If you appreciate irony, yesterday’s select committee report on the Climate Change Response (Moderated Emissions Trading) Amendment is a must-read

Yesterday the finance and expenditure select committee reported back to Parliament on the Climate Change Response (Moderated Emissions Trading) Amendment Bill, and there seems no end to the irony.

To say “the committee” reported back is a misnomer. This is a series of minority reports, one for each party that sits on the committee. Members were unable to perform the normal functions of a select committee: to agree on whether or not the Bill should pass, let alone what amendments should be made to it. Every party except National offers swingeing comments on both the process and the policy. Every party except National speaks favourably of a carbon tax, yet the Bill will confirm an emissions trading scheme as our carbon pricing mechanism.

Policy-wise, “the committee was submitted to the bizarre spectacle of having to adjourn its last meeting on Wednesday 11 November for half an hour while The Treasury officials withdrew to clarify if they had made a $50 billion error or not”. Treasury then advised that they had indeed miscalculated: the Bill could increase government debt by $110 billion by 2050, 13-17% of GDP, more than twice as much as previously thought.

The Bill’s passage through Parliament has been abbreviated, to pass it on schedule. There are more amendments to come, which will be introduced at committee of the whole house stage. These were agreed to between the National and Maori parties, the price of Maori Party support. They were withheld by responsible Minister Nick Smith from select committee scrutiny, because they couldn’t be incorporated in time.

The Bill amends the emissions trading scheme (ETS). When the scheme was established last year by the previous government, Smith was loud in his criticism of the “rushed and inadequate” legislative process and consequent risk of serious error. His opposition parties are happily giving those quotes another airing.

Back in September, Labour and National had been in cross party talks, in a half-hearted effort to achieve bipartisan support for this intergenerational issue. However, National instead found the necessary bare majority with the Maori Party.

In their minority report, Labour committee members describe their party’s position in the negotiations. They would have supported the Bill on three conditions: a compromise date on the entry of agriculture to the scheme, quicker phase out of free allocation, and a cap on intensity-based emissions. They set this out, presumably, to make the government look bad. What it shows is how very nearly they signed up to something not dissimilar: we can only speculate how much better the net effect of their preferred position would have been. Saved by National’s defection from the negotiations, now they’re painting themselves greener than the Greens:

“how many houses could be insulated, how many clean cars could be incentivised, how many clean jobs could be created, how rapidly could New Zealand be selling new clean technology overseas, how many trees could be planted, how many farms could be cleaned up, and how much cleaner and richer could we be, if even some of these funds were directed into complementary measures?”

If this Bill is voted down, the legislative status quo will prevail, which would be a political triumph for Labour and, to a lesser extent, the Greens. The Greens’ position is similar to Labour’s, as regards the problems with this Bill. They think the ETS currently in force, which will proceed unaltered if the amendment fails, is inadequate, but preferable.

There is a real prospect that the government could lose on this Bill, and it all hinges on the Maori Party, whose minority report is a lot of waffle. Discernible amongst the flannelling is acknowledgement of the “almost unfathomable global reality” of climate change; that the worst case scenario is a do-nothing scenario; and that an integrated package of policy responses is needed.

For the scheme to be acceptable to the Maori Party, says its report, four objectives must be met, including an answer to the important and difficult question of the impact of an ETS on the value of Treaty settlements. The current scheme does not deliver on these objectives, nor does the Bill as reported back from select committee; therefore, Maori are negotiating with the government.

We have to hope they will realise, sometime soon, that no sop the government could give to Maori would outweigh the cost of this Bill to the country (including Maori); that what the Bill presents is worse than a do-nothing scenario, it’s a damaging do-nothing scenario; and that we are not going to get an “integrated package of responses” from this government. The Maori party’s dilemma raises really interesting questions about whether a party with such a discrete constituency is justified in a blinkered focus on those interests, or has some moral obligation to keep an eye on the wider public interest.

However, taking the party at its word (although they’ve been known to change their minds on this before), they will not help vote the Bill down: they do not support the status quo, and the government has a big political interest in not allowing that to happen.

That’s about where one aspect of the ACT party’s report starts to look interesting. ACT would defer commencement of aspects of the ETS, otherwise set to commence on 1 July 2010, for six months to 1 January 2011, “and no other changes to existing ETS at this stage (ACT would support National on this, guaranteeing a majority for this change)”.

ACT also calls Smith on his absurd bluff regarding the urgency of progressing this Bill before the climate change negotiation summit next month at Copenhagen. For Copenhagen purposes, we already have an all sectors all-gases ETS, one that is more robust than the alternative being rushed through by the government.

I never thought I would find myself saying we should do nothing about our climate change response, even if only temporarily. I never thought I would find myself in agreement with the ACT party on this issue. However, for their different reasons, nobody supports the Climate Change Response (Moderated Emissions Trading) Amendment, except the government, whose only motive now is political face saving.

If the amendment is the only alternative, because numbers can’t be mustered to sustain the status quo, a temporary “taiho” is democratically the most legitimate option in the circumstances. So there it is: finally ACT, the climate change deniers, have got their ETS policy right.