Budget there wasn't even anything that was remotely going to help the environment, apart from a few jobs killing some wallabies—

    Chlöe Swarbrick: $1.1 billion.

    ERICA STANFORD: For shooting some wallabies? Awesome. Well, I'll tell you what in that Budget—nothing. There was not a single cent for electric vehicles. There wasn't any big increase of the Green Investment Fund, which we haven't even spent a cent of. There wasn't any hydro investment. There was nothing. Want to talk about green investment in our future? Well, that Budget was a massive fail.

    And Dr Duncan Webb, always my favourite—time for action! The time is now! In his very clever speech, full of Ds—

    ASSISTANT SPEAKER (Adrian Rurawhe): Come back to the bill.

    ERICA STANFORD: Name one thing—back to the bill, Mr Speaker, I will. I'll stop all my rebuttal. It's very easy because they get me so riled, but I will continue on with it. The advent of the global pandemic has changed everything. When we look at this bill, we need to look through a different lens. We're living in a different reality, and that reality for Kiwis is an increasingly difficult one. We've made it very clear at second reading that we cannot support the bill at this time. All we're asking for is 12 months so we can have a much better idea of what our future holds. The reason for this position is entirely reasonable. It's reasonable given the times we find ourselves in. We've got to look at the conditions that we're probably going to pass this bill in that we have today. It's important to do this, because this bill will increase the cost of living. It'll make things tougher for companies to operate in this country, it'll mean companies will shift offshore, it'll mean that we will import products rather than produce them here. Fuel costs will rise. A trolley of groceries—the cost of that will rise. Everything that is reliant on the transport sector will rise.

    The conditions of our new reality are constantly evolving, but so far we know we're probably going to lose 140,000 jobs by Christmas—the worst economic crisis in over 100 years, and it's a time when we are handing out billions in wage subsidies. And then there are more additional wage subsidies. Hundreds of millions in redundancy pay that the Government are paying. We're lending businesses more to survive, we're seeing benefit numbers swell, we've got charities and food banks that are swamped, we're fast tracking bills to spend hundreds of millions on shovel-ready projects. We are in uncharted territory, and for the most part, while we're COVID-free, the rest of the world is in a very different position. We heard Grant Robertson today say that—in question time, about the global downturn—we heard about the fact that this downturn is going to have an impact on our export revenue. And just how big is that hit? We don't know yet. But the effects of the lockdown on our economy mean that we're only just starting to feel the effect of that, and people are hurting.

    We're going to be spending, with this bill—without doubt—more on groceries, more on fuel, and more on electricity. The cost of living is going to go up. The Minister said today, and he's said also in committee stage, that he was OK with this because now is the right time. He's fine with that. Well, Todd Muller, Mr Patterson, and this Government—sorry, I should say this Opposition, soon to be Government—are not OK with that, because we're quite happy to stand up for Kiwis who are doing it tough out there. A lot more of them are going to be doing it a lot tougher in the coming few months. We're quite happy to stand up for them and say now is not the right time. We need more information, and a few months more so that we can get to grips with the true reality of this.

    I talked, certainly, in the committee stage about the removal of the fixed price cap. The cap was initially put on to make it more certain for businesses to operate—they had more certainty. We started at about $12.50 and it increased to $25, where it was sitting up until just recently, and this gradual increase gave businesses and the public certainty. But the changes in this bill, we've already seen, as Mr Scott Simpson pointed out: the cost is now up to $34 or something. What this does is just put more uncertainty and more cost on businesses at a time when businesses are trying to figure out whether or not they can even be in business, whether or not they have to lay off staff. This is the last thing that they need. We heard from a number of trade-exposed industries in select committee, and I spoke about them at committee stage, and they quite clearly said to us that this bill is not giving them certainty—in fact, quite the opposite. We can't imagine a world that we would live in without steel, aluminium, and concrete—all of those industries that create emissions. As much as James Shaw likes to get up here and tell us that, well, there are technologies and they're coming, well, actually, they're not here and they are costly and they are some way off. We have to protect our trade-exposed industries in New Zealand, because what we don't want to be doing is shifting jobs offshore and importing products that are going to be manufactured overseas in a much more environmentally unfriendly way with more emissions.

