Wellington, May 24 NZPA - When New Zealand's emissions trading scheme (ETS) starts in just over a month households will be paying a "modest" $3 a week, Prime Minister John Key says.
Petrol prices were expected to rise by three cents a litre and electricity by 5 percent when the ETS starts on July 1.
"The question is for a household, are they prepared to pay $3 a week for the insurance premium of our environment and I think the answer to that is yes," he told TVNZ's Breakfast.
New Zealand had to bring in an ETS, despite Australian delays in implementing a similar scheme, because without it our goods "very likely" would be rejected internationally.
Of the 38 countries that signed the Kyoto protocol, 29 have an ETS, Mr Key said.
Australia had indicated it was going to bring in an ETS soon and had introduced legislation to regulate sustainable energy which would increase power prices by 7.1 percent -- more than New Zealand, he said.
"When people say to you, 'gosh New Zealand's going to lead the world and they'll be the only one with an ETS', not true.
"If you really believe, and I do, that all these other countries are eventually going to have some response ... we may as well start very gently."
The aim was to change people's behaviour and the Government would not make money out of the ETS, Mr Key said.
Over five years the Government would pay $1.6 billion to foresters to plant trees. It would get $900 million from taxpayers and $600m from other ETS revenue gathering, he said.
Climate Change Minister Nick Smith told Newstalk ZB information sessions would be held around the country next month for households, farmers and small businesses.