Striking a balance

Having stitched up a deal with the Maori Party on its revised Emissions Trading Scheme - which has exercised environmentalists and received only lukewarm plaudits from two of the revised scheme's more notable beneficiaries, industry and agriculture - the Government might venture to suggest that since no-one is entirely happy it must have the numbers about right.

But not for nothing has the scheme, in its various incarnations, been dubbed "controversial"; wherever the balance was struck, it was never going to please and appease all parties.

Act New Zealand, for instance, remains the only confirmed climate-change denying party in the country and no amount of fiddling with the previous Labour-led government's scheme, save an almost total demolition, would have garnered its favour.

The Green Party, unsurprisingly, would consider any watering down of the scheme unacceptable, and the Maori Party, with major interests in forestry, farming and fisheries - and with large numbers of low income voters in its constituency - appeared not to want such a scheme at all, preferring a carbon tax.

And while some might question the Labour Party's apparent willingness to revisit its own legislation, even if its own priorities in the trade-off between environmental virtue and economic cost differed markedly from the Government's, it appeared to recognise the political expediency in reaching a broad accord over an issue that will reverberate beyond the lives of the next several parliaments.

In the event, having begun negotiations with Labour, National left it like a bride at the altar and ran off with the initially coy Maori Party.

This failure to establish a two-party consensus will have consequences if and when the political pendulum swings back to the Left and if National's scheme comes to be seen - as is already being claimed by its opponents, including spurned Labour leader Phil Goff - as so compromised as to be essentially meaningless. But this is certainly not how National, nor its supporters, however lukewarm, see it.

The big question for the Government has been how to be seen - ahead of the Copenhagen climate meetings in December - to be making a meaningful contribution to mitigating the effects of emission-induced climate change as a good global citizen should, but to be so doing in a manner that does not place an undue burden on industry and agriculture, and thus circumscribe economic growth; nor, in the midst of a recession, place too much immediate cost on the individual consumer.

The proposed new scheme, which it will be able to pass into law with the support of Peter Dunne's United Future vote, and that of the Maori Party, seeks to achieve this by, in the first instance, delaying entry of agriculture into the ETS from 2013 until 2015.

Likewise the proposals have electrical and industrial processes delayed by six months until July next year, but also will offer liquid fossil fuels and industrial processes a "two-for-one" deal until 2013 whereby these sectors have to surrender only one carbon unit for every two emissions they make.

In addition, producers with overseas competitors will be able to increase their emissions without penalty as long as they can prove they are efficient.

On the domestic front, the Government claims that the proposed changes will restrict the rise in electricity prices to 5% rather than the 10% envisaged under the current scheme, and likewise contain the rises in petrol and diesel to about 3.5c a litre as opposed to 7c.

The changes intentionally put the brakes on what the previous Labour-led government's critics often regarded as New Zealand's reckless charge to the front of the queue on such matters. And they have found some degree of support from the business, agriculture and energy sectors on mitigating the potential economic drag of the ETS.

Mindful of the degree of environmental literacy in the electorate, the Government has been at pains to stress the need to address the climate change issue.

But like Labour, Greenpeace has been scathing in its assessment of the changes, calling them "pathetic" and suggesting that under the new scheme "emissions will just keep rising and taxpayers, rather than polluters, will have to pay for them". Whether this is true or not, only time will tell.

In the face of climate change with its dire predicted consequences, all countries are having to grapple with striking a similar balance, nuanced according to the demands of their individual economies and political sensitivities.

This is new territory. There is an element of guesswork and gamble in reaching all such accords. National has, for better or for worse, both spurned Labour's hand and taken a conservative approach. In the short term this is likely to pay handsome political dividends; in the longer term, it may prove to be less advantageous - electorally and environmentally.