Govt keeping open mind on agriculture ETS inclusion

The Government is keeping an open mind about future inclusion of agriculture in its emissions trading scheme (ETS), Agriculture Minister David Carter says.

The remark was in a memo he issued to Cabinet colleagues about the ACT Party working in concert with Federated Farmers to raise opposition to the ETS in rural communities.

Agriculture is not set to be included in the ETS until 2015, while transport fuels, electricity production and industrial processes will be included from July 1.

"Many of the figures being circulated in support of this campaign are at best misleading, at worse wrong and are simply aimed at raising fear amongst farmers," Mr Carter wrote in the memo.

"Wild claims such as that the ETS from this year will be costing the average dairy farmer up to $10,000 per annum are simply rubbish."

Mr Carter said the average sheep and beef farm would face $1475 more and the average dairy farm $3900.

The memo spelled out credits to the forestry industry through the ETS.

Under a heading "agriculture's inclusion", Mr Carter said the Government was "keeping an open mind, will remain flexible and are watching international developments closely".

Reviews around agriculture's entry into the ETS are planned for 2011 and 2014.

"These reviews are an opportunity to look at what our trading partners are doing. For example if major trading partners such as Australia have made no progress on their schemes, the Government would have to seriously reconsider including agriculture from 2015."

Mr Carter urged his colleagues to use his memo to rebut misinformation being spread in rural electorates.

He has been holding meetings in rural areas to talk about the issue and said he would keep doing so.

He told reporters this morning that ACT was trying to stake out an area of difference from the National Party.

"They are incorrect and that's the opportunity I wanted to give to caucus colleagues."

He had spoken to ACT MP John Boscawen about the issue and sent him a copy of the memo.

Labour leader Phil Goff said National was considering deferring agriculture again under pressure from its right wing colleagues.

"What that means is more of a burden falling on the average kiwi taxpayer and less on the emitter -- that means less incentive for the polluter to stop polluting."

Power prices were set to go up 12.5 percent this year, which would on its own soak up any tax cuts to minimum wage earners, he said.

Prime Minister John Key said the Government was taking a "sensible and very moderate" approach to climate change.

ACT leader Rodney Hide said while the ETS would mean about $3 per week per household in its first year, , that would go up considerably in following years.

Mr Hide said when it came to the farming sector ACT had been talking about what costs were going to be in 2015, whereas National was only talking about what costs would be from July 1.

Climate Change Minister Nick Smith said the increased cost for a dairy farmer from the ETS was equivalent to less than a 0.1 percent change in interest rates.

"It's no different to the cost any other business or consumer is facing, it's part of New Zealand picking up its responsibilities."

"If New Zealand is to maintain market access on the basis of our clean green brand it is very important for New Zealand to do its fair share around climate change..."

Dr Smith said the ETS was complicated and there were opportunities for people to make "political mischief".

"I think ACT is being quite disingenuous in the way in which they champion the cause of Kyoto forest owners and Rodney Hide insisting they receive their carbon credits, but when it comes to the other side of the ledger, where there are costs for businesses, insisting they all fall on the taxpayer. That's a socialise your loses -- profit your gains sort of ETS...it's not a fair or credible way in which to operate a credible emissions trading scheme."

In a statement Federated Farmers said the costs needed to be independently scrutinised because there were conflicting versions. It said electricity impacts on farmers alone would increase by $276 million and petrol and diesel by $252m.