Prime Minister-designate Jacinda Ardern has suggested the current emissions trading scheme may be scrapped and replaced with carbon and other emissions taxes.

Ardern has given more detail on the new Government’s approach to climate change, including whether agricultural emissions would be included in any scheme for pricing emissions.

She also suggested New Zealand First had secured some form of compensation for farmers and regions hit by the inclusion of agriculture in the pricing mechanisms for emissions.

Labour promised to include agriculture in the current emissions trading scheme, while both the Greens and New Zealand proposed scrapping the scheme.

The Greens proposed replacing it with a Kiwi Climate Fund created from the proceeds of taxes on emissions and other pollution on all sectors of the economy, including farming.

The Greens expected an independent commission would set a tax of $40 per tonne of carbon dioxide emissions, $6 per tonne of nitrous oxide emissions from agriculture, $3 per tonne of methane emissions from agriculture and a $40 guaranteed payment for each tonne of carbon sequestered by eligible forests.

The fund would be able to pay a dividend of $250 per person by 2020, which equates to around $1.2 billion.

“We have absolutely stuck to our goal of a net zero carbon emissions by 2050, a Zero Carbon Act and an independent Climate Commission.”

New Zealand First proposed using the funds spent on the current emissions trading scheme to fund research and development and climate change adaptation.

Labour, Greens and New Zealand First all proposed a Carbon or Climate Change Act that set carbon budgets and created an independent Climate Commission. Labour and the Greens proposed net zero emissions by 2050.

The new Government would be “absolutely focused” on climate change, Ardern said.

“That will include a Zero Climate Act, that will include an Independent Climate Commission. That will include making sure we have all gases, all sectors emissions trading scheme,” he said.

Asked if Peters had agreed to include agriculture in any emissions pricing scheme, she said: “You will see some of the elements of Mr Peters’ advocacy on behalf of the regions reflected in our agreements, but I’d like to wait until those agreements are released early next week.”

“We have absolutely stuck to our goal of a net zero carbon emissions by 2050, a Zero Carbon Act and an independent Climate Commission,” she said.

Asked if the ETS would stay in place, she said: “We all agree the need for a tool to reach our goals, and that includes a pricing on carbon.”

That left open the option for carbon taxes, rather than the current emissions trading scheme.

She was then pressed again about the extra costs on farmers of being included in any emissions pricing scheme, she said: “It would only be fair to reflect that there was advocacy from New Zealand First around making sure there is support for the regions and making sure that’s reflected strongly in the agreement with them.”

Ardern announces Labour MPs

Earlier, Ardern named the 21 Labour MPs who will become ministers in her incoming government after a meeting of the party’s caucus.

With New Zealand First securing four Cabinet positions and one undersecretary role, and the Greens three ministers outside Cabinet and one undersecretary, 21 ministerial spots were available for Labour MPs.

Sixteen Labour MPs will become Cabinet ministers: Ardern herself, David Clark, Clare Curran, Kelvin Davis, Chris Hipkins, Iain Lees-Galloway, Andrew Little, Nanaia Mahuta, Stuart Nash, Damien O’Connor, David Parker, Grant Robertson, Jenny Salesa, Carmel Sepuloni, Phil Twyford, and Meka Whaitiri.

There are five Labour ministers outside Cabinet: Kris Faafoi, Peeni Henare, Willie Jackson, Aupito William Sio, and Megan Woods.

Addressing media, Ardern said she had been “absolutely spoiled for choice” when choosing her ministers.

“It will be a powerful government, it will be one that brings real experience, and I look forward to bringing that team to the house.”

Ardern said she was still considering whether to split up some existing portfolios, such as primary industries, transport and economic development, to indicate the government’s priorities.

“I don’t want to split things beyond what makes sense, in some areas I’ll look to bring things together, but I also want to make sure we put emphasis on the areas that are of great importance to this government.”

Ardern confirmed she would take a portfolio related to children’s issues – although she would not be the Children’s Minister – while she would maintain the tradition of prime ministerial responsibility for national security issues.

She would spend the weekend allocating portfolios across MPs, including discussions with New Zealand First over its ministerial spots. The Green Party had already signed off its ministers outside of Cabinet, but Ardern would announce all positions at the same time.

Ardern said Labour’s 100-day action plan would “broadly stay the same”, although it was possible there would be one addition and one subtraction.

