1 00:00:00,200 --> 00:00:02,160 Speaker 1: We find out yesterday it turns out this government's no 2 00:00:02,200 --> 00:00:04,640 Speaker 1: better at running carbon auctions than the last one. Yesterday's 3 00:00:04,640 --> 00:00:07,520 Speaker 1: auction got exactly nobody is, so millions more credits get 4 00:00:07,560 --> 00:00:09,879 Speaker 1: dumped into the final December auction and the government yet 5 00:00:09,920 --> 00:00:13,160 Speaker 1: again misses out on millions of dollars climate change Minster. 6 00:00:13,200 --> 00:00:15,080 Speaker 1: Simon Watts is with a Simon Morning to you. 7 00:00:16,000 --> 00:00:17,680 Speaker 2: Morning, Mike, thanks for having met not at all. 8 00:00:17,720 --> 00:00:19,680 Speaker 1: Do you remember being on this very fine program on 9 00:00:19,760 --> 00:00:20,360 Speaker 1: June twenty. 10 00:00:21,320 --> 00:00:23,959 Speaker 2: I do, Mike, and you know the reality is the 11 00:00:24,040 --> 00:00:26,280 Speaker 2: changes that we put in place are coming into effect 12 00:00:26,440 --> 00:00:29,479 Speaker 2: next year. The fact the auction not clearing is not 13 00:00:29,560 --> 00:00:32,120 Speaker 2: a sign that the auction is not operating effectively. Actually 14 00:00:32,159 --> 00:00:35,080 Speaker 2: it is the effectiveness of the ETS scheme is not 15 00:00:35,159 --> 00:00:38,640 Speaker 2: deemed by those auction outcomes. But our in my job 16 00:00:38,720 --> 00:00:41,320 Speaker 2: is to make sure there's credibility in that market, and 17 00:00:41,360 --> 00:00:43,680 Speaker 2: we're seen affirming up of the prices, which is the 18 00:00:43,720 --> 00:00:44,479 Speaker 2: direction we need to. 19 00:00:44,440 --> 00:00:46,919 Speaker 1: See it heading as regards credibility. I've got a good 20 00:00:47,000 --> 00:00:48,559 Speaker 1: question for you in just a moment, But let me 21 00:00:48,640 --> 00:00:50,360 Speaker 1: remind you of what you said on June twenty. 22 00:00:50,840 --> 00:00:52,479 Speaker 3: What I am focused on is making sure we've got 23 00:00:52,479 --> 00:00:54,880 Speaker 3: a credible market. Hence why we stopped the review that 24 00:00:54,920 --> 00:00:57,800 Speaker 3: the current the last government had in play while we've 25 00:00:57,800 --> 00:01:00,680 Speaker 3: been putting through what we think is from pretty sensible changes. 26 00:01:01,000 --> 00:01:03,280 Speaker 3: But the big key aspect is the release of our 27 00:01:03,480 --> 00:01:04,800 Speaker 3: emissions reduction plan. 28 00:01:05,160 --> 00:01:07,800 Speaker 1: Right, So when we talk about credibility, what's credible about 29 00:01:07,800 --> 00:01:09,119 Speaker 1: an auction where know and turns up? 30 00:01:09,920 --> 00:01:12,959 Speaker 2: Well, the credibility the areas is that the auction price 31 00:01:13,000 --> 00:01:16,520 Speaker 2: for the nz view was pretty much reasonably low and 32 00:01:16,680 --> 00:01:19,759 Speaker 2: was floundering for a period. We took out a number 33 00:01:19,760 --> 00:01:23,280 Speaker 2: of the units. It's a supply and demand marketplace. We've 34 00:01:23,280 --> 00:01:26,440 Speaker 2: taken out supply from that market and that you've seen 35 00:01:26,520 --> 00:01:29,959 Speaker 2: the overarching price firm up. But you know, the end 36 00:01:30,000 --> 00:01:32,920 Speaker 2: of the day, there is another secondary market where people 37 00:01:32,959 --> 00:01:36,479 Speaker 2: can buy units and that's trading effectively. So there's pretty 38 00:01:36,480 --> 00:01:38,759 Speaker 2: liquidity there at the moment. But next year, when those 39 00:01:38,840 --> 00:01:41,520 Speaker 2: units get taken out of the market, then you know, 40 00:01:42,040 --> 00:01:44,520 Speaker 2: we'll see what happens in terms of the overarching. 