Prime Minister John Key has dismissed as "nonsense" Treasury estimates that the Government's emissions trading scheme could cost taxpayers $110 billion by 2050.
The advice was provided to Parliament's finance and expenditure committee as it considered National's bill amending the current emissions trading scheme.
The proposed changes would involve free allocations of carbon credits to industries facing international competition.
But Mr Key says the Treasury advice is wrong.
"Treasury can't tell us what the deficit is going to be in December, let alone what's happening in 2030 or 2040.
"There are a number of moving parts there - carbon price, our international obligations, what technology is going to deliver."
Mr Key says if the Government accepted the Treasury advice it would overtax businesses and farmers by tens of billions of dollars over the next 40 years and that would slow down economic activity.
The Finance and Expenditure Select Committee became deadlocked on the Climate Change Response (Moderated Emissions Trading) Amendment Bill, and is unable to recommend it to Parliament.
The bill will now return to Parliament unamended.
