ETS bill through first reading

After months of controversy the Government brought its new-look emissions trading scheme to Parliament and got the bill through its first reading on a vote of 63 to 58 yesterday.

The previous government passed an ETS just before last year's election but National put it on hold because it considered the cost to the economy would be too high.

It was revised and changes have been put into the Climate Change Response (Moderated Emissions Trading) Amendment Bill.

The ETS seeks to limit emissions, which New Zealand is required to do under international agreements, by putting a price on carbon.

Eventually all sectors of the economy will come under it, starting with industry, energy and transport in July next year.

Agriculture will come under it in 2015, two years later than under the original ETS.

It is a less rigorous scheme than the one introduced by the previous government and will halve the cost to consumers of power and petrol price rises.

Taxpayers will subsidise polluters to a greater extent during a transition period.

Climate Change Minister Nick Smith said the scheme was workable and affordable.

"The existing act was a branding statement by a dying government wanting to make grand gestures about saving the planet with little regard as to whether it would work and its impact on consumers, jobs and investment," he said.

Labour and the Greens have said that by 2030 it will cost taxpayers $2 billion a year.

Dr Smith said it would cost $415 million to 2013 and there would be savings of $493 million between 2013 and 2018. Cost estimates beyond 2018 were "very uncertain".

Labour's climate change spokesman, Charles Chauvel, said the scheme was not sustainable and would be rolled back by the next Labour government.

- NZPA