High wire political negotiations have given National the numbers to change the Emissions Trading Scheme in a way they claim will lessen the burden on householders' pockets.
The Maori Party has announced it will support legislation after getting concessions for low income earners and iwi with major interests in forestry, farming and fisheries.
Climate Change Minister Nick Smith says the government, with Maori Party support, will revise the ETS to reduce the costs to households and the impact on jobs, while ensuring New Zealand takes a responsible approach to the global problem of greenhouse gas pollution and climate change.
Smith says the changes will halve the price impact on households for fuel to 3.5 cents per litre and for electricity to one cent per kilowatt hour.
He also says New Zealand needs an emissions trading scheme to discourage carbon pollution, improve energy efficiency and reward afforestation.
"Amendments to the existing legislation are required to make the ETS workable and affordable," he says.
Features of the revised scheme include:
- Revised entry dates of July 1, 2010, for transport, energy and industrial sectors and January 1, 2015, for agriculture.
- A transitional phase until January 1, 2013, with a 50% obligation and $25 fixed price option for the transport, energy and industrial sectors.
- A production-based industry average approach to allocations for trade exposed, emissions intensive businesses.
- A phase-out of industry support aligned with trading partners and the government's long-term -50 by 2050 emissions reduction target.
- Incentives for afforestation created by a domestic and international market for carbon credits.
- Enhanced transitional support for the fishing industry.
The changes to transitional support for industry will encourage cleaner technologies without driving jobs, investors and emissions offshore, Smith says.
Policy risked falling behind
He says New Zealand's response to climate change policy risked falling behind without the support of the Maori Party.
"These changes reflect concerns of the Maori Party over impacts of the Emissions Trading Scheme on low-income households and primary industries such as fishing, forestry and agriculture.
"Further work will be done with the Maori Party on an extension to the energy efficiency assistance for low-income households, promotion of afforestation, biodiversity protection, recognising the Treaty relationship in ongoing climate change policy and on Treaty settlement issues arising from the ETS."
The government will be introducing to parliament next week a Climate Change Bill implementing the changes to the ETS.
Smith says the government will be continuing to work with Labour and other parties "to try and build as wide a consensus as possible in this important policy area".
The government aims to have the revised law passed by the time of the Copenhagen climate change conference in December.
What do you think of the changes to the Emissions Trading Scheme by National and the Maori Party? Comment below