Government abandons NZ Carbon MarketThe New Zealand Government’s recent decision not to restrict the use of international carbon credits in the NZ Emissions Trading Scheme means the local NZ carbon market is likely to stay subdued for years to come. Due to oversupply the international carbon price has plummeted over 70% in the last 12 months, and because these units are eligible to be used in the NZ Emissions Trading Scheme, the NZ domestic unit price has followed the fall.
Compared with other carbon schemes NZ has few limits on international units. The European and Australian trading schemes, and the upcoming Californian scheme all place far more restrictions on the type and the quantity of international carbon credits that can be used. Limits on the use of international units leads to higher domestic carbon prices. In Europe, for example, the EU carbon permit is trading 60% above the price of the international carbon price.
By comparison the NZ carbon market has ground to a halt and large amounts of capital is being exported offshore to purchase cheap Chinese and Eastern European credits instead of being invested in local forests or clean technologies. More >>
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