    Our policy was always not to phase out these free allocations of units until other countries in our region were doing a similar thing. Now, we are in a position with COVID where we are, for the most part—apart from today—COVID-free, but the rest of the world are doing it really tough, and I find it hard to believe that countries in our region won't be putting additional costs and strains on their high-emitting industries in times like this. So we will most likely be doing this on our own, and the Minister failed to, at committee stage, tell us how this would be beneficial to New Zealand and why these jobs and these industries just wouldn't be shifted overseas.

    These are uncertain times. We've only asked this bill be delayed for 12 months so that we can have a much better idea of the exact impact on our economy and on our people. And that is why Mr Muller—on Sunday—and the rest of the National Party are standing up for those Kiwis and those people who are doing it really tough.

    ASSISTANT SPEAKER (Hon Ruth Dyson): Before I call the next speaker, can I apologise to the member who's just resumed her seat? I omitted to give you the two-minute warning bell. It didn't impact negatively on you, but I apologise for that.

  • Dr LIZ CRAIG (Labour): Thank you, Madam Speaker. It's an absolute pleasure to stand in support of this third and final reading of this bill, because what this bill does is put in place a comprehensive framework that's going to allow us to meet our targets under the zero carbon Act. So without further delay, I commend this bill to the House.

  • Hon DAVID BENNETT (National—Hamilton East): It's an absolute disgrace from the Labour Party if they think that this is the best that they can put forward in this Parliament and can spend only one line on the bill—in an election year, one line on their flagship legislation. That truly shows what they believe in. They're not there for New Zealanders, and they're not there for the environment at all. They're only there for themselves and their petty place in this part of politics, and they do deals with the New Zealand First Party and the Green Party to make that happen.

    Marja Lubeck: Says the hoarder of toilet paper!

    Hon DAVID BENNETT: Is there something you want to say over that side of the House?

    ASSISTANT SPEAKER (Hon Ruth Dyson): Feel free to refer to the bill in passing, Mr Bennett.

    Hon DAVID BENNETT: Sorry, Madam Speaker. It's just that sometimes those interruptions from that member are quite valuable, and I was looking forward to another one today, but unfortunately we missed out on her valuable interruption to our debate.

    My colleague spoke very well in her speech and pointed out that this is about the cost of living on New Zealanders. And I see over there we have the Minister trying to be the Minister for Employment—or whatever he does—that understands—

    Marja Lubeck: Who are you?

    Hon DAVID BENNETT: Don't bring the Speaker into the debate, OK? Now, that member over there should be really taking and doing something for the people that actually need help out there. And he always talks in this House about looking after those people that are most vulnerable—those people that are at the bottom of the heap—and what are they doing here? Putting more costs on those very people. The very people that will become unemployed have to pay more. That is what the Labour Government is doing. The Labour Government is hurting businesses that are needed at this time to provide employment and opportunity for people to get out of the hole that we are in as a country.

    This bill is going to hurt farmers, who are going to be the backbone of the economic recovery for New Zealand going forward. And that really shows the problem that we have with the New Zealand First Party because the New Zealand First Party will come into this House and, over the next few months, will go around the country saying that they are the farmers' friend—this is their election campaign. They're nodding. That's what they're going to say: "Trust us and there will be none of these things happening." Well, if the New Zealand First Party was so thorough, so trustworthy, so dependable, they would not let that review clause be in this legislation. This legislation puts off the big decision around agriculture to next year. Where was Winston Peters and his protecting the farmers when this debate came up in Cabinet? Why didn't he stand up and say no to that clause? He didn't.

    Hon Scott Simpson: He was having a snooze!

    Hon DAVID BENNETT: No, I don't think he was asleep. Mr Peters is generally a very active member of that Cabinet. I'm sure he read every paper that was in front of him. But Mr Peters agreed with the Labour and Green parties. Mr Peters didn't stand up for farmers when he had a chance, and I say we can't trust the New Zealand First Party, the Green Party, or the Labour Party, because to put that in the legislation is because they intend to do it over time; they intend to bring agriculture into the emissions trading scheme (ETS). The only point they've put that in there is so that they can go around in election year and try and convince people to vote for them under false pretences, as they always have, because they've never been there for farmers, they never will be there for farmers, and they're only there for themselves.

