KEY POINTS:
National is putting more detail around its plans to change the Government's flagship emissions trading scheme if it wins power - but some areas remain unclear.
Labour is set to pass the scheme into law next week with the help of New Zealand First and the Greens, less than three months before the general election.
National, which remains ahead in political polls, opposes the present scheme.
The party's climate change spokesman, Nick Smith, outlined some of the planned changes yesterday when approached by the Herald. They include the likely introduction of an offset scheme that could resolve concerns in the forestry industry.
"There are areas in which forests were planted in which it's not the most efficient land use," Dr Smith said.
"We need to provide a mechanism by which that land use can change, providing the environment is not compromised."
Problems in the forestry sector shot to prominence this week when South Island iwi Ngai Tahu lodged a claim with the Waitangi Tribunal relating to concerns the value of its 1998 settlement could be significantly eroded by the emissions trading scheme.
At issue is the fact that the scheme would see owners of pre-1990 forests having to pay a sum of money if they cut the trees down and converted the land to another use.
The forestry offset scheme would allow those people to plant an equivalent area of trees elsewhere - such as on eroding hill-country land - and not slap them with the penalty of changing their original land use.
Such a plan was put up as an amendment to the current proposed scheme in Parliament on Tuesday but was defeated, Dr Smith said.
Among National's other changes is putting the fishing industry on the same footing as other trade-exposed industries, by "grandparenting" it for 90 per cent of 2005 emissions.
The industry would be supported with allocations of units for a certain period to get it through the transition. The current scheme allows for a lesser 50 per cent allocation.
National would also allow small- and medium-sized businesses to get involved in the scheme by reducing the 50,000-tonne threshold for emissions that businesses currently have to cross to be eligible for an allocation.
Dr Smith said the current limit was too high and didn't take in companies such as a timber firm in Nelson which was a huge consumer of electricity.
National intended to lower the threshold and possibly do away with it altogether, Dr Smith said.
"You can choose if you want to be in it," he said. "If not, you don't have compliance costs - but you don't get any allocation."
The allocation of permits would also likely be dealt with at a select committee if National won power.
The gradual phasing out of those allocations in future years would also be more flexible if National changed the scheme, so New Zealand moved in line with its trading partners.
Dr Smith said current legislation locked the phase-out into a rigid timetable, when it wasn't clear yet what other countries would be doing.
If they moved faster to phase out the "grandfathering", then so should New Zealand, he said.
But if they moved more slowly, then New Zealand should also take that route.
National has outlined a set of six principles which it has said will guide its changes to the emissions trading scheme - but it isn't yet clear how it will meet each one of those.
HOW IT ALL WORKS
* The scheme aims to reduce greenhouse gas emissions by putting a price on the right to emit.
* It creates a financial incentive for big emitters to cut their emissions.
* Big emitters are given entitlement and if they under-use it, they can sell the carbon credits to polluters who go over their entitlement.
* The scheme will be phased in: electricity in 2010, transport in 2011 and agriculture in 2013.
* The costs of polluting are expected to be passed on to consumers.
* Households will receive a one-off compensation for higher power bills in 2010, on average $112.
WHAT NATIONAL WOULD DO
* Introduce an amendment bill next year and refer it to a select committee for feedback.
* Pass the amendments into law within nine months of taking office.
AMENDMENT BILL WOULD
* Introduce a forestry offset scheme that is likely to mitigate concerns from forest owners that they cannot change land-use without paying big sums of money.
* Put the fishing industry on the same level as other trade-exposed industries, and "grandparent" it for 90 per cent of 2005 emissions.
* Have a more flexible plan for phasing out the allocation of units in the future, so New Zealand moves in line with its major trading partners.
* Allow small and medium-sized businesses to get involved in the scheme. Lower, or potentially remove, the 50,000 tonne threshold an emitter must meet in order to be eligible.
* Write a 50 per cent reduction of 1990 emissions by 2050 into the legislation as an objective.
