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English Speech To Kyoto Protocol Business Summit

Hon. Bill English speech to the Kyoto Protocol Business Summit, EMA (Northern), Auckland, 20 February 2002

The Kyoto Protocol -- Should New Zealand be standing out in the cold alone?

Address by Hon. Bill English, Leader of the Opposition, to the Kyoto Protocol Business Summit EMA (Northern), Sheraton Hotel, Auckland; 2.30 pm, 20 February 2002.

Thank you for the opportunity of speaking here today to explain where the National Party stands on this most important issue.

National is ambitious for New Zealand - for its economic growth, for its environment and its people. Expectations have been lowered and it's our challenge to raise our sights and raise our prospects. Lifting our sustainable economic growth will take more than fine words. It will take consistently good policy and consistent political will.

Global warming presents a special challenge. We have to reconcile our national interests with the need for collective action alongside countries whose interests are all different from our own.

We are committed to addressing concerns about climate change and greenhouse gas emissions and that commitment was expressed when a National led government signed the Kyoto protocol in 1997.

We did so recognising the crucial economic impact. That's why in Government we advanced and won the argument to have carbon sinks recognised, and we advocated an economic rather than a regulatory approach. The world has moved on since then.

Now the Government is succumbing to the classic political temptation - putting short-term political benefit ahead of long term hard headed thinking.

As a country with an economy dependent on reliable rainfall, a temperate climate and a base in food production we would be short-sighted not to be involved in an international effort on climate change. This view is reflected in the discussions I have had with businesses in New Zealand.

To quote a letter I received yesterday "most of the people I talk to are absolutely committed to clean air, clean water and good conservation practises". Another letter says "We strongly endorse action of some kind to address climate change concerns"

Each then go on to express their concern about the process the government is following, perhaps best summed up in this quote. "consulting with the public on whether New Zealand should ratify or not is nonsense until people understand the policy actions required of them".

The Government has said it will ratify the Kyoto protocol in September this year. Nothing they have said recently indicates that position has changed.

Our position is determined by two principles. First we will act in the interests of New Zealand, and in this issue we have unique New Zealand interests. Secondly we want to maintain and enhance any cost advantage we have over our competitors not give it away.

The Government is rushing to ratify Kyoto before we have any real understanding of what the costs of doing so will be for our economy.

Those costs could be substantial. Already there is uncertainty for investors who simply cannot know what the carbon reduction policy will be, just that there will be some policy. The other traps are obvious - increased regulatory compliance, reduced foreign direct investment, loss of jobs in regional industries and less competitive primary production because of higher costs.

There are a whole range of policy choices for dealing with global warming - we could have reasonable policy or terrible policy, so lets get on with the serious debate needed to sort one from the other.

It doesn't make sense for New Zealand or for New Zealand business to squash real economic debate to meet the government's political needs.

National believes New Zealanders need - and deserve - a much better explanation and understanding of exactly just what ratification will mean for their businesses and jobs, before the country is committed to a legally binding agreement.

National opposes ratification of the Kyoto Protocol ahead of trading partners like Australia and Japan, and we oppose ratification before anyone knows the impact it will have on our national interests.

In the Statement of National Interest, the Government says its main reason for ratifying in September is to maintain New Zealand's credibility in international forums. Last week the Prime Minister as good as said there may be problems but they are 5 or 6 years away and in the meantime ratification won't make any difference. New Zealanders deserve much better reasons than these before we commit to a protocol that will affect our production base for decades to come.

For a start, business has been consulted, but not on whether or when ratification should occur. Business has been told the Government will ratify and then they have been asked to cooperate in a consultation where the result is predetermined.

The Government has moved to honey the words and soften the position, but it is just words - nothing of substance has changed, except the political strategy to neutralise business opinion. This should be seen for what it is - an act of bad faith. Eighteen months of promises to listen have come to nothing.

This internationally, binding treaty will come into effect once 55 per cent of the world's developed nations ratify it. As it currently stands, there is a very real chance that this may happen without two of our major competitors and trading partners - the US and Australia - adopting Kyoto.

This could have a significant impact on our competitive position. We need every cost advantage we have. If we proceed and Australia doesn't we could bleed industry and jobs to Australia because we have a higher costs in our economy.

Major carbon intensive industries like cement manufacturing, aluminium smelting, steel manufacturing and oil refining will simply re-locate across the Tasman - produce the same amount of greenhouse gases and export their product back to New Zealand consumers.

New Zealand could lose all its heavy industry to Australia. That would see 1400 jobs disappear at BHP's Glenbrook Steel Mill at Waiuku, in South Auckland; 900 lost at Comalco's Tiwai Point Aluminium Smelter, near Bluff; another 120 jobs go at Milburn's Westport-based cement works and 400-500 people out of work at the Marsden Point oil refinery in Northland.

Under our CER trade obligations, we will be completely exposed. New Zealand will have lost industry; New Zealanders will have lost their jobs for no environmental gain.

The National Party I lead puts New Zealand's interests first. If the New Zealand Government doesn't back New Zealanders no one else will. I fear the current Government's position on ratifying Kyoto risks selling New Zealand industries and New Zealanders short.

With respect to global warming timing is everything. We believe New Zealand should move cautiously and constructively in parallel with important trading partners like Australia and Japan.

Whether Kyoto is ratified or not, National believes New Zealand should proceed with low cost, precautionary domestic measures in response to climate change risks. Including:

* Enhancing the role of the Energy Efficiency and Conservation Authority - established by National - in working with industry to improve energy efficiency. * Address the anomalies in the Resource Management Act that make it so difficult to get consent for sustainable energy sources like wind power and hydro-electricity. * Invest heavily in agricultural sciences to help find ways of breeding and promoting management techniques of lowering farm animal emissions. National rejects an emissions tax on livestock.

National will advocate for a fairer sharing of the burden of emission reductions. Wealthy countries like Singapore and Korea in Annex 1 should face similar commitments to New Zealand. We also want to see large emitters like China and India, that are Annex 2 countries, commit to reductions from 2012.

National's long-term policy approach will be to look for economic instruments such as tradable carbon quotas to reduce New Zealand's greenhouse gas emissions.

National will also instigate a co-operative approach with all industries to ensure such mechanisms can ensure emission reductions are met at the least cost to New Zealand's economy.

National disagrees with the current Government's headlong rush to place New Zealand as the first developed nation to face commitments from ratifying the Kyoto Protocol.

We believe that business must be taken along - not bullied into - the path to ratification. This can only be done after there has been proper consultation and genuine debate on the issue. We should put the horse in front of the cart. I challenge Helen Clark to hold off ratification and make it an election issue. I am confident that New Zealanders would appreciate the opportunity of having real input on this important issue.

I am also confident they will support National's more balanced and thoughtful approach on Kyoto.

Thank you.

ENDS


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