    In fact, we heard from Mr Patterson—was it?—about trying to protect farming from forestry invasion, you know, and how he wanted to see a review of these things. They put the rules in place that created the forestry distortion that's out there in the agricultural sector. They created the exemption for forestry. They put the money into forestry, and now they're saying we're going to have a review at some point—the review that hasn't happened before the election, and a review that will never happen, because their dear leader has made a promise around a certain number of trees that have to be planted. And I say to the Government parties—and they'll laud this agreement with the agricultural sector and say that they came to some agreement—if they really stood behind an agreement, there would be no need for that sledgehammer that could come down next year. If there was agreement with genuine, binding interests, there wouldn't need to be any of that in this legislation. The reality is—and we know what the reality is—that there is no genuine agreement on that side of the House to partner with farmers and farming organisations. It is only being used—it is only being used—by those parties to try and mitigate at this point in time.

    The Green Party will shake their head. Now, the Green Party came into this House many years ago, when they were in Opposition, and told us how principled they were—how everything they did would be based on principle. And I've got to give James Shaw credit; he was probably the best Minister I've seen in answering questions in the Chamber during the committee stage on this bill. He did it in a very good way, but he didn't answer the questions and he didn't give the full facts. The full facts are that the dairy industry had been the one industry that never got those entitlements that other major industries got from day one. The New Zealand dairy industry has been paying from day one, for 15 years, and I know James Shaw had to check that with his officials, and he found it was true, because he didn't know that at the time that he was speaking in the committee. The dairy industry has been paying. They have been paying over all those years, when all those other major industries have had a free ride. And now, on top of that, they're going to be told that they're going to be brought into the ETS as farmers as well. It's not fair.

    There is no independent audit process that the Minister talked about; that is just an illusion. All we have is a commission—a commission that is appointed by the Government, a commission that will make its decision—and this will not be an independent audit process as to how well farmers have done. This is purely a political decision that will be made by the Green Party, the New Zealand First Party, and the Labour Party pre-election. After the election, the National Party will take a different approach. We will look at science and practical things that actually work, and we will be there to work alongside the businesses and farmers of New Zealand, because everybody understands that there are goals that need to be achieved. Our markets have moved, our consumers have moved, our public have moved, but we need to move with them as an industry, in a way that we can do that, and that is the secret to get that balance right. And that's what the National Party wants to see in this field, and we wish that the other parties would do that.

    If they really did trust those producers out there, that they now are so happy to see producing to keep this country alive, if they really trusted the people that they are so indebted to at the moment to pay the bills, why then did they create a playing field which is uneven and creates a situation where there is uncertainty on those businesses and those farmers? Those businesses and farmers face uncertainty every day in the weather. They face uncertainty every day in their international prices. They do not need a Government putting more uncertainty on them. What they want from a Government is a plan that is practical, reasonable, and achievable under science-based mechanisms. That's what they want, and that's what they demand, and instead what they have got is a political power play which holds off the big decisions for next year and, in the meantime, tries to distort our economy and put more costs on those very people that are the most vulnerable in our community, and that is a shame on the Labour Party, and all they can say is one sentence in response to this bill.

    ASSISTANT SPEAKER (Hon Ruth Dyson): The next call is a split call. Jamie Strange

  • JAMIE STRANGE (Labour): What a negative speech over there, and I think that highlights why that party is in Opposition and this party is in Government, because we're aspirational about the future. I commend this bill to the House.

  • Hon NATHAN GUY (National—Ōtaki): Thank you, Madam Speaker. I was waiting for that member, Jamie Strange, to finish off his contribution by saying "be kind", because that's certainly the mantra that we're hearing over the other side of the House at the moment. What a very weak contribution from that member, from—where is he? Hamilton? I think he's on the list. [Interruption] Oh, Waikato, Waikato. You would have thought that his constituents up there in the mighty Waikato would have wanted to have heard from him about this very important bill—very technical—and Mr Strange I would have thought wanted to tell his constituents that this bill is a very long and complex bill. In fact, it's two parts: it's a bill itself and a Supplementary Order Paper.

