Tue, 01 Sep 2009 5:44a.m.
Political parties face months of difficult negotiations to set up an emissions trading scheme after a review report showed significant differences exist between them.
The previous Labour government put an emissions trading scheme (ETS) into law but when National won the election it put it on hold, saying the economic costs were too high.
A special cross-party select committee was set up to review it, and released its 132-page report yesterday.
It makes 34 recommendations on broad climate change policy but Labour, the Greens, ACT and the Maori Party all put in minority reports revealing significantly different opinions on the final shape of an ETS.
Under the existing ETS, limits on greenhouse gas emissions would be imposed on all sectors of the economy. Not all sectors would come under the ETS at the same time.
Those that exceed their limits would have to buy carbon credits from those under their caps.
It is a vital part of the Government's climate change strategy and the aim is to have legislation settled by December.
The energy and industrial sectors are due to come under the existing ETS on January 1, a deadline which Prime Minister John Key said yesterday would be "very difficult" to achieve.
"We are focusing on trying to get an outcome that is enduring, not necessarily something in three or four months," he said.
"It leaves us with some meaty negotiations, but politics in government is all about compromises."
Mr Key said the other parties would have to consider what would happen if they held to their stated positions.
Climate Change Minister Nick Smith said the Government's preference was to have an amended ETS in place.
"No one should be surprised at the challenge we face," he said.
"Other countries are facing similar challenges as well on achieving political consensus to implement an emissions trading scheme."
Labour said it was going to be flexible in the negotiations, raising the possibility of the two main parties reaching agreement even if the minor parties hold out.
"This is a golden opportunity to reach a broad consensus and take New Zealand's ETS design off the political battlefield once and for all," said climate change spokesman Charles Chauvel.
"We hope National will seize that opportunity. If they do, Labour is ready and willing to work with them."
NZPA