Greenpeace says it will not give up on its campaign for a more ambitious greenhouse gas emissions target after the Government announced it would be seeking a reduction target of between 10 percent and 20 percent below 1990 levels by 2020.
The target will be part of New Zealand's negotiating position at an international climate change conference later this year and the final target would depend on how those talks went.
Prime Minister John Key said the targets were credible and the cuts of 40 percent called for by Greenpeace would cause too much economic damage.
Greenpeace senior climate campaigner Simon Boxer said the target was too low and it was wrong that it was conditional on other countries doing more.
"We have a long long way to go before New Zealand is a constructive player at the United Nation's climate negotiations in Copenhagen in December," Mr Boxer said.
"Ten to 20 percent does not even put us at the lower rung of what the science says is required. They have fired a dart and the dart hasn't even hit the dartboard."
The Green Party also said the Government must be forced to raise its targets through a public campaign in the run up to Copenhagen.
Mr Key said a 10 percent to 20 percent reduction was close to Australia and other countries and well above the United States.
The target would be met by reducing domestic emissions, storing carbon in forests through more tree planting and purchasing emission reductions from other countries.
Dr Smith said Cabinet had also decided that an emissions trading scheme covering all sectors would be implemented and would be aiming to finalise details of this before the Copenhagen meeting.
It was difficult to estimate how much it would raise costs for households as this depended on the price of carbon and how people changed their behaviour.
One study has estimated that a 15 percent reduction would result in a drop in disposable income from $49,000 a year to $47,650 in 2020.
Petrol prices could rise by between 3.7 cents a litre and 12.3 cents percent a litre dependent on the price of carbon.
Dr Smith said the target balanced economic opportunities with environmental responsibilities.
National was still committed to a 50 percent reduction by 2050.
Treasury and many business groups have suggested an even lower reductions than 10 percent.