    We debated this through the House recently, 724 pages. It's a massive bill. [Interruption] I'll get on to the trees in a moment, Mr Webb, that you're so keen to see engulfing rural New Zealand. There's a few of them here that have been harvested and when there are mistakes in this bill, it'll all come back to haunt you because you were the chair of the select committee and you like to think that you were across all of the detail—

    ASSISTANT SPEAKER (Hon Ruth Dyson): Feel free to leave me out of the debate. You've been here a while. You know that you're not allowed to bring the Speaker into the debates.

    Hon NATHAN GUY: Yes, Madam Speaker, I didn't mean to bring you into the debate. Thank you for reminding me. I was actually just alluding to the fact—not you, but the chair of the Environment Committee, which is Mr Webb.

    What I also want to talk about is James Shaw, the Minister for Climate Change, because when we went through the committee stage—I want to commend him for the fact that he answered questions incredibly well. In fact you, Madam Speaker, were in the chair at the time and you also nodded just then. So I just want to have a token of appreciation through to the Minister to say that thank you for enduring to answer all of our questions on this side of the House. I felt that the debate as part of the committee stage was fulsome. We learnt a lot from your answers and actually a couple of times you referred to your officials and I want to acknowledge them and the work that they did through the select committee. I just feel that this bill, being so technical, deserved to have some more time through—not the committee of the House, but we met through the COVID lockdown and it's pretty hard, when you have a bill of this detail and magnitude, to be able to actually understand it via a computer screen.

    This bill underpins the zero carbon bill. This is really where the rubber hits the road. I've already mentioned that this is a very complex and technical bill and it wouldn't surprise me, because it has been rushed through the select committee, that there will be errors. At some point it will be back into the Parliament to make some changes. I hope there isn't, but it wouldn't surprise me. Having been here 15 years, I know from time to time when bills are rushed through a select committee process, they have to come back into the Chamber to be tidied up.

    There's three important aspects of this bill that I want to talk about this afternoon in its third reading. The first one is the impact on agriculture, the second one is the impact that it's going to have on consumers here in New Zealand, and the third part, importantly, is the impact that this bill will have—and we're already seeing it play out in rural communities—with the billion tree programme.

    So the first point is the impact on agriculture and I was pleased to see that the agriculture industry stood up and said, "Let's work together with the Government.", and they came up with an accord that meant that there isn't going to be a tax at processor level because that is not going to change behaviour inside the farm gate. It will just be a crude measure that won't change any behaviour. As a result of that, Government worked alongside industry and said, "Yes, the accord is a good measure." But probably those that signed up to the accord in the agriculture industry didn't realise that there was a part that was slipped into this Supplementary Order Paper that says, "Hold on, if farmers and industry leaders don't do what they say in farm environment plans by 2022, the Minister for Climate Change and the Minister of Agriculture will basically have the power to enforce a processor levy on farmers at that point in time—in 2025." That is not going to change behaviour from one farm that might be doing the right thing to the other farm over the boundary fence that is not doing so well in terms of the environment.

  • ASSISTANT SPEAKER (Hon Ruth Dyson): Your time has expired. Thank you.

    Hon Nathan Guy: Madam Speaker.

    ASSISTANT SPEAKER (Hon Ruth Dyson): So—

    Tim van de Molen: I raise a point of order, Madam Speaker.

    ASSISTANT SPEAKER (Hon Ruth Dyson): Sorry, were you doing a point of order, Mr Guy, or—I'm confused.

    Tim van de Molen: I am doing a point of order.

    ASSISTANT SPEAKER (Hon Ruth Dyson): The clock's on zero, but Mr Guy was calling as well.

    Tim van de Molen: Well, I have called a point of order.

    ASSISTANT SPEAKER (Hon Ruth Dyson): Point of order.

