KEY POINTS:
Power bills will rise but the Government plans to help people on lower incomes under its new environmental carbon emissions trading scheme.
Prime Minister Helen Clark yesterday said the trading scheme, to be announced on Thursday, would include "compensation" for poor households to cope with the expected increases
in power bills.
She acknowledged the trading scheme would push up electricity and petrol prices, "which is why it's so important that there is compensation for the low/modest-income consumer because they are not in a position, necessarily, to radically alter their pattern of use".
She would not give details of the assistance, saying they would be given with the announcement.
Thursday's announcement is critical for the Government's climate change policy, which Helen Clark tagged as a high priority early in the term.
Under it, those who breach set emission limits will have to buy "emissions units".
Some media reports have put likely price rises at about 4 per cent, but Energy Minister David Parker today said that was too high.
"These costs are not substantial, they are not going to happen tomorrow and they are certainly not 4 per cent per annum," he said on Radio New Zealand.
Mr Parker said officials predicted the overall effect would be "miniscule", with meeting the first five years of the Kyoto Protocol's obligations only reducing GDP by 0.1 per cent.
Green Party co-leader Jeanette Fitzsimons said giving rebates or financial help to offset the power increases would defeat the purpose of the plan.
It would be better to invest in help with insulation and clean, efficient heaters.
Details of the scheme - including what the emissions limits will be and the price of units - are a closely guarded secret.
Its main targets are the energy industry and agriculture, which creates about half New Zealand's greenhouse gases.
Speaking on TVNZ's Agenda programme, Helen Clark indicated farmers would get a reprieve on when they would join in because of the difficulties in reducing methane emissions from stock.
Bringing various industries into the scheme would be staggered.
"I don't want to reveal the sequence, but clearly there's different capacity to cope with the challenges.
"And agriculture's challenge is clearly the biggest because we don't have the answer on how to drop pastoral greenhouse gas emissions," the Prime Minister said.
Although agriculture was a primary source of carbon gas emissions, it faced bigger difficulties than other industries in reducing those.
Techniques to reduce nitrous oxide had been developed, but "the methane from the animals is a tougher challenge and it's going to need a lot of research to crack the answer."
The Fonterra dairy co-operative was taking a leading role in reducing emissions where possible.
The Government's last attempt to impose restrictions on farmers - a levy to pay for research into emissions reduction - was dubbed the "fart tax" and vehemently opposed by farmers.
There will be no escape for farmers this time - Climate Change Minister David Parker and Helen Clark say the new plan will eventually cover all industries.
The Prime Minister said any help for low-income people would supplement aid for people to retro-fit their homes, which was part of the Government's co-operation agreement with the Green Party.
"We are developing the scheme, which I hope will be interest-free, for people to retro-fit their homes."