Doing our bit to save the planet, as Climate Change Issues Minister Nick Smith calls it, will cost every New Zealand household on average $165 a year from today, as the emissions trading scheme comes into force.
While all countries had to act collectively to address climate change, Mr Smith said in an interview, a 23% increase in New Zealand's greenhouse gas emissions since 1990 left us with little choice but to respond.
"There is a long-standing Kiwi ethic that whether it's defence and security or whether it's reducing chlorofluorocarbons and their impact on the ozone layer, or greenhouse gas, we're small, but we'll do our fair share."
Critics say the Government is gambling with the economy by lumping it with the costs of the emissions trading scheme (ETS) for little discernible environmental benefit, a claim Dr Smith rejects.
The growth in New Zealand emissions would be addressed by putting a price on carbon and encouraging the planting of carbon-absorbing trees, the building of electricity generators that used renewable energy sources, and using energy-efficient technology.
Six months ago, the Government was criticised for being too soft on climate change, he said. Now, the claim was its costs were too great, even though the costs were half what the previous Labour government proposed.
Dr Smith was quick to take a bigger view on the merits of the policy, saying we had to do "our fair share" and protect our clean and green brand: "I think we have got the balance about right."
He also rejected claims the Government was leading the climate change response, saying New Zealand was 30th out of 38 signatories to the Kyoto Protocol to introduce an ETS.
A team of 40 officials to be employed by the forthcoming Environmental Protection Authority but working for the Ministry for the Environment and Ministry for Economic Development will administer the ETS.
Dr Smith stressed the ETS was not a heavily bureaucratic system, saying five oil, six electricity-generating and some large companies would have to account for emissions from the first compliance period beginning today.
Other sectors would be phased in.
Fuel companies already reported fuel sales, so it was a simple calculation to determine emissions, but he said it would be a new process for other industries, resulting in some compliance costs.
Each April, companies and industries will report their emissions for the previous year and the following month surrender carbon units equivalent to those emissions, in a process similar to that used for fishing quota management.
Dr Smith said the ETS was flexible and reviews planned for 2011 and 2014 would allow the Government to look at its effect on business and the economy but also to recalibrate its response relative to other countries.
He said the world was on the cusp of a revolution as significant as the shift from steam-powered energy to the combustion engine, but now the shift would be to greater use of alternative forms of energy and energy-saving technology.
Business New Zealand chief executive Phil O'Reilly said while many of his members opposed the ETS, it was the law and business had to live with it.
He took the view the best option was to get it modified to reduce the effect "and lessen the harsher effects on the economy".
The lobby group has asked the Government to consider three issues.
It wants the first review of the scheme to start by the end of this year and to specifically look at the effect on large food producers such as Fonterra which are exposed to the costs but, unlike large emitters such as New Zealand Aluminium Smelters, do not get an allocation of carbon credits.
Business New Zealand also wants the Government to look at the effect on exporting businesses too small to get carbon credits, but which still have high energy costs as a proportion of their total costs.
Mr O'Reilly would also like extra Government assistance to help improve the energy efficiency of small and medium-sized businesses.
There was a fear among business owners that the Government would continue on the ETS path oblivious to its effect, he said.
"If they do that, then I think they will be seen as being uncaring to the business community and the business community would be pretty annoyed."
