The Government appears to have put to one side the specifics of how agriculture will fit in to the emissions trading scheme (ETS) as it focuses on integrating other parts of the economy.
Federated Farmers was forced recently to concede defeat in its battle to exclude the sector from the ETS, with the Government passing an amendment Bill that offered concessions of a longer phase-in period before agriculture meets the full cost of its emissions.
New Zealand remains the only country to include agriculture in an ETS, with Australia earlier in the month excluding its farmers, although imposing greater regulatory control.
Despite the Government claiming the contrary, it appeared New Zealand was taking a leadership role addressing climate change, something it accused the previous Government of doing.
Information provided to the Otago Daily Times reveals that the European Union's ETS will capture about 40% of its emissions compared with New Zealand's 100%.
Sectors excluded include road and sea transport, which accounted for 19.5% of 2007 emissions, agriculture and forestry, 9.2%, waste, 2.8%, buildings and services.
Small industrial installations which emit less than 25,000 tonnes of carbon dioxide can opt out of the EU's ETS provided they have alternative reduction measures in place.
Climate Change Minister Nick Smith said agriculture's contribution to New Zealand's greenhouse gas profile meant it could not be ignored.
Agricultural emissions have increased 12% since 1990 while Australia's have fallen 6% over the same period, largely due to successive droughts.
"We in New Zealand just do not have the luxury of excluding agriculture when your sector is such a large portion of New Zealand emissions," Dr Smith told Federated Farmers.
Australian farmers were not getting off totally free, Dr Smith said they would face regulatory costs to reduce their emissions.
A Bill making changes to the previous Government's emissions trading scheme (ETS) would reduce the financial liability for average farmers in 2030 from $30,000 a year to $3000, he said.
The Bill, which was passed into law recently, changed the threshold for allocating New Zealand Units to industry, based it on intensity rather than absolute levels, and changed the phase-out period for industry support from 8% a year to 1.3% - the same as Australia.
He said it was "unrealistic" to include agriculture in the ETS by 2013, so entry was delayed until 2015 with a technical advisory implementation group to be formed next year to consider how to implement it.
He argued the ETS was the best way to deal with forestry and its role as a carbon sink, it provided more certainty about environmental gains and there was a political reason.
Dr Smith acknowledged that agricultural emissions per kilogram of milk fat and meat, have improved by 1.3% a year, a trend he said research can build on.
Federated Farmers president Don Nicolson said despite amendments to the ETS legislation, he still did not like it.
"We still do not like the ETS because it is a tax on production."
Among his gripes was the lack of specifics, especially the cost to individual farm businesses, with ministers saying it could cost sheep and beef farmers between $3000 and $8000 a year.
Mr Nicolson also dismissed claims markets were demanding action, saying that was not what people living overseas and his own investigations had revealed.
Being guided by marketers in the past had not achieved much for farmers.
"Farmers have jumped every stainless steel hurdle because they have listened to marketers, to two years ago having the lowest profit in 50 years."