KEY POINTS:
No subject of current political discussion is more significant than Labour's legislation to set up a market in greenhouse gas emission permits. Refreshingly, the subject has been largely free of cheap point-scoring as the parties have resolved their positions.
Most of those positions have been predictable: National thinks the scheme goes too far too fast, the Greens think it does not go far enough or fast enough. The Maori Party thinks it too soft on business and too harsh on consumers. New Zealand First finds it radical but might support it with protections. Act thinks a tax would be a better way of putting a price on greenhouse emissions.
Labour needs the Greens and NZ First's support to pass the bill. Yesterday the Greens decided to go with it on the principle that half a loaf is better than none. A decision was also expected from the NZ First caucus yesterday but the Peters party will keep us waiting a little longer.
Time is already short for the bill to be passed through its remaining stages before the election and the Prime Minister remains remarkably relaxed about it. Though she has made environmental progress the centrepiece of her party's case for a fourth term in power, she has put no public pressure on the Government's supporting parties. She calculates perhaps that Labour has done enough to command the high ground on climate change at the election.
From the country's point of view, though, this bill may be the only opportunity to act on climate change for a long while. The National Party has promised that if elected it will produce a better emissions trading proposal within nine months, but given the complexity of the subject and business misgivings about it, not to mention National's different priorities, the promise is not credible.
In fact, National might be quietly content to see Labour's scheme enacted, safe in the knowledge that any difficulties could be blamed on its creators, and there are bound to be difficulties. After the European Union, New Zealand will be one of the first countries to attempt to cap the greenhouse emissions from industry sectors and set up a market for the trading of permits.
In theory, those firms who reduce emissions sufficiently to earn credits will be able to sell them to those who find it more profitable to buy emission rights. Thus the more carbon-efficient producers will prosper and the inefficient will have an incentive to find more climate-friendly fuel. In the process, a price will be set that represents a market value of atmospheric climate change, not a tax rate plucked out of the air.
That is the theory, but the mechanics of the market are proving more complicated to design. Australia has started on a similar path since its change of government last year and it is vital that our market can be integrated with theirs. New Zealand alone might not generate sufficient emission credits.
A change of government here could make transtasman alignment more likely. It is one of six "key principles" guiding National's attitude to the scheme. Fiscal neutrality is another - National does not want the Treasury to gain from the sale of permits, though taxpayers will bear the bill for missed Kyoto targets.
It seems significant that National talks of merely "amending" the scheme if it is passed. Climate change deserves a bipartisan response and this may be as close as we can get to one. But if the scheme is not enacted before the election, all bets may be off. Labour has already postponed its introduction for fear of adding to household costs. National is fearful for industrial competitiveness too.
There will be pain before environmental gain, but delay will not help. If this is Labour's last act it would be a creditable legacy.