    TIM VAN DE MOLEN (Third Whip—National): Thank you, Madam Speaker. The issue we have here is that it was a split-call called. Because Mr Strange's contribution was only 15 seconds, Mr Guy is entitled to the balance of that time, and whilst you had five minutes on the clock, actually, he is entitled to a full nine minutes and 45 seconds for his contribution.

    ASSISTANT SPEAKER (Hon Ruth Dyson): What Standing Order is that?

    TIM VAN DE MOLEN: That's Standing Order 48/3. The last line is of particular relevance: "the next speaker gets the balance of the time."

    ASSISTANT SPEAKER (Hon Ruth Dyson): Can you tell me again what Standing Order you were referring to?

    TIM VAN DE MOLEN: Sorry, it's Speaker's ruling 48/3, by Speaker Mallard in 2017, and Mr Guy has a very comprehensive contribution to continue making in this instance, I'm sure.

    ASSISTANT SPEAKER (Hon Ruth Dyson): Your interpretation of it has never been the way that it's been interpreted for my brief time in this House. My reading of both the Speaker's ruling that you refer to and the Standing Order, which is Standing Order 121(2) is that that time can be allocated in the way you describe if it's by agreement, and you'll know that on contentious issues there is often a 10-minute call split by agreement. That isn't the case. In this instance, there's five minutes allocated to each speaker, and the Hon Nathan Guy has used up his five minutes.

    Hon Nathan Guy: Point of order.

    Tim van de Molen: Madam Speaker—

    Hon Nathan Guy: A point of order—Tim.

    Tim van de Molen: —it's very clear—

    ASSISTANT SPEAKER (Hon Ruth Dyson): Could you guys work it out which one's going to call for a point of order? It's too hard for me to choose.

    TIM VAN DE MOLEN (Third Whip—National): Well, thank you, Madam Speaker. It is very clear that Speaker Mallard ruled that is the case—the next speaker gets the balance of the time. There is no mention in it whatsoever about a requirement to have agreement on that particular point.

    ASSISTANT SPEAKER (Hon Ruth Dyson): There is a process for challenging the Speaker's determination, and the way that you are doing it is not appropriate. Is there another speaker?

    Hon NATHAN GUY (National—Ōtaki): I raise a point of order, Madam Speaker. I seek leave of the House to finish my contribution in the next four minutes and 40 seconds.

    ASSISTANT SPEAKER (Hon Ruth Dyson): Leave is sought for that purpose. Is there any objection? There is objection. Are there any further speakers?

  • JO LUXTON (Labour): Thank you, Madam Speaker. It's a pleasure to stand and take a short call on this piece of legislation. Can I begin by commending the Hon James Shaw for bring this piece of legislation to the House and shepherding it through. I would just like to finish off by saying everything that I would like to have said has been said, and so I commend this bill to the House.

  • ANDREW FALLOON (National—Rangitata): Well, thank you, Madam Speaker. I suppose the pressure is all on me now that, unfortunately, Nathan Guy could not finish his contribution. I, unfortunately, didn't sit on the select committee that considered the Climate Change Response (Emissions Trading Reform) Amendment Bill, but I have enjoyed listening to the debate this afternoon and, indeed, I enjoyed a lot of the committee stage as well. I just want to echo my colleague Nathan Guy's comments in relation to James Shaw throughout that process. He sat through, I think, all of it and answered a lot of questions that we had on this side of the House, and I'd like to commend him for that.

    But I just want to run through a couple of the contributions that we've heard from the other side this afternoon, and the first one of those that I heard was from Duncan Webb. Duncan Webb, I thought, made an interesting contribution when he said "Forests are not the way to a carbon-free future."—forests are not the way to a carbon-free future. I thought to myself: well, tell that to Shane Jones. Tell that to Shane Jones who, as Minister of Forestry, has led an overseas investment on a scale that's unprecedented in terms of forestry investment to specifically invest solely in forests, for more forests in New Zealand. And I'd like to ask that member, and perhaps we can catch up afterwards about it, about what it is or why is it that he thinks that if forestry should not be the future for a carbon-free future, then why is it that we're seeing so much new forest go into places like the Wairarapa? Why are we seeing new forests go into places like Marlborough, where there has just been a sale recently for more forests to go into Marlborough?

