The Government has begun talks with the Labour Party on the future of the Emissions Trading Scheme.
The talks come about three months after Labour offered to work with National towards a bi-partisan agreement on the scheme to reduce emissions of greenhouse gases blamed for causing global warming.
After initially ignoring Labour's approach, it is understood Climate Change Minister Nick Smith made contact with the opposition party just last week.
Dr Smith confirms talks have begun, but will not comment on their substance.
He says if agreement could be reached between National and Labour that would create a greater degree of stability regarding climate change policy, which would benefit business and investment.
However, Dr Smith says the Government does not need Labour's votes
Labour's climate change spokesperson Charles Chauvel says the party wants to ensure the emissions trading scheme has real integrity and to try to build consensus and create certainty about the design of the scheme.
Groups wary of economic benefits
Key production sectors say new economic analysis on the trading scheme hides its true effects.
The Government commissioned the study from economic analysts the New Zealand Institute of Economic Research and Infometrics as part of its review of the scheme passed last year.
The report finds the current scheme will reduce New Zealand's total economic growth by 3.5% by 2025.
But the Wood Processors Association says the real impact on specific industries will be much more variable and some rural communities will be badly hurt.
Federated Farmers says the benefits and costs in each sector and region must be spelled out much more clearly.
One of the report's authors says it would be useful to do further research on the industry-specific effects of the scheme.
