Agriculture stays in ETS despite Aussie move

Nick Smith. Photo / Mark Mitchell

New Zealand will not be following Australia's example and excluding agriculture from its emissions trading scheme (ETS), Climate Change Minister Nick Smith says.

The Government remains committed to an all-sectors, all-gases scheme even though agriculture's entry would be pushed back from 2013 to 2015 under its proposed changes to the ETS.

In a major concession to the Opposition, the Rudd Government said it would exclude agriculture from its ETS legislation.

Agricultural emissions from ruminants represent about half of New Zealand's emissions but only 13 per cent of Australia's, says the Australian Climate Change office.

And while New Zealand's agricultural emissions have risen 12 per cent since 1990, Australia's have fallen by 6 per cent.

"That's mainly due to drought," Smith said.

Excluding agriculture was "a luxury they might be able to afford but we cannot," he said.

Federated Farmers president Don Nicholson called the Australian move pragmatic.

"It means New Zealand is now the only country on the planet to include agricultural gases in its emissions response."

Smith said he would visit Canberra on Monday for talks with the Government and Opposition before finalising changes.

The amendment bill was reported back unchanged yesterday after the finance and expenditure select committee split down the middle on it.

Many of the criticisms the select committee heard about the bill arose from its adoption of the Australian scheme's tests for eligibility for free allocation of units to cover emissions, including future growth in emissions, from the trade-exposed sector.

The speed with which the amendment bill is being pushed through the legislative process has also drawn fire.

Previously Smith has said the Government wanted emissions trading to be "settled" before the global climate conference in Copenhagen next month.

But yesterday he was putting the emphasis on the need to introduce a carbon price into the economy soon but the existing legislation's timetable for doing that could not now be met. He accepts that further amendments will be needed.

Critics argue that other countries are entitled to know what New Zealand's national target for reducing emissions will be, but how that is allocated between sectors and generations is none of their business.

But Smith said: "When countries gather people don't just look at the rhetoric but at the record. If New Zealand is still debating and dilly-dallying, it detracts from our credentials on climate change."

The Government is still in negotiations with the Maori Party over what changes it requires to give it the numbers to pass the bill.

The Maori Party's minority report on the bill is critical of many aspects of the scheme but says the worst-case scenario would be for nothing to happen.