Carbon credits pricing crashFriday 9 Dec 2011
The NZ media this week reported that a crash in carbon credit prices meant that the government had no option but to ban or drastically restrict the use of imported carbon credits of dubious quality, or the emissions trading scheme (ETS) could become a national embarrassment. The price of New Zealand units (NZUs) has crashed from NZ$22 in May to less than NZ$10 this week, stifling interest in developing carbon offsetting initiatives here, according to carbon market participants. The price crash has been so steep that by one calculation, if the price trend continued for another 100 days, the value of NZU credits would be zero. The result has been that those who have created NZUs – perhaps through planting timber on part of their farm – have almost abandoned the market. Wayne King from Carbon Market Solutions addressing the ForestTECH 2011 event in Rotorua this week said that currently at these prices there are understandably low quantities of NZU trades with few foresters wanting to sell and at the same time, large volumes of CER’s are being traded with the low prices very appealing to large emitters. The government has been made aware of the risk. In a prescient statement, the ETS Review Panel in a June report published in September said there was "a risk these units will flood the New Zealand carbon market and drive down the NZU price. This could impact on New Zealand's incentives to abate, including in particular on forestry investments and on the reputation and integrity of the ETS". For further information on this developing story check out this release | ||
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