41 00:01:44,000 --> 00:01:47,240 Speaker 1: Auction What nothing happens, Well, look, if. 42 00:01:47,080 --> 00:01:50,480 Speaker 2: Nothing happens in the markets operating effectively, people can get 43 00:01:50,680 --> 00:01:53,800 Speaker 2: units through the secondary market. People are doing that. That 44 00:01:53,880 --> 00:01:56,480 Speaker 2: market's trading with some good liquidity at the moment, which 45 00:01:56,520 --> 00:01:59,400 Speaker 2: is positive and you know, we'll see where that price 46 00:01:59,440 --> 00:02:01,120 Speaker 2: point goes. Has increased. 47 00:02:01,640 --> 00:02:04,240 Speaker 1: If people only want to trade through the secondary market, 48 00:02:04,360 --> 00:02:05,680 Speaker 1: what's the point of your market. 49 00:02:06,480 --> 00:02:09,679 Speaker 2: Well, our market brings more supply into the market if 50 00:02:09,680 --> 00:02:12,840 Speaker 2: it's required and at the moment, but it's not. Well 51 00:02:12,840 --> 00:02:15,280 Speaker 2: at the moment, there's enough supply out there for the 52 00:02:15,320 --> 00:02:19,519 Speaker 2: people that want those units, and you know that's that's 53 00:02:19,560 --> 00:02:20,160 Speaker 2: what's happening. 54 00:02:20,680 --> 00:02:22,400 Speaker 1: You see, you sound like a guy who's sort of 55 00:02:22,520 --> 00:02:24,680 Speaker 1: I mean, I agree, I mean what the previous government 56 00:02:24,680 --> 00:02:28,200 Speaker 1: did was ridiculous, but it's very core here. What you've 57 00:02:28,200 --> 00:02:31,359 Speaker 1: done is not you specifically, but generally. We've invented something 58 00:02:31,360 --> 00:02:34,079 Speaker 1: that doesn't exist, ie a carbon market, and we're trying 59 00:02:34,120 --> 00:02:36,919 Speaker 1: to convince people to give you money on something they 60 00:02:36,960 --> 00:02:39,680 Speaker 1: may or may not want to buy into. And as 61 00:02:39,680 --> 00:02:41,480 Speaker 1: far as your versions concerned, they don't. 62 00:02:42,520 --> 00:02:45,480 Speaker 2: Well, the purpose of the market is to reduce emissions, 63 00:02:45,600 --> 00:02:49,079 Speaker 2: it's not to create revenue for the government that is 64 00:02:49,120 --> 00:02:52,000 Speaker 2: a byproduct of the market. So the objective for me 65 00:02:52,040 --> 00:02:54,920 Speaker 2: as Minister is ensure that that marketplace is operating with 66 00:02:54,960 --> 00:02:58,400 Speaker 2: in a credible manner. The more less be clear when 67 00:02:58,480 --> 00:03:04,360 Speaker 2: government starts dabbling with bad things happen, which off the 68 00:03:04,400 --> 00:03:07,040 Speaker 2: steering wheel you're part of. 69 00:03:07,120 --> 00:03:09,720 Speaker 1: You didn't invent it, but you're now running something that 70 00:03:09,800 --> 00:03:12,600 Speaker 1: people don't want and you're interfering with the market, which 71 00:03:12,639 --> 00:03:14,600 Speaker 1: you've just admitted is not good. 72 00:03:15,840 --> 00:03:18,760 Speaker 2: No, it's definitely not that people don't want it. It's 73 00:03:18,800 --> 00:03:21,880 Speaker 2: an active secondary market out there at the moment. But 74 00:03:21,960 --> 00:03:23,880 Speaker 2: what we've done is we dealt with the issue that 75 00:03:23,919 --> 00:03:27,320 Speaker 2: the market have identified, which is oversupply, and we've taken 76 00:03:27,320 --> 00:03:30,160 Speaker 2: that oversupply out of the market from next year and 77 00:03:30,200 --> 00:03:33,480 Speaker 2: we believe that that will provide stability in that market 78 00:03:33,520 --> 00:03:34,320 Speaker 2: for people to trade. 79 00:03:34,480 --> 00:03:36,720 Speaker 1: Okay, part of the problem, and the argument wasn't the 80 00:03:36,720 --> 00:03:39,120 Speaker 1: previous government is worth the government keep coming into the 81 00:03:39,120 --> 00:03:41,560 Speaker 1: market and interfering and changing the rules. What that does 82 00:03:41,680 --> 00:03:43,800 Speaker 1: is provide uncertainty. And the worst thing you want is 83 00:03:43,840 --> 00:03:46,760 Speaker 1: a person who might purchase a carbon credit is uncertainty. 