It is crunch time for the New Zealand government’s proposed emissions trading scheme (ETS), with negotiations reportedly in their final stages and the Green Party publicly asking its supporters whether it should support the bill.

The ETS forms the centrepiece of the government’s climate change policy. Under the scheme, the government would issue permits allowing a certain quantity of greenhouse gas emissions, which emitters would have to redeem to cover their emissions. Emitters could trade permits amongst themselves, and the need of those wanting to increase their emissions to buy permits from others would create a price, and thus a financial incentive for others to reduce emissions. Different sectors would enter progressively, with deforestation backdated to 1 January 2008, the energy and industrial sectors entering in 2010, transport fuels in 2011, and the agricultural sector, New Zealand’s major source of emissions, entering in 2013. The scheme has been criticised both for not doing enough to lower emissions, and for imposing costs on the business sector.

Legislation to establish the ETS was introduced to Parliament in December last year, and reported back from select committee in May. Since then it has languished while the government has attempted to gather the votes to secure its passage. National, ACT, and United Future have said they will not support the bill, leaving the government dependent on negotiating a deal between the Greens and NZ First in order to get the numbers. But the two parties are a long way apart on environmental issues and climate change, and it was never going to be an easy task.

According to the Greens, the parties have found common ground over “help[ing] people make their houses warm and dry” – a core issue for NZ First’s elderly constituency. But they have not been able to bring forward the entry date of the agricultural sector, or secure a more progressive entry for transport. The party must now decide whether to support the scheme now, or vote against it in the hope of being able to get stricter controls after the election.

Both the Greens and New Zealand First will decide their position at their caucus meetings on Tuesday. If both agree to back the bill, it will likely be passed into law in early September.

Idiot/Savant blogs on New Zealand and international politics from a left-wing perspective at No Right Turn.

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