NZ farmers to stay in Emissions Trading Scheme

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Agriculture will remain part of a New Zealand emissions trading scheme (ETS), the Government says, despite Australian farmers being excluded from their country's scheme.

Australia's Labor Government has done a deal with the opposition coalition to exclude agriculture from its carbon pollution reduction scheme (CPRS).

Climate Change Minister Nick Smith said New Zealand was different to Australia, with nearly half this country's emissions coming from the agricultural industry.

"It's very hard for all other sectors to carry the burden of getting those emissions down," he said.

"The Government remains committed to an all-gases, all- sectors approach in the long- term."

The Government's aim was still to align the New Zealand and Australian schemes "as closely as possible", he said, adding: "The inclusion of agriculture on one side of the Tasman and not on the other does not necessarily create a barrier."

The move adds to New Zealand farmers' anger at being herded into the Kiwi ETS, despite getting a two-year reprieve under changes being considered by Parliament.

Federated Farmers president Don Nicolson said New Zealand should not put agriculture in its scheme when its major trading competitors were not.

It was contradictory for the country to be removing barriers through free-trade agreements and legislating markets through an emissions trading scheme.

"There's no market advantage to have an ETS over our competitors."

Smith was advised of the Australian Government's deal on Saturday by the office of his Australian counterpart, Penny Wong.

"It doesn't come as a surprise because the Australian Government has been struggling getting the legislation through their Senate," Smith said.

Wong told Smith that Australian farmers would still be under pressure to reduce greenhouse gas emissions.

How that would be possible outside an ETS was "a good question", Smith said, but it could be achieved. "Just because they're not part of the CPRS doesn't mean Australian farmers will not bear some cost to do with their emissions."

The New Zealand Parliament's finance and expenditure select committee will today report back to the House on proposed changes to the ETS legislation.

The Government is shoring up a deal with the Maori Party to force through its changes if, as expected, the committee is deadlocked and the bill is reported back unamended.

Labour's climate change spokesman Charles Chauvel said New Zealand should not align its scheme with Australia's considering the different priorities - agriculture in New Zealand and coal-fired power plants in Australia. He wanted the Government to make its changes after next month's negotiations in Copenhagen and the Australian legislation was passed.

- © Fairfax NZ News