84 00:03:46,760 --> 00:03:49,000 Speaker 1: And you've just provided more uncertainty. And look how many 85 00:03:49,040 --> 00:03:51,880 Speaker 1: people turned up And the answer is no one, No. 86 00:03:51,920 --> 00:03:52,400 Speaker 3: We haven't. 87 00:03:52,440 --> 00:03:54,800 Speaker 2: I've been really clear, and that the uncertainty came from 88 00:03:54,840 --> 00:03:57,320 Speaker 2: the last government saying we're not sure if forestry is 89 00:03:57,360 --> 00:03:59,280 Speaker 2: going to be in or out of the ETS. I 90 00:03:59,320 --> 00:04:03,080 Speaker 2: mean forestry is a thirty forty year investment horizon. That 91 00:04:03,200 --> 00:04:06,440 Speaker 2: volatility just sent shockwaves through the system. We've been really 92 00:04:06,440 --> 00:04:08,920 Speaker 2: clear forestry is are removal as part of the model 93 00:04:08,960 --> 00:04:11,040 Speaker 2: that we do to reduce emissions, and that's part and 94 00:04:11,080 --> 00:04:14,200 Speaker 2: partial of that marketplace. And we've been very clear, and 95 00:04:14,200 --> 00:04:16,760 Speaker 2: I've had some very positive feedback back from the sector. 96 00:04:17,040 --> 00:04:20,279 Speaker 2: We appreciate the certainty that you're putting into that market 97 00:04:20,800 --> 00:04:22,800 Speaker 2: and the markets operating as it should do it the most. 98 00:04:22,800 --> 00:04:26,040 Speaker 1: Ok So can you say and directly connect the two. 99 00:04:26,080 --> 00:04:28,839 Speaker 1: Can you say, our emissions as a country are dropping 100 00:04:29,320 --> 00:04:31,600 Speaker 1: and if they are dropping, it as a direct result 101 00:04:31,680 --> 00:04:35,920 Speaker 1: of a market working nicely In the carbon credit sector, the. 102 00:04:35,880 --> 00:04:38,400 Speaker 2: ETS is definitely playing a role in regards to. 103 00:04:38,360 --> 00:04:41,679 Speaker 1: Reduce carbon The ETS is the big picture. The carbon 104 00:04:41,720 --> 00:04:43,799 Speaker 1: market is part of the ETS. So is the carbon 105 00:04:43,880 --> 00:04:47,800 Speaker 1: market providing to a direct reduction in our emissions? As 106 00:04:47,880 --> 00:04:50,360 Speaker 1: is the plan it is. 107 00:04:50,400 --> 00:04:54,800 Speaker 2: There's the objective of that overarching marketplace is providing the 108 00:04:54,880 --> 00:04:59,120 Speaker 2: tension required between those that produce emissions and those that 109 00:05:00,000 --> 00:05:01,880 Speaker 2: need to be able to reduce it, and that price 110 00:05:01,960 --> 00:05:06,880 Speaker 2: point is allowing that trajectory of missions reductions to come down, 111 00:05:06,960 --> 00:05:08,320 Speaker 2: which is where we need to get to. But we're 112 00:05:08,360 --> 00:05:11,760 Speaker 2: aiming for twenty fifty. This is a long period of 113 00:05:12,760 --> 00:05:15,960 Speaker 2: trajectory and you know, we've just got to be you know, 114 00:05:16,240 --> 00:05:19,360 Speaker 2: stable and calm and just let it, let the market 115 00:05:19,440 --> 00:05:22,080 Speaker 2: do what the market needs to do, and not continually 116 00:05:22,160 --> 00:05:25,360 Speaker 2: try and you send signals to the market that causes 117 00:05:25,440 --> 00:05:28,719 Speaker 2: volatility for sectors like the big players that you know, 118 00:05:28,760 --> 00:05:29,520 Speaker 2: it's not helpful. 119 00:05:29,640 --> 00:05:31,599 Speaker 1: Oh man, I'm good to talk to you. Appreciate it. Simon, 120 00:05:31,640 --> 00:05:35,159 Speaker 1: what's the climate change Minister? For more from the Mic 121 00:05:35,240 --> 00:05:38,360 Speaker 1: Asking Breakfast, listen live to news talks that'd be from 122 00:05:38,440 --> 00:05:41,880 Speaker 1: six am weekdays, or follow the podcast on iHeartRadio.