Prime Minister John Key says he thinks a deal can be done between the Government and Labour on an amended emissions trading scheme (ETS).
A review report on the existing ETS, enacted by the previous government and put on hold by National, was released last week.
It set out 34
broad recommendations but Labour, the Greens, ACT and the Maori Party put in dissenting minority reports.
The Government wanted cross-party support for an amended ETS and negotiations with Labour are likely to start this week.
"In reality we are closer to Labour than any other party," Mr Key said today on NewstalkZB.
"I think a deal can be done.
"Labour favours an ETS and so do we. Labour supports a scheme which includes all markets and all gases, and so do we over time."
However, Key said there were substantial differences between the ETS the Government was proposing and the one Labour put through Parliament before the last election.
"It's really around the impact on jobs and consumers, and the cost," he said.
"We have proposed an ETS which would cost about half what Labour has proposed."
Key said that under an ETS New Zealand had to remain competitive with Australia and other trade markets.
An ETS puts limits on the amount of greenhouse gases different sectors of the economy can emit.
Those that exceed their limit have to buy carbon credits from those who are under their cap.
NZPA
