NZ now a joke in Europe, says carbon trader
November 21, 2008
New Zealand now a joke in Europe, says carbon trader
A leading New Zealand carbon trader says international markets can no longer take New Zealand seriously, carbon trading has come to a standstill and experts are warning business not to think carbon pricing has gone away.
Specialist news service Carbon News (www.carbonnews.co.nz) this morning reports broker Nigel Brunel, of OMF Financial, as saying New Zealand is “a bit of a joke in Europe at the moment” following the National-Act agreement to suspend the emissions trading scheme.
Carbon News quotes Brunel as saying major players in the European market – which was last year worth $US55 billion – have been seriously interested in using the emerging New Zealand market to complement the European market.
“We are the antipodes of Europe,” Brunel said. “Their time zone is the exact opposite of ours, and there’s a real opportunity to have a 24-hour carbon market that starts in Europe and when they go into their night we take over.
“There is real interest in that because carbon is such an important market over there. Some very big players were very keen to establish a market down here because of the ability to then create a 24-hour market.
“This was New Zealand’s opportunity to reinvent its financial markets by being the Asian centre of the carbon trade.”
But this week’s announcement that the incoming government will put the ETS on hold pending a review that will go as far as considering a carbon tax instead of an ETS and will re-examine the validity of the science behind climate change, has jeopardised everything, Brunel says.
“We have just fallen off the radar in Europe,” he said. “They are saying ‘all you do is talk. You’ve been talking since 1992. You are all talk and no action. You maintain that you are so clean and green and try to be leaders and all you do is nothing. You make a decision and then you change your minds. How can we do business with people like that? We can’t take your seriously’.”
Brunel says that trading in New Zealand has ground to a halt in the wake of the announcement that the scheme is being delayed.
Meantime, Carbon news reports prominent law firm Buddle Findlay as saying New Zealanders shouldn’t buy or sell carbon credits until the Government’s plans for the emissions trading scheme are clear.
Buddle Findlay says that the new government’s decision to delay the ETS has brought the carbon market to a standstill, but is warning clients not to think the whole issue has gone away.
“People should hold-off sealing any deals until more information is available about the delay and the review,” commercial law partner Steve Nightingale told Carbon News.
“More detail should be available within a couple of weeks, because Parliament is being recalled on December 8 and legislation to delay the scheme will need to be introduced shortly after that.”
But he warns that the scope of the delay might be more limited that it appeared at first, and business should not be scuppering their carbon plans.
“In the case of forestry, for instance, that sector already has rights and obligations accruing from January 1 this year, and there are very strong policy reasons not to delay the NZETS' implementation insofar as forestry is concerned,” he said.
Meantime, PricewaterhouseCoopers partner and sustainability specialist Julia Hoare says New Zealand business will have to account for its carbon – regardless of whether it is through an emissions trading scheme or a carbon tax.
“The sooner New Zealand businesses understand what a price on carbon means – whether it’s delivered through an ETS or through a carbon tax – the better,” Hoare told Carbon News. “That’s clearly the message at the moment. Whatever the politics and mechanics of it might be, we are moving into a carbon-constrained world, and business has to understand that.”
Hoare is advising clients not to be lulled into a false sense of security by the fact that the new government has announced it will delay the scheme.