    He also touched on an interesting point, I thought, where he said, in his argument against delay, that we shouldn't delay because technology is happening. Well, I actually agree with him on that. Technology is happening, but it's not here yet, a lot of it. There is a lot of fantastic stuff happening, and some of those things have been touched on in the House this afternoon. One of those is around a higher-fat ryegrass. Another one of those is around an algae or seaweed which has the potential to reduce methane emissions amongst cattle. Those things are really, really positive. But the problem is that those things haven't happened yet. They're not out there on our farms happening now, reducing those emissions.

    So the problem that we have on this side of the House with this bill is that you're leaving farmers in a position that they cannot escape the additional cost. They can either decrease their herd sizes. They can decrease productivity. They can, I suppose, do less and that will mean that more people around the world will go hungry, or it'll mean that other nations around the world increase their productivity, and I'll come back to that in a minute.

    Now, the problem with that is that if you're not giving farmers a pathway, all they're doing is putting a higher cost or lower production. And the problem with lower production, if all we're doing is exporting that food production around the world, is that's actually going to cause higher global emissions, because, if members opposite hadn't realised, although we have relatively high per capita emissions in the world, we actually have very efficient farming processes in this country. So it means that if we produce less food—at the moment, we produce enough food to feed about 40 million people around the world—and that food production is exported around the world, less efficient farmers will be producing it, and that means that global emissions will go up.

    The other problem we have with it is that it'll make New Zealand poorer. So if we're producing less, if we're exporting that production around the world, it'll mean that we here in New Zealand are earning less from what we produce, and that's being talked about in the context, this afternoon, of potentially 140,000 or 160,000 job losses. That was a point that Duncan Webb touched on when he talked about: why delay—why delay? Well, the argument, actually, Duncan Webb, is because we are in unprecedented economic circumstances—unprecedented economic circumstances—where Treasury project that we'll lose between 140,000 and 160,000 jobs around the world.

    So I ask members opposite: where will those jobs come from? Where will those jobs be created—those between 140,000 and 160,000 jobs projected to be lost by the end of the year—

    Hon Nathan Guy: That's here in New Zealand.

    ANDREW FALLOON: —where will those jobs—exactly, that's here in New Zealand. Where will those additional jobs be created?

    Hon Nathan Guy: Wilding pines.

    ANDREW FALLOON: Because it's not actually all—well, wilding pines. Potentially, wilding pines are an option. Wallabies, of course, and I was a bit disappointed about Chlöe Swarbrick's views on wallabies, actually, because I thought they were these, you know, cuddly animal welfare advocates, and, of course, these wonderful creatures down in Waimate—I'm sure my colleague Jacqui Dean won't agree with me, of course, because they are, unfortunately, a massive pest in the area. But here's the Greens putting up these green jobs, these wonderful green jobs, to go out and destroy wallabies, which I found a bit disappointing from Chlöe Swarbrick.

    James Shaw in an earlier debate—I think it was in the committee stage—was quite disparaging of National's position, which was, of course, to delay the provisions in this bill by 12 months. He said that the position of delay could be made at any point in our recent economic history. That was, essentially, his point. I think I've summarised that accurately. That says to me, actually, that he doesn't quite understand or fathom the unprecedented economic circumstances that we currently find ourselves in, because, of course, maybe 10 years ago, maybe 20 years ago, if people had called for delay, then that might have been unreasonable, but now it's not. Now it's absolutely not. We are losing—

    Hon David Parker: And it's not, and it was the same party.

    ANDREW FALLOON: We are losing, Mr Parker, between 140,000 and 160,000 jobs out of the New Zealand economy before the end of this year and you are talking—

    Hon David Parker: No, we won't.

    ANDREW FALLOON: You are talking, Mr Parker, about—

    Hon David Parker: What a doomsayer.