Prime Minister-designate Jacinda Ardern is talking up the movement for change. Photo: Lynn Grieveson

Cannabis referendum may be binding

Referring to a referendum on the legalisation of cannabis promised to the Greens by the 2020 election, Ardern said it could be binding.

She believed New Zealand needed to have a mature conversation about the issue vexing several countries, but said personally she was in two minds.

“During the campaign I was very open about the fact that I do not believe people should be in prison for the personal use of cannabis, on the flip side I also have concerns about young people accessing a product that can clearly do harm and damage to them.

“I’m seeking a way through this debate alongside New Zealand so I’ll be looking to see where this debate takes us, the view from the public, and whether or not we can find a workable solution.”

Any referendum would cost less than the John Key-led flag referendum that was a two-stage process, she said.

Her comments about shifting drug policy from a justice-based to a health-based approach suggest the work of former Associate Health Minister Peter Dunne in the area will continue, with a Green Minister possibly picking up the task.

Swearing in on Thursday

Ardern said she would speak to Governor-General Dame Patsy Reddy on Friday afternoon to confirm she held the confidence of the House, and expected all the new ministers would be sworn in at a ceremony on Thursday morning.

Before the meeting, the Prime Minister-designate received a raucous standing ovation when she entered the caucus room, and told the MPs she would lead a government of change that they could be proud of.

“Labour remains a party that at its core is based on making sure that we defend the rights of workers in New Zealand.

“Through these negotiations and this period we’ve stayed true to who we are and we have found allies in this Parliament who wish to join with us in building a fairer New Zealand.”

She also praised the support she had felt from her MPs during the past few weeks, even if they had been in the dark about how things were progressing.

“I thank you for your enormous patience, it’s extraordinary that through that period of negotiations not once did I get a message saying ‘What’s going on?’ ”

Prime Minister-elect Jacinda Ardern is under the microscope as she moves ahead with her incoming government’s plans. Photo: Lynn Grieveson

Water tax backdown?

Prime Minister-elect Jacinda Ardern has hinted at a backdown on Labour’s plans for a water tax following its coalition deal with New Zealand First.

During the election campaign, Ardern announced plans to tax farmers and irrigators, with revenue going towards cleaning up waterways.

However, New Zealand First leader Winston Peters spoke out against the policy during the campaign.

Speaking to RNZ’s Morning Report on Friday morning, Ardern would not confirm whether a water tax was still alive but seemed to suggest a U-turn of sorts could be coming.

“We remain committed to cleaning up New Zealand’s rivers but I absolutely reflect now that Mr Peters did take a strong view on the mechanism that we were choosing to use,” Ardern told RNZ.

“So you will see what has happened in that final agreement … but that was the firm view he took.”

Ardern said she was confident the coalition with New Zealand First and the Greens would last the full term, citing the nature of the agreements and her relationships with Peters and Green leader James Shaw.

“One [with Shaw] is long-standing and the other has a very firm foundation based on these negotiations.”

Ardern denied the new government was a coalition of losers, saying it was formed by parties with a majority of votes at the election.

The presumptive PM will hold a Labour caucus meeting at 2pm today, where her party will elect its own MPs to Cabinet.

New Zealand First has been given four Cabinet positions and one undersecretary role, while the Greens will have three ministers outside Cabinet and one undersecretary.

That should mean about 20 ministerial spots are still available for Labour MPs.

Ardern has said Labour’s written agreements with New Zealand First and the Greens will be released next week.

Green wins outlined

Meanwhile, the Green Party’s apparent policy win of a referendum on legalising cannabis has attracted attention.

A letter to Green members shared on Twitter shows the party appears to have secured a referendum on legalising the personal use of cannabis “at, or by, the 2020 general election”.

The letter outlines other policy gains in climate change, overhauling the welfare system, boosting the conservation budget, improving water quality, boosting mental health services, amongst other things.

The Green Party’s delegates overwhelmingly backed the party’s confidence and supply deal with Labour, despite its ministerial positions being outside of Cabinet.

The letter gives some idea of why the party felt it had won enough changes to justify signing on with Labour and New Zealand First.

Sam Sachdeva is Newsroom's national affairs editor, covering foreign affairs and trade, housing, and other issues of national significance.

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