Depending where you stand, the Government's emissions trading scheme is either a bold move to address climate change or a reckless step into the unknown.
The Government's emission trading scheme (ETS) policy is about to be heard by the Finance and Expenditure Select Committee, but it seems that while there is widespread support for its general direction, its details have few supporters.
Warnings from industry, exporters in particular, have been vocal and blunt - that, in its current state, the ETS would harm the productive sector and the economy.
That view finds support from the New Zealand Institute of Economic Research (NZIER), which warned last week the ETS would make firms less competitive.
NZIER chief executive Brent Layton estimated that by 2025, $6 billion (2.1%) would be wiped off gross domestic product and by 2012 an estimated 20,000 jobs lost.
Agriculture, a contentious point in the ETS debate, would be hardest hit.
Because of its economic importance and limited ability to reduce emissions, especially methane from livestock, agriculture, the country's largest source of greenhouse gas, would not come under the ETS until 2013.
Dr Layton said the sector could not make a quick adjustment and its ability to do so was reliant on unknown future improvements in technology.
To reduce emissions, agricultural production would have to fall, which would hurt the economy, with the slack taken up by "a less-efficient overseas producer not covered by an ETS scheme".
Rural economies would be hit harder than the service-based economies of Auckland and Wellington, with dairy land losing 40% of its value and sheep and beef land 23%.
He said 70% of electricity production was already from renewable sources and there was little scope for future efficiency gains.
Given the economy was already "faltering", Dr Layton said the ETS as proposed would have a major impact through higher prices, lower export earnings and a lower standard of living.
It was admirable that New Zealand was playing its part in reducing global warming, but Dr Layton said it should not be at a high cost to the economy.
Paying directly for emission reductions out of general taxation was cheaper and more effective than the ETS, as it was designed.
If the Government wanted to continue with the ETS, Dr Layton said the allocation and phase-out rules needed amending to minimise costs to the economy.
The Sustainability Council also has real concerns, but from a different perspective.
Its executive director, Simon Terry, said the ETS would transfer wealth from road users, households and small and medium enterprises (SMEs) to farmers and large industrial emitters and result in little reduction in emissions.
"Households, road users and SMEs will be billed for $4 billion of total net payments of $4.4 billion, resulting from the ETS up to 2012 [based on the current world price for carbon credits of about $30 a tonne].
"As the great bulk of transport fuel charges are paid directly or indirectly by SMEs and households, it is these groups that will carry the ETS."
Agriculture alone would receive a subsidy of $1.31 billion up to 2012, Mr Terry said.
The council believed the Government should not create the New Zealand unit because it allowed "the massive transfers of wealth to take place off the Government's balance sheet and out of clear sight".
It urged the use of existing carbon currencies and for all emitters to pay the carbon charge relating to their emissions.
Nationally-significant industries or those facing difficulties could receive Government subsidies which would be transparent.
"A key benefit from sharing the Kyoto bill equally across the whole economy is that this would incentivise agriculture, especially dairy farmers, to reduce emissions," Mr Terry said.
The current ETS system would reduce gross emissions by less than 2% during the next five years, he said, leaving New Zealand's gross emissions about 30% above its Kyoto target in 2012.
Climate Change Minister David Parker said New Zealand was the only country to include agriculture in such a scheme, and to rush the sector's inclusion sooner than 2013 would harm the economy.
Agriculture Minister Jim Anderton agreed, saying the sector was too valuable to the economy to put it at risk.
"It is too important to all New Zealanders' standard of living to expose the sector to carbon costs at a pace that significantly disadvantages it relative to international competitors."
But the Cawthron Institute warned that agriculture might not react until it needed to in 2013, and the Government should look at ways to encourage early emission reductions.
Between now and 2013 the dairy industry was likely to expand and to intensify.
Dairy Companies Association of New Zealand (DCANZ) said the ETS would load the sector with $500 million in extra costs by 2025 unless changes were made, while farmers and rural processors warned it could compromise New Zealand's ability to produce affordable food.
DCANZ chairman Earl Rattray feared the ETS could export the carbon emission problem offshore, as industries relocated to countries without such a scheme.
While accepting the need to reduce carbon emissions, primary industry bodies said the ETS could be harmful, as there were no effective tools to reduce methane emissions from livestock.
"Our sector faces significant challenges in entering the ETS," said Mr Rattray.
"Firstly, we're still working on the tools required to make significant emission reduction on farm.
Secondly, we're an export-orientated industry whose competitors are unlikely to be exposed to a cost of emissions any time soon and this will put us at a real disadvantage."
The Cawthron Institute estimates methane reduction technology could be 10 to 15 years away.
DCANZ recommended an ETS system that focused on improving the emission's efficiency of each unit of production rather than capping total production.
Federated Farmers president Charlie Pedersen said the organisation was still calculating the impact of the emissions trading scheme (ETS), but warned that even at the best-case scenario the higher costs "could spell the end of some food production in New Zealand".
Mr Pedersen said his organisation accepted New Zealand had to be a world leader in sustainable food production, but the issue was whether consumers would pay to cover the higher cost of production.
A joint submission from Meat and Wool New Zealand, Meat Industry Association and Deer Industry New Zealand reiterates that concern, saying New Zealand exporters were compelled to enter the ETS while competitors were not.
"In other words, the competitiveness of New Zealand exporters is at risk."
This would encourage businesses to invest in countries where there was no ETS, transferring the greenhouse gas emission's problem - what is called emissions leakage.
The ETS proposes making rural processors - meat companies, dairy processors and fertiliser manufacturers - responsible for carbon credits, rather than farms, where most of the sector's greenhouse gases are produced.
The red meat industry said the system failed because it did not offer farmers incentives to reduce greenhouse gases.
"The parties believe that to be efficacious, the Bill must specify farmers as participants in the NZETS, thereby incentivising those who can mitigate greenhouse gas emissions with appropriate market rewards for mitigation."
The meat industry requests that after year one, the amount of assistance to trade-exposed industries be determined on the basis of "regular, objective analysis of requirements," and based on mitigation ability, implementation of similar policies in competing and trading countries and changes in intensity of emissions due to productivity improvements.
The sector also asks the Government to retain New Zealand Units at a capped price as a safety net against a liquid market.
Mr Parker hinted last week that he was prepared to listen to some of the ideas.
