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And he dismissed claims the dairy industry was not playing its part in reducing greenhouse gas emissions.
Mr Key said methane and nitrous oxide from pastoral agriculture were major contributors to New Zealand's greenhouse gas emissions.
"If the behaviour you're trying to change is something you have no answer for and the farmer can't control - the methane and nitrate emissions from the animal - then aren't you just really putting a tax on them for the sake of it?" Mr Key said this morning.
Methane emissions came largely from farting and burping sheep and cattle and from their waste. Nitrous oxide emissions came from urine, dung and nitrogen fertiliser.
Image 1 of 14: U.S. President Barack Obama, center, with European leaders during their meeting at G20 Summit to discuss transatlantic trade and the situation in Ukraine, Sunday, Nov. 16, 2014 in Brisbane, Australia. With Obama are from left to right, Spain's President Mariano Rajoy, Italian Prime Minister Matteo Renzi, France's President Francois Hollande, British Prime Minister David Cameron, German Chancellor Angela Merkel, and President of the European Commission Jean-Claude Juncker.(AP Photo/Pablo Martinez Monsivais)
The dairy industry was currently exempt from some obligations under the emissions trading scheme but Mr Key said dairy farmers were paying in other ways.
"I think we are making them pay indirectly. So they pay through their diesel charges or their other charges," he told Q+A.
Mr Key said rising food production was expected in years to come, so world leaders needed a "pragmatic" and technological solution to climate change.
"Now if you can't actually practically change something then obviously you need to find another way through, and that is technology, and a lot of money is being put [into] that. And this is a long-term issue."
Mr Key said clean, renewable energy sources provided a greater share of New Zealand's overall power use than in many other developed countries.
The Green Party said Mr Key's comments showed New Zealand was one of the world's "problem children" when it came to addressing climate change.
"John Key this morning repeatedly claimed New Zealand's increasing emissions were okay, and ruled out measures that would cut New Zealand's emissions," Greens co-leader Russel Norman said.
"A briefing from the Ministry for the Environment released last week states emissions have increased by a quarter since 1990, and are projected to rise substantially in the time to 2050," Dr Norman said.
"While some of his ministers are climate science deniers John Key claims he is not. But he's denying that New Zealand's increasing emissions are a problem," Dr Norman added.
"We need a plan to meet our targets, instead of a plan to increase emissions."
Dairy gaint Fonterra said agriculture was responsible for 47 per cent of New Zealand's greenhouse gas emissions. The Ministry for Primary Industries said methane and nitrous oxide together accounted for almost half New Zealand's greenhouse gas emissions.