When it comes to the fight against climate change, the emissions trading scheme – often shortened to ETS – is often referenced, and praised.

New Zealand first legislated for the ETS back in 2008 and has subsequently tinkered with it a number of times.

Although most sectors in New Zealand's economy are covered by the scheme, agriculture has been absent.

This was an election issue for Labour; something it promised to address when in Government.

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Today it made an important ETS announcement. So what happened?

What is the emissions trading scheme (ETS)?
It's a scheme that puts a price on greenhouse gas emissions. Businesses pay for all their emissions to incentivise them to emit less.

What other industries in New Zealand are in the ETS?
Individual people don't pay, but pretty much every sector in the economy does. That includes transport, waste and energy just to name a few.

How much of New Zealand's total emissions does agriculture account for?
Almost half of all New Zealand's greenhouse gas emissions come from the agriculture sector.

What happened today?
The Government and the agriculture industry came to an agreement where farmers can avoid being shifted into the ETS, if they commit to a new sector-led plan.

What has the agricultural sector committed to?
Farmers will improve their tools for estimating and benchmarking emissions on farms, commit to more research and development work, and use integrated farm plans that include a climate module, among other initiatives.

Will farmers have to pay under the ETS?
The agriculture sector will go into the ETS under law, but the Government says that will be reversed if the sector shows it is able to commit to the new plan.