This is one of only two policy changes to the ETS Bill that was presented to the Finance & Expenditure Select Committee last month. The committee divided on party lines, forcing National to secure the support of the Maori Party to get the Bill through parliament. The other policy change was a change to the proposed rules to ensure the removal of tree weeds (wildings) is not captured by the ETS.

"New Zealand has been going round in circles for a decade on how to impose a cost on carbon pollution. This agreement will enable the necessary amendments to be passed through Parliament this week so that from 1 July next year there will be a price on carbon and an incentive for afforestation. The scheme would have been delayed further had agreement with the Maori Party not been reached," Minister for Climate Change Issues Nick Smith says.

"The revised ETS is consistent with National's pre-election commitments. It aligns our scheme more closely with Australia. It provides incentives for industry to reduce emissions without encouraging an exodus of industry and their skilled staff overseas. It rejigs the scheme so households, farms and businesses will not be funding multi-billion dollar windfall gains to the Government.

"This deal strikes the right balance in protecting the future of our economy and our environment," Dr Smith says. "It will halve the cost increases for households and make the scheme workable for business while ensuring New Zealand does its fair share to combat climate change.

"The agreement with the M?ori Party will reduce the cost impact on low-income households and insulate a further 8000 homes. It will protect the integrity of existing Treaty settlements and ensure iwi - as major participants in agriculture, forestry and fishing - are not disproportionately disadvantaged.

"It is disappointing the Finance and Expenditure Committee was unable to make any amendments. The Government will be moving a Supplementary Order Paper to address technical and drafting issues raised in submissions. The only policy changes to the Bill are the exclusion from the scheme of the burning of wood waste and improved provisions to ensure the removal of tree weeds is not captured by the ETS.

"This revised ETS will need to be reviewed as international negotiations progress, new technologies evolve and with new knowledge on the complex science of climate change. That is why the Bill provides for a review in 2011 and thereafter at five yearly intervals. "The passage of this Bill will enable New Zealand to get on and implement an affordable and workable emissions trading scheme and play our part in addressing climate change."

National's agreed changes to the ETS in response to Maori Party concerns, click here.

Letter from Nick Smith to Ngai Tahu outlining the basis for the right to some iwi to plant forests on Doc land, click here.

Letter from Nick Smith promising to involve Maori in ETS policy reviews and decision-making, click here.

National Party letter of agreement with the Maori party, click here.

Source: NZ Government media release (edited)