NZ emissions plan upsets farmers

Farmers in New Zealand have criticised a bold plan by the government to make the country carbon neutral by 2040.

The agricultural sector thinks the plan to reduce net emissions of greenhouse gases to zero is unsustainable.

Concerns have also been raised by steel companies, which have insisted that a proposed emissions trading scheme would make them uncompetitive.

The government is trying to win support from minor parties to legislate on the scheme before an election this year.

'Economic sense'

Beef and sheep farmers believe the trading system will damage their business.

They have insisted that they have met their obligations under the Kyoto Protocol and that their emissions are below what they were in 1990.

Agriculture emits about half of New Zealand's greenhouse gases.

The concerns of farmers have been echoed by other sectors, including the steel companies.

But Climate Change Minister David Parker says the proposal makes good economic sense.

"The emissions trading scheme puts the right incentive into the economy to reduce emissions and therefore reduces the cost of your international obligations. It doesn't cause a cost, it reduces it," he said.

That assessment has been challenged by some economists.

The New Zealand Institute of Economic Research said the emissions trading system would cut the country's income by US$4.4bn.

The government's ambition, however, remains undimmed.

It wants 90% of electricity to be generated by renewable sources by 2025 and hopes to encourage large numbers of drivers to switch to electric and hybrid cars.