KEY POINTS:
Climate change policy is bare land at the moment. The Government's first attempt at erecting a structure there - the policy package, centred on a carbon tax, which was announced in 2002 when New Zealand ratified the Kyoto Protocol - has collapsed.
A new one has yet to emerge from the drawing board. Discussion documents on a national energy strategy and on sustainable land use (including forestry) are expected before Christmas, but in the meantime the politics of climate change have changed, and quite suddenly.
At the Labour Party conference last weekend Prime Minister Helen Clark raised the possibility of setting the long-term national goal of becoming carbon-neutral - making no net addition to the global level of greenhouse gases.
And the National Party has issued its "blue-green" policy, which abandons its stance that it isn't really sure global warming is a problem but is sure we can't afford to do much about it in any case.
It is now promising an emissions trading regime starting with electricity, incentives for biofuels and the removal of perverse incentives to deforest.
Most of that is similar to what the Government has been saying too, and suggests the basis for a bipartisan consensus. Business, looking for some certainty about the rules of the game, would welcome that.
But both these developments have been greeted with some cynicism.
The aspirational vision outlined by Clark a week ago contrasts with the timidity of the measures which have emerged from the Government so far to fill the vacuum left by the collapse of its first set of policies.
It has set a target for biofuels, but it is only a quarter of 1 per cent of fuel use by 2008, rising to 2.25 per cent by 2012.
Asked this week how that squared with the bold talk of carbon neutrality Clark said, "We may have to improve that quite substantially."
The Government has announced a scheme to encourage the permanent reforestation of marginal land prone to erosion.
But the scheme loads all the costs and risks on to landowners and would recompense them with bits of paper which at this stage only have value in the arcane world of international carbon trading.
Privately, officials talk of the lack of a clear mandate from the top to put forward measures that would impose considerable costs on the economy any time soon.
But that might change now that Clark is portraying climate change and sustainability as a matter of national identity, as was the anti-nuclear stance of the 1980s.
At a more pragmatic level, New Zealand needs to burnish its clean, green credentials, Clark says, if it is to head off a protectionist threat from Europe about food-miles - the carbon emissions involved in getting our produce to their market.
Doubts also surround the depth of National's change of heart. Is it just a bid for enough green votes to push the Green Party below the 5 per cent threshold and therefore out of the next Parliament? Or are they taking heed of what the scientists are saying?
A sign that they may be taking notice came from Eric Roy, the National MP for Invercargill.
"I'm not worried about climate change," he said in Parliament. "I'm absolutely terrified."
Taking the politicians at their word, one thing is now clearly on the horizon - emissions trading.
The concept is familiar. If you want to graze sheep on a piece of land you need to own it or lease it. If you want to be a commercial fisherman you need a fishing quota.
Rights to graze or fish what once were commons have been curtailed and property rights created.
The ancient right to burn what we like, without a second thought, looks like going the same way.
Emissions trading at the national level, like Kyoto at the international level, limits the right to emit greenhouse gases and sets up markets in those rights.
The idea is to ensure that the lowest cost measures to reduce emissions are taken first, and that the costs of progressively reducing emissions are equalised across countries and sectors, so that everyone moves up the cost curve at the same pace.
The Government has foreshadowed - and National had promised - that they would start with the electricity sector. It is the fastest-growing source of emissions, even though two-thirds of the power generated is from renewable sources.
However, designing a cap-and-trade regime involves tricky decisions. Where do you set the cap that determines how many permits a generator needs to hold? And how do you arrange the supply of permits?
One option is to give the generators, at no charge, enough permits to cover their existing emissions so that they only need to buy more if they emit more.
That is National's version. The extra permits for new thermal power stations would come from establishing permanent forest or Kyoto-certified emissions reductions elsewhere in the economy.
Or Genesis Energy might close Huntly, the only coal-burning plant, to free-up permits for more efficient gas-fired plants.
The problem with that option, called grandparenting, is that it gives large windfall profits to the existing emitters: consumers face higher prices - that is part of the point - but the generators' costs have not risen to the same degree.
Another option would require the generators to buy some or all of the permits they need from the Government through an auction, yielding some revenue for the state.
Yet another option, proposed by the Sustainability Council, is for the Government to dole out the necessary permits to the public, like power company share giveaways in the 1990s. Emitters would have to buy them, and consumers could opt to hold on to them as insurance against rising power prices.
Equally difficult choices arise over commercial forestry.
Trees suck carbon out of the atmosphere and where forests are planted on land not previously forested Kyoto allows us to count that carbon as an offset to emissions elsewhere.
Existing policy is for the Government to keep - or swipe, the foresters would say - that value.
Forest industry sources expect some relaxation of that stance to be foreshadowed in the discussion document on sustainable land use. The owners of new forests would get some recognition of the value their trees create. But from what starting date? And would they get cash or tradeable permits?
Other measures in the pipeline include revising building standards, to lift energy efficiency from what are low levels by international standards, and border restrictions on imported cars to raise the fuel economy of the national vehicle fleet.
But the hardest case is agriculture, the source of half the country's emissions.
Cars can be redesigned; cattle and sheep, not so much. Researchers are working on the problem. At the moment, though, it is hard to reduce those emissions without cutting stock numbers.
But a policy response to the fact that belching ruminants and liberal use of nitrogen fertiliser add to global warming - and to the taxpayer's Kyoto bill - cannot be deferred indefinitely.
This week's report by former World Bank chief economist Sir Nicholas Stern, commissioned by the British Government, concludes the economic costs of inaction on climate change will greatly exceed the cost of acting promptly to mitigate it.