    ANDREW FALLOON: —about—well, I'm sorry. They're the Government's own projections from Treasury that 160,000 jobs will be lost before the end of this year. They're the Government's own projections.

    Hon David Parker: No. The member missed question time.

    ANDREW FALLOON: If you want, Mr Parker, to contradict those, if you want to come up and say that they're wrong, if you want to say that Treasury are wrong, you're welcome to do so, but they are the Government's own numbers.

    Now, Chlöe Swarbrick called out earlier in the debate that we are opposing this bill. She said that it's opposition for opposition's sake. Nothing could be further from the truth, Ms Swarbrick. We stand for jobs, we stand beside farmers, and we stand in support of the economic contribution that they make. And the reason I make that point is because I was talking to a friend of mine recently who's about to lose his job, unfortunately. He said, "I was looking in the paper and every job that was available was on a farm." Every job that was available was on farms. And he's the sort of guy—he's a pretty practical guy—who'll probably go out and get a job on a farm. Good on him for doing that, but there's a lot of people out there in the position that won't be able to do that.

    For a long time to come, probably for at least the next 12 months, we're going to be in a position where tens of thousands of New Zealanders are losing their jobs. Unfortunately, the Government's not creating the jobs, doesn't have a plan to create jobs, and a lot of the jobs that exist are on farms. And the Government's response to that—or at least the Green Party's response to that—has been "Oh, but what about green jobs? What about green jobs?" Well, I'll just ask the Government this. They've been in Government for nearly three years. Where are those green jobs? Where are those green jobs that they said they would create? Where are those green jobs that will employ between 140,000 and 160,000 New Zealanders before the end of the year? I'll tell the Government members opposite: they don't exist. The jobs that exist right now are on farms. They're on dairy farms, they're on crop farms, and they're on pig farms. They're on farms all across this country and it's that industry that can take up the slack. It's that industry that can get out there and employ people.

    This bill has the potential to cause great harm. This bill, all it does to farmers is it sticks them with more cost—sticks them with more cost—and if you talk to any business owner, any farmer about where they will pull that cost back from, it tends to be staff, because a lot of our farmers are price takers. Mr Parker knows this. A lot of our farmers are price takers. They can't just stick another dollar, stick another $2, on the cost of what they produce. For a lot of them, if they have to pay out another $100,000 a year, another $150,000 a year, what it means for them is fewer people on their farm employed—fewer people in their business employed. That's what this bill has the potential to do: to lose those jobs, to lose those jobs that we're going to need over the next 12 months. For that reason, we oppose it.

  • CHLÖE SWARBRICK (Green): E Te Māngai, tēnā koe. Tēnā koutou e Te Whare. It is a pleasure to rise as the second Green speaker on this Climate Change Response (Emissions Trading Reform) Amendment Bill. I just want to refer to that final speaker who has just taken his seat—Andrew Falloon, who I have a lot of respect for across the House—and the fact that he quoted "unprecedented economic circumstances", which is something we've heard a lot about recently. I want to ask Mr Falloon and the rest of his National Party colleagues whether they have heard about climate change because what we have here is a situation where insurers are backing away from South Dunedin homes and insuring those. They should talk to farmers about the increasingly unpredictable seasons that they are facing as a result of global warming. Or in fact, they should just speak to experts. We'll just look at the data around mass migration or exacerbation of conflict driven by droughts and famine by climate change.

    The Climate Change Response Act 2002 is the same age as this year's new voters. For 18 years, for their whole lives, they have had a dysfunctional law which has allowed emissions to rise and our planet to warm. This Act first came into force 18 years ago to ratify the Kyoto Protocol, which was built on the agreements from a whole 10 years before that in 1992 called the United Nations Framework Convention on Climate Change, or UNFCCC for short, which committed countries around the world to reduce greenhouse gas emissions. The Kyoto Protocol of 1997 accepted, firstly, that global warming was happening. And secondly, that, and I quote, "It is extremely likely that human-made CO2 emissions have predominantly caused it." The Kyoto Protocol recognised the basic premise of common but differentiated responsibility. That is that we all share the same atmosphere, but different countries have contributed different amounts to its warming and have a differing ability to change that. Many so-called developed countries have built their wealth off of the exploitation of our shared natural environment and therefore have a greater responsibility to draw down our carbon activity. It was not then immediately clear how we would go about drawing down this carbon but, as a wealthy country, Aotearoa New Zealand had an international obligation, and we recognised that in law.

