The Government's amended Emissions Trading Scheme (ETS) has passed its final hurdle and is set to become law.
The legislation was passed by 63 votes to 58 shortly before 6pm on Wednesday with the support of the Maori Party and United Future.
Under the new scheme businesses will be given more time to adjust to the emissions regime and the cost is passed on to taxpayers.
But households will also face lower increases in the price of power and petrol, because the obligations on those industries will be more relaxed.
Climate Change Issues Minister Nick Smith welcomed the passing of the legislation, telling Parliament: "This bill is about implementing for New Zealand a workable and affordable scheme that will provide an incentive to reduce emissions and to encourage afforestation."
Commissioner urged MPs to reject it
Earlier on Wednesday, the Parliamentary Commissioner for the Environment had urged MPs to vote against the bill, saying that it would undermine the current ETS and fail to reduce greenhouse gas emissions.
While the current scheme put a price on emissions in order to limit them, Ms Wright said, the amendments almost removed the price signal for some - meaning less incentive to invest in low-carbon-intensive technologies.
Throughout Tuesday evening and most of Wednesday the Climate Change Response (Moderated Emissions Trading) Amendment Bill went through its committee stages as Parliament considered more than 100 pages of last-minute changes.
The legislation was pushed through so that it could become law before the Copenhagen climate change conference next month.