Thumbs down on emissions trading

Two radio stations have mentioned the Stuff poll today so the message goes beyond internet land.

71 percent of respondents are opposed to the government's emission trading scheme.

So is ACT.

A party vote was called for on the question, That the Climate Change (Emissions Trading and Renewable Preference) Bill be now read a first time.
Ayes 119 New Zealand Labour 49; New Zealand National 48; New Zealand First 7; Green Party 6; Māori Party 4; United Future 2; Progressive 1; Independents: Copeland, Field.

Noes 2 ACT New Zealand 2.

This is Rodney Hide's contribution at the first reading;

RODNEY HIDE (Leader—ACT) : I know that Mr Harawira worries about the quality of the speeches given under urgency, but I say that the speeches on this bill have been excellent.

On behalf of the ACT party I feel as though I need to offer an explanation, because I believe that we will be the only party voting against this bill. Let me explain. I first became aware of the possibility of anthropogenic effects on the world’s climate, I believe, in 1972. There was some debate then about whether the earth could be possibly warming or cooling, and certainly there was a possibility of an effect of industrialisation and its impact on world climate. Subsequently, the consensus emerged in the late 1970s, interestingly, that the earth was cooling as a consequence of human actions. Indeed, because of my interest in such matters I went on to do a master’s degree in ecology and environmental science, and indeed lectured in environmental science for many years, and did a master’s degree also in resource economics.

Over that time a lot of scares came along and obliterated the concern people had about the possibility of human impact on world climate. These scares have come and, thankfully, gone. I am mindful of Mr Peter Dunne when he was speaking, and alarming the House about Y2K. The scare now of course is global warming, or in fact as it has now been called, climate change.

It is a worry, of course, because we are having such a large impact on the earth, and it is a worry in a host of complex ways. New Zealand is a trading nation, and the perception of New Zealand and our markets is crucial. So whatever we might think of the science, we have to be good environmental citizens. I use the word “good” not in an objective, scientific way, but in a way to justify ourselves to the very peoples we want to be selling our products to in order to maintain our access, and, more particularly, to win a preference for New Zealand goods and services. It is good that New Zealand maintains and extends its green image, and I fully support that.

Let me just run through why we are opposed to this bill. I think essentially it is that we do not want to be running ahead of the rest of the world. If we are going to constrain carbon emissions in New Zealand, it is going to be a huge cost on New Zealand. I find it interesting that not even a rudimentary cost-benefit analysis has been done on the scheme. I notice with some interest that the National Party leader, John Key, said “Oh, by 2050 we’re going to reduce what emissions were in 1990 by 50 percent.”, which is a huge stretch. It would constrain enormously New Zealand’s capacity to produce, and divert resources out of current industries from which we make a great deal of money into those that are not even on the horizon. It is hard to imagine how New Zealand could possibly meet that goal. Even holding the level of emissions has proved impossible for this Government. We can set these worthy goals without thinking about the costs, but if we are going to hold down carbon emissions it will be a huge cost on the economy, and indeed a huge disruption to the economy. So members should make no bones about it; this is a big issue.

The second point I will make is that although there is some debate about the science, I think a good working place for politicians to start is the Intergovernmental Panel on Climate Change. We can all point to that and say that, yes, this is where—I guess I am saying—there is scientific consensus, but we all know that science is not run by consensus; it is run by facts. Yet as politicians we have to come up with a response, and that is a good place to start. I should point out that that is a political response. The science does not tell us what we should do. At the end of the day it is going to be politicians, not scientists, who have to decide what the response is to any environmental scare or threat. As limited as we are in many people’s imaginations, it is hard to think of any other route whereby there can be a response, other than a political one, to the questions and issues of science and, in particular, of the environment.

When we look at it, certainly the alarm statistics we were having some years ago have somewhat diminished, so it is less scary than it was. We are talking a long time frame—a hundred years, a temperature rise of 2 or 3 degrees over a hundred years. But a lot can happen in a day, a lot can happen in a week, a lot happens in a year, and a heck of a lot will happen in a hundred years. For example, the Western World will probably be three times richer per capita. Poorly developed countries will be eight times richer per capita, hopefully, if they pursue good policies. So the world will be a richer place, it will be a different place, and it will be a technologically advanced place compared with what it is now. So the sorts of things that we are worried about—about where we are going—are quite something.

Let us think about temperature. There are a lot of cold countries in the world. Finland is cold, and it is a very successful economy. I guess its average temperature must be zero degrees or 5 degrees. If we look at Singapore, its average temperature must be jolly hot, and the temperature range between Singapore and Finland is far, far higher than any change we are talking about for the world, even in the worst case scenario from the Intergovernmental Panel on Climate Change. That is the point that I would like to make in this speech. The amazing thing about human beings and modern society is our ability to adapt to our environment and, indeed, our ability to change our environment, which is what we are debating here. All this alarm that we have that we must stop climate change, and that we must stop carbon emissions, escapes the point that we can adapt to changes. We can adapt to somewhat higher water levels; of course we can. We have adapted to far worse. We can certainly adapt to different temperature regimes. Human beings demonstrate that. We can succeed in cold environments and warm environments. Yet the suggestion is that somehow some change in temperature would be a calamity. Actually, the facts do not bear that out. So my view on the science is that we should just be a bit cautious and a bit sceptical, particularly in our response.

I know that Jeanette Fitzsimons said that this bill will have an almost negligible effect on New Zealand’s carbon dioxide emissions. That is absolutely true. This bill is a political thing so that Parliament, the Government, and the political parties can say they are doing something. But the actual impact is quite small. It goes nowhere to meeting the commitments that Labour and National have signed up to; all it does is set up a soft regime. That is another point about this environmental trading scheme.

Here is my worry about it. I was involved on the side, as an academic, in setting up the quota scheme for the fisheries, so I know something about setting up market schemes. I heard Dr Nick Smith say that we need to incentivise in pricing, and I think that that is true. But what we are doing here, I think, is setting up a scheme that will be a potentially corrupt scam worldwide, because what is being traded is an odd thing—the ability to emit carbon dioxide, and eventually other greenhouse gases, I guess. Countries that are crooked will be involved, and companies that are crooked will be involved, and they will be trading in these emissions.

There will also be people sitting on property rights that are made valuable simply because of legislation such as this. They will defend those rights to the death, lobby politicians, and say: “No, you can’t do that.” We have seen that already in New Zealand with the forest owners. They said: “We thought we were planting these trees and that we’d own these carbon credits.” I think the potential for abuse and corruption on this is massive. I agree with Jeanette Fitzsimons that this is a very second-best solution. We can achieve Nick Smith’s goal of incentivising in pricing by a tax. The virtue of a tax is that it does not create a property right or therefore a political lobby group that will be arguing around that. In fact, a tax creates a lobby group that says: “Is this a good thing that we should be doing—paying this tax?” But the lobby groups will be huge on this bill when it goes through the committees, and over time.

It is a great thing to be part of the ACT party. We are just two MPs, but we have two votes against this scheme.