The Government has pushed out both the dates and levels at which New Zealand will face higher carbon costs under the country's Emissions Trading Scheme (ETS).
Climate Change Minister Tim Groser said the National-led Government remained committed to reducing greenhouse gas emission, but noted New Zealand is the only country outside Europe with a comprehensive ETS.
"In these times of uncertainty, the Government has opted not to pile further costs on to households and the productive sector."
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Agriculture had been due to enter the ETS in some way in 2015. Now, agriculture is "still in", but without what Groser said were artificial deadlines which ignored global progress on a climate change deal and the scientific progress required to reduce emissions from farming.
Green Party co-leader Meteria Turei said excluding agriculture from the ETS puts New Zealand's clean, green brand at risk, delays the adoption of clean technology and passes the cost of pollution on to tax payers.
"New Zealand is missing the chance to protect and enhance its $20 billion clean, green brand.
"Consumers in our export markets are becoming increasingly concerned about the carbon emissions tied up in the products they consume."
Turei said as an agricultural producer at the bottom of the world, New Zealand had to prove it was taking a productive approach to reducing the carbon intensity of exports.
The decisions announced after today's Cabinet meeting also mean the scheme will not be reviewed again until 2015, a year later than previously proposed.
The temporary system whereby major emitters buy only half the offset units they need to cover half their emissions - known as "one-for-two" - will stay in place until "at least 2015", capped at $25 per tonne of carbon.
Depressed global carbon prices have allowed emitters to purchase units for as little as $6 a tonne in recent times, compared with the capped price of $25. However, the current weakness in carbon prices was an international political problem stemming from the European Union, and carbon prices were unlikely to be so low for long, said Groser.
"This is a politically determined market," said Groser. "For us to expose our covered (export-competing) sectors when others aren't, would force them to face costs that nobody else is," he said.
Also announced today is a deal for so-called pre-1990 forest owners, who will still be able to collect a second tranche of compensation at harvest, if they choose not to reforest the land. However, if they plant an offsetting forest elsewhere, such compensation won't be available, following changes to international rules on forestry offsetting at the Durban global climate change summit last December.
Groser said the decisions would be likely to draw criticism from an "uber-green" lobby, but the government had a mandate only to act on climate change as quickly as the rest of the world.