    Six years later, in 2008, the final year of the Clark Labour Government, the emissions trading scheme was introduced into this legislation by amendment. The emissions trading scheme was meant to be that "how" part of the puzzle. It's basically a market which puts a price on the limit of carbon. It prices what economists call externalities, allowing companies to factor in the real cost of their commercial activity. It was an attempt to mitigate, or at least try to end, the privatisation of profit and socialisation of cost—money made off the back of grabbing scarce natural resources through pollution and that everybody else collectively paid to clean up. But then there was a global financial crisis and, in 2008, a change of Government.

    The first action of that new National Government in the climate change sphere was to expand a programme of what is called free allocation. Free allocation is something that many people a whole lot smarter than myself—researchers and experts, a whole lot more informed than many in this House—have spilt a lot of ink on. But the simple explanation is this: the emissions trading scheme means that polluters pay for their pollution, and they are limited in how much pollution they can produce. But unfortunately, this story is, of course, not that straightforward. It's actually probably rather reflective of the lobbying power of those already wealthy and powerful, but their arguments that they shouldn't pay for their pollution were reflected in a concept of free allocation. It gives our most polluting industries an allocation of those emissions trading scheme units for doing nothing except exorbitantly polluting, supposedly so that they can be incentivised to reduce that polluting. That is not a just transition. It is corporate welfare. But after being elected, the 2008 National Party Government froze that annual generous grant of free allocation, which was originally supposed to be a sinking lid. It meant that even as technology developed and industries got more carbon efficient and, thankfully, began producing less carbon, they continued to get the same free ride. So even the National Party, who so often invoke the free market, should know and recognise that that is a messed up and significant market distortion.

    I am incredibly proud of the work that our Green climate Minister, James Shaw, has put into fixing this. We are thawing free allocation from National's attempts to freeze it in time, and we will be wrangling it down. This is just the latest in a huge series of work that the Greens in this Government have undertaken to mobilise Aotearoa's potential for climate action. It builds on decades of advocacy, activism, and mahi of community leaders and of scientists. Firstly, with regard to this, our Green Minister, James Shaw, put the 1.5 degrees Celsius target of warming into this very Climate Change Response Act. We created the independent Climate Commission to hold us to account on that path. We've committed to carbon budget every five years as a stepping stone to that carbon neutrality. This is just another critical step in recognising that the economy exists within the environment, jobs happen on the planet, within the atmosphere.

    Many have noted that we are in the midst of the greatest global economic downturn in generations. But for a long while before that, we recognised that the system was already broken. We do not fix that by going back to business as usual, and we sure as anything do not fix it by going back even further than that. The National Party have banged on a lot in their contributions today about the potential debt that future generations will carry as a result of the necessary investments, which I note they haven't proposed an alternative to, that this Government is making right now. But out the other side of their mouths, they are willing to steal from those future generations breathable air, clean water, and a stable climate just to kick the can further down the road. And at what cost? [Interruption] When do the excuses run out, Mr Bennett? It has been 38 years since the UN Framework Convention on Climate Change and last year, during the reading of the zero carbon amendment on the same Climate Change Response Act that we are amending today, the now leader of the National Party, Todd Muller, heckled me for pointing out the disconnection between this House and the lives of those that we are making decisions about right now. My response is well documented.

    The kids born alongside the Climate Change Response Act 2002 are this year celebrating their 18th birthday. Many of them have marched in the streets in their tens of thousands, calling for stronger climate action for a stable and predictable future. And now they have a vote and they will shape our democracy. And they are watching.

  • A party vote was called for on the question, That the Climate Change Response (Emissions Trading Reform) Amendment Bill be now read a third time.

    Ayes 63

    New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

    Noes 57

    New Zealand National 55; ACT New Zealand 1; Ross.

    Bill read a third time.