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The Government has applied the brakes on bringing the transport sector into its emissions trading scheme, with road users not being asked to pay higher fuel costs until 2011.
Under the proposed scheme, which is yet to be approved by Parliament, the transport sector was to begin paying levies from January next year - which might have added up to 8c a litre to the cost of fuel.
However, with world oil prices skyrocketing and Labour being sensitive to its imposing a further hike in the cost of petrol with an election looming, the Herald understands the Government is set to announce within days that it will push back the date that transport joins the scheme for two years.
Yesterday, Prime Minister Helen Clark said world oil prices had already achieved a greater drop in petrol usage than a carbon charge or an emissions scheme could.
"The Government is very conscious and I am very conscious of a lot of pressures on families and on businesses right now. Both families and businesses are impacted by high fuel prices, interest rates, and families are feeling the pinch of basic food prices, especially in the dairy area, at the present time. So we are obviously looking at ways we can help reduce some of those pressures."
The reversal will come as a blow for Climate Change Minister David Parker, who last week was adamant that there were no plans to delay the overall scheme. His office last night refused to comment.
Helen Clark said the Government was holding consultation meetings alongside select committee hearings on the trading scheme.
"There was always going to be improvements to the scheme," she said.
She also moved to scotch suggestions the Government would approve any regional petrol taxes as high as 5c a litre.
Two of the Government's support parties have echoed growing public disquiet about the scheme. New Zealand First has only agreed to support the legislation through its first reading, while United Future leader Peter Dunne has called for an urgent debate on the trading scheme.
The Government's concession to the transport sector shows it has chosen to deal with those more immediate political concerns rather than the future possibility of any possible post-election deal with the Greens - who yesterday accused the major parties of sacrificing New Zealand's environmental future by retreating from plans to introduce the emissions trading scheme.
"It looks like a race at present to see who can back off fastest," Greens co-leader Jeanette Fitzsimons said.
"We're trying to get the best possible legislation through this term ... I think there will be legislation before this election but the question is will it be even weaker than what we've got now." Ms Fitzsimons said further backtracks on the trading scheme should see the Prime Minister awarded a "climate ditherers" award to replace the United Nations Champion of the Earth award she recently received.
"While, yes, everybody is very concerned about how they are going to feed the kids tomorrow and fill the car, I think most people want a decent future for their kids," Ms Fitzsimons said. "I think if you were to tell people their kids are going to grow up in a world that's not worth living in, they would want to take action to prevent that.
"Clearly it would be a bottom line in any post-election agreement that there would be major progress made on reducing greenhouse emissions, but we're not going to specify particular legislation or methods. It is the outcome that matters, not the mechanism you use to get there."
