Polluter pays... less now.

Business is happy and we can only conclude the planet is commensurately sad:

Large industrial emitters have secured three things they argued for consistently. One is a price cap, set at $25 a tonne, at least until the end of 2012. Beyond that there is no commitment of a price cap like that proposed in Australia, though a review in 2011 might reconsider the issue.

Another is an allocation of free units based not on what plants emitted in some arbitrary base year (90 per cent of 2005 emissions) but on an intensity basis. On that basis how many units an emitter gets free will depend on their performance relative to an industry average, reducing the carbon cost of increased production at least by relatively efficient firms.

If you think this is jacked up to favour the big polluters like the diary industry now wait until they start another round of roll-backs:

The Greenhouse Policy Coalition which represents the energy intensive sector, said a slower phase-out of assistance to 2050

Back to 2050 perhaps? Someone's been inhaling too much methane.

The situation is still fluid however. We are talking about a tax system in aid of environmental policy and the ETS in this country is supposed to be able to fit in with a global system where the credits can be transferrable. This is a monumental undertaking, but it seems the easy option of cutting a deal with the Maori party (instead of finding a consensus with Labour that would make the pact durable) was just too tempting for the Nats and the interests they represent:

Carbon deal lifts taxpayers' bill

A deal between the Government and the Maori Party on emissions trading legislation will halve the impact on power and petrol prices over the first 2 years of the scheme.

But those concessions, and more generous terms for large industrial emitters and farmers, will transfer the cost of meeting Kyoto targets to taxpayers. The cost will be at least $400 million by 2013 and possibly much more thereafter.

The existing scheme, passed in the final days of the previous Government, would have increased power prices by about 10 per cent or 2c a kilowatt/hour and petrol and diesel prices by about 7c a litre.

That is at current international prices for tradeable rights to emit the greenhouse gases blamed for global warming which oil companies and coal or gas-burning electricity generators will have to buy and surrender to the Government. They would then pass the cost on to consumers.

The Maori Party regarded this burden as falling disproportionately on low-income households. The deal with the Maori Party gives the Government a bare majority for amending legislation that makes the emissions trading scheme more emitter-friendly, at least to the select committee stage.

Farmers want out of ETS until 2043. Well we can't accuse them of not thinking inter-generationally about these issues. Their children will be being given pollution breaks when they take over the farm too if they have their way.

The Maori Party will cop a lot of flack for this move. Is containing a petrol price rise to 3.5c, or whatever it will be, worth the political fallout and voter erosion to the Greens? The conclusion must have been yes.