Nick Smith

Wellington, Nov 25 NZPA - The bill that sets up the Government's new emissions trading scheme was passed into law today on a 63-58 vote in Parliament.

Climate Change Minister Nick Smith said the Government was serious about climate change and the emissions trading scheme (ETS) was an important first step.

"New Zealand has been going round in circles for a decade on how to impose a cost on carbon pollution," he said.

"This bill means that from July 1 next year there will be a price on carbon and an incentive for afforestation."

The Government was able to pass the bill because it negotiated an agreement with the Maori Party, giving it a narrow majority of votes.

Labour, the Greens, the ACT Party and the Progressive Party opposed the bill.

Charles Chauvel, Labour's climate change spokesman, said the legislation was fundamentally flawed.

"It is economically irrational, socially inequitable, environmentally counter-productive and fiscally unsustainable."