Dr KENNEDY GRAHAM (Green) to the Minister for Climate Change Issues: How did he meet his obligations under the Climate Change Response Act 2002 to maintain the proper functioning of the ETS when he directed the issuing of 30 million additional New Zealand Units?
Hon SIMON BRIDGES (Acting Minister for Climate Change Issues): The Minister set this out in the ministerial statement he made accompanying the direction to issue New Zealand Units, both of which were tabled and gazetted in accordance with the Act: “The proper functioning of the NZ ETS requires the issuance of sufficient NZUs to meet entitlements of post-1989 forestry participants; any entitlements under an allocation plan; and any auctions of NZUs the Crown undertakes.”
Dr Kennedy Graham: Given estimates that there is a current supply of some 85 million New Zealand Units while annual demand is around 15 million New Zealand Units, how can he justify issuing 30 million additional units?
Hon SIMON BRIDGES: I would have thought that the Greens were sympathetic to printing off more currency, given that that is their current policy. But the fact of the matter is that I am obliged to ensure the Government has enough New Zealand Units to meet certain legal obligations, so that is what I do.
Dr Kennedy Graham: Does the Minister believe that issuing 30 million more units will increase the price of New Zealand Units, which are currently trading at around $2; if not, how will the additional units incentivise decarbonisation of our economy, in particular, the disincentive to foresters, which is the rationale that is adduced?
Hon SIMON BRIDGES: I am not a soothsayer, so I cannot predict what prices will do. The fact of the matter is our emissions trading scheme is working well. What the member asks about is a product of a very low international carbon price. We believe in this country that we want New Zealanders to do their fair share—not to be paying above that.
Dr Kennedy Graham: How is having a carbon unit worth $2, which is actually lower than the international price in Europe, meeting his ministerial obligations under section 68 of the Climate Change Response Act to maintain the proper functioning of the emissions trading scheme, given that our gross and net emissions continue to rise?
Hon SIMON BRIDGES: The member clearly was not listening. As I said, we are committed to doing our fair share. That means working at not trying to have policy settings above the international price. Actually, the member is wrong. I think he will find international prices are much lower than he suggested. That is the situation they are in today, but it would be a brave person who tried to bet the bank on what the prices may be even a couple of years into the future.
07/11/2013 – 00:00