The farming industry says it's more logical that it leads the transition to agricultural emission pricing than having a new centralised levy.
Under a plan being considered by the government, farmers would start paying for emissions from next year, and be brought fully into the emissions trading scheme (ETS) from 2025.
The $50 million generated annually would be invested in technology and systems to help farmers reduce and measure emissions.
But farming leaders have proposed an alternative approach funded and led by the agriculture sector.
The Interim Climate Change Committee, in a report released yesterday, proposed a system of levies on individual farms, with rebates payable later, as a reward for good environmental practice.
"Farmers need to be able to measure and manage emissions from their own livestock on their own farms," Chairperson David Prentice said.
"But there is significant work involved in developing accounting and reporting systems to enable this.
"We estimate this to be at least five years off.
"So what do we do in the interim? We proposed an initial step over the next five years to price emissions at processor level through the emissions trading scheme."
But farmers want the levy-rebate scheme as soon as possible, and the emissions trading scheme ditched as an interim measure.
An alternative proposal put forward by eleven farming sector groups would have research in new technologies to lower emissions funded by levies they already pay pay to Federated Farmers, Dairy NZ and NZ Beef and Lamb.
"It's much easier to integrate this stuff with what the industry's already doing rather than going and collecting a whole bunch of money off the farmers and then trying to recreate or thrown that money to what's already going on," Federated Farmers Vice President Andrew Hoggard said.
National Party leader Simon Bridges told Morning Report there was no point in pricing emissions if farmers had no way of reducing how much gas their animals were producing.
"We will support a pricing or ... agriculture coming in to the ETS if certain criteria are met," he said. The criteria included use of science and technology and considerations about New Zealand's international competitiveness.
"That means actually investing in the science and the technology and the on farm tools.
"There may well be a price, it may well be agriculture comes into the ETS in due course, but I think we've got to work with farmers in an accord along the way before we get to that.
Mr Bridges said the technology might not be ready by 2025, when it is suggested farmers are brought fully into the emissions trading scheme, and the National Party would modernise the rules on biotechnology or genetic modification.
Under New Zealand First's coalition agreement, farmers will have to foot the bill for only 5 percent of their emissions from 2025 .
Victoria University professor of climate change Dave Frame said this 95 percent discount could undermine the whole scheme.
"It would be such a weak pricing it would do very little to change behaviour."
Greenpeace executive director Russel Norman said paying for 5 percent of emissions was too low for such a large, profitable industry, with a significant environmental footprint.
Dr Norman said the shift to intensive dairying over the last two decades had been possible only because farmers hadn't had to pay for their impact on fresh water or the climate.
Harry Clark, director of the Agricultural Greenhouse Gas Research Centre and a member of the ICCC, said requiring farmers to meet the full cost of emissions from their animals would put massive pressure on rural communities.
[audio' https://www.rnz.co.nz/national/programmes/ninetonoon/audio/2018704471/iccc-report-farmers-to-pay-for-some-emissions-by-2025 'Rural communities could suffer' - Harry Clark
The proposed subsidy was about creating a safety net, he said.
"It's 30,000 individual farming families who bear the cost," he told Nine to Noon.
"They can't necessarily pass on the costs of greenhouse gases - rural communities could suffer.
"Many industries under pricing policies have received what they term free allocation to ease the transition to a pricing mechanism."
The government would decide when to start reducing the subsity but it was possible new technology would lessen the need for it in time.