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The Kyoto Protocol And New Technology

Hon Pete Hodgson Speech Notes

[Address at opening of new landfill gas electricity generation plant, Whitford Landfill, near Manukau City.]

I’m always saying the Kyoto Protocol is essentially about new technology. This generation plant is an example of what I mean.

Until now, I understand, the gas produced by this landfill was flared off. That was better than just letting it escape, because converting methane to carbon dioxide by setting fire to it reduces its greenhouse impact. Methane has more than 20 times the greenhouse potential of CO2.

But that flare was energy going to waste, in a country that already wastes far too much energy. Waste Management New Zealand [WAM] is now making the smart and obvious move of capturing that energy and I congratulate them for that.

WAM haven’t done this for the sake of gaining my approval, however. They’ve done it because it makes good economic sense. Making efficient use of energy always does.

The Kyoto Protocol will change our energy use habits for good, by accelerating the shift away from finite fossil fuel resources and encouraging more efficient use of fossil fuels while they remain important. The countries that ratify the Protocol will be those where the sustainable energy technologies of the future are most rapidly developed and adopted. The Kyoto stragglers will risk being spectators to growth and innovation elsewhere.

I sometimes think our business community has not yet fully realised that the Protocol embodies the kind of market solutions to an environmental problem that business leaders so frequently call for. These market mechanisms will give Protocol nations, and businesses within them, significant flexibility and choice in how they manage their emissions.

I am determined to alert more New Zealand businesses to the opportunities Kyoto offers. They will include the uptake of climate-friendly technologies, as we’re seeing today, but also the development of such technologies, the supply of emission reduction services, and the market for technologies and services that will improve energy efficiency.

The Government and the New Zealand Business Council for Sustainable Development — of which WAM is a member — are cooperating on a climate change project to identify more specifically and usefully the business opportunities of a post-Kyoto economy. Stage one, to be done by July, will identify the opportunities and stage two, beginning in August, will be about promoting them.

The project will also help businesses understand and minimise their greenhouse gas emissions, using an adapted version of greenhouse gas accounting and reporting protocol developed by the World Business Council for Sustainable Development and the World Resources Institute. Participating companies will begin reporting against emissions reduction targets later this year.

Of course one of the things business needs if it is to anticipate the post-Kyoto economy is some certainty about the policy environment it will be operating in.

I am pleased to be able to say that we in government are making significant progress towards a clear preferred policy position. I expect to be able to make that public in April, with another comprehensive round of public consultation to follow.

Yesterday I announced a set of key principles, recently adopted by Cabinet, that are guiding policy development.

They include, importantly, the principle that policies need to be consistent with a growing and sustainable economy. Besides the commitment to promoting the economic opportunities in climate change, this clearly implies the need for policies that recognise the importance of maintaining the global competitiveness of New Zealand industries.

Another important principle says policies must be responsive to the changing international context for action on climate change. This is a global problem we are dealing with: the Protocol is an international solution and New Zealand must always be alert to the relationship between domestic and global measures.

One implication of this principle is that our policies must recognise some immutable uncertainties about the future, including changes in our emissions profile, in technology, and the international environment. Our policies will be adaptable and flexible, recognising the need for business and others to be able to accept them and respond to policy changes.

A transitional, staged approach will give affected emitters time to adjust. A transitional approach is necessary for another, self-evident reason: the Protocol is not yet a global agreement. Some countries are in and others are not.

That means our policies must lock in Kyoto’s many opportunities as early as possible, but properly address issues such as carbon leakage that are economically and environmentally costly.

The simple message is that this government is not interested in extreme policies that would harm our economy.

The Prime Minister began the Parliamentary year this week by setting out our commitment to promoting economic growth by promoting innovation. I’m arguing that ratifying the Kyoto Protocol is absolutely consistent with that commitment.

I’m grateful for the invitation to see a project that illustrates the connection between Kyoto and innovation so well. It’s a pleasure to declare this plant open for business.


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