Broad approach to ETS still possible

Thu, 17 Sep 2009 5:56a.m.

The Government could still get the broad political support it wants for a new emissions trading scheme (ETS).

Labour quit negotiations on the ETS after the Government made a deal with the Maori Party, but yesterday both the main parties were repairing the damage.

Labour leader Phil Goff said his party would re-enter the talks "for the good of New Zealand", but it was up to the Government to make the next move.

Prime Minister John Key said if Labour wanted to re-engage "then we're more than happy to do so".

It is in both their interests to reach agreement on the ETS, a vital part of New Zealand's response to climate change.

The Government needs to present an ETS to an international conference at the end of the year which can survive political differences.

It doesn't want a battle in Parliament when it passes the legislation, which would be sure to happen if Labour hasn't agreed to it.

Labour doesn't want to be sidelined on such an important issue and needs to reach a compromise with the Government on the problems it has with the ETS.

Mr Key's announcement on Monday that an agreement had been hammered out with the Maori Party took Labour by surprise.

It had been negotiating with the Government and considered it had been betrayed.

The agreement with the Maori Party gave the Government 63 votes on the bill which will soon come to Parliament - a thin majority in the 122-member House and one which would not have been convincing on the international stage.

An ETS puts limits on the amount of greenhouse gases different sectors of the economy can emit.

Those that exceed their limit have to buy carbon credits from those under their cap, or from those who plant trees.

The agreement between the Government and the Maori Party has significantly eased the burden on industry and taxpayers will have to pay a bigger bill if New Zealand doesn't meet its international obligations to reduce emissions.

In another twist yesterday, Maori Party co-leader Pita Sharples revealed details of free insulation for low income households after saying he had been mistaken in believing he could negotiate an increase in welfare benefits to offset the impact of the ETS on petrol and power prices.

Dr Sharples took the Government by surprise on Tuesday when he said a benefit boost was on the negotiating table, and yesterday explained it was "off the menu".

NZPA

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