Controversial ETS bill passed in urgency

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Controversial changes to the emissions trading scheme have been voted into law after the Government rammed them through under urgency.

Parliament voted 63 to 58 in favour of the climate change response bill early this evening after an acrimonious debate described by Climate Change Minister Nick Smith at one point as "rude and aggressive".

National, the Maori Party and United Future supported the law change, which was passed despite opposition from groups including the Parliamentary Commissioner for the Environment Jan Wright and others.

Dr Wright said the legislation would not achieve its stated goal of reducing greenhouse gas emissions and "I cannot support the bill being passed as it is currently".

The Climate Change Response (Moderated Emissions Trading) Amendment Bill replaces the scheme set up by the outgoing Labour government.

It penalises big polluters to a lesser extent than Labour's version and reduces the impact of an ETS on fuel and energy prices.

Dr Smith said the bill was about implementing a "workable and affordable" emissions trading scheme.  

"It strikes the right balance in protecting the future of our economy and our environment.

"It ensures that we should do our fair share on climate change without the pretence that we should lead the world.

"New Zealand has been going round in circles for a decade on how to impose a cost on carbon pollution. This Bill means that from 1 July next year there will be a price on carbon and an incentive for afforestation. "

If the bill had not been passed, the existing scheme would have come into effect on 1 January and increased power prices by 10% and put $400 million a year in costs on to industry.

But Dr Wright said the ETs worked by putting a price on carbon emitted, encouraging a move to a low carbon economy.  The government's changes reduced its effectiveness by all but removing that price signal for some.

"The amendments pass much of the cost from polluters to taxpayers."

Labour has argued vociferously against the changes, saying it forces taxpayers to subsidise big polluters to the tune of billions of dollars.

Labour's climate change spokesman, Charles Chauvel, said the law was  "fundamentally flawed on multiple levels"

"It is economically irrational, socially inequitable, environmentally counter-productive and fiscally unsustainable.  And its hallmark has been one of poor procedure and hasty consideration."

The Maori Party was today forced to confirm its support for the bill after a revolt from grass roots members over the burden it would place on low income households.

 The party's co-vice president, Te Orohi Paul issued a statement to make it clear the party was not about to "welch" on the deal with the government.

 "The Maori Party is a party of integrity.  It keeps its word and we will not welch on promises already made in good faith."

She was responding to concerns among the party's national council, who were hoping to hold a telephone conference later today and ahead of the final vote on the bill. Some members of the council want Maori Party MPs to vote against the bill, describing the bill as a "terrible scheme" that will leave the majority of Maori with a "horrendous debt".

Some members of the council say the Parliamentary caucus did not consult them over the deal but Ms Paul said that was "mischievous making."

"We have had discussions at the last two National Council hui about the ETS, and have received a great deal of information from the parliamentary wing of the party, to inform us as a National Council.

- © Fairfax NZ News