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New Zealand carbon market hotting up

New Zealand carbon market hotting up

New Zealand’s carbon market is on the move, breaking the $10 barrier today, says Carbon News, the country’s specialist daily carbon market publication.

“Today’s sale of 15,000 spot NZUs (the domestic carbon unit) at $10 is a milestone,” said Carbon News publisher Adelia Hallett.

“It’s the highest they’ve been since the massive price collapse of 2011.”

The break-through sale, on the CommTrade platform, comes on the heels of the historic Paris Agreement on climate change in December, in which global leaders pledged to keep global warming well below 2 degrees.

It is also as the New Zealand Government reviews the Emissions Trading Scheme – its key policy for cutting this country’s greenhouse gas emissions.

“Carbon prices rose 50 per cent last year, and have gone up another dollar this year,” Ms Hallett said.

“That’s partly because the Government moved last year to stop the importation of cheap foreign credits into New Zealand, but is also because the market is reading the signs, and can see that demand is going to increase.”

One of the key changes to the Emissions Trading Scheme being considered by the Government is the scrapping of the so-called one-for-two – a measure introduced after the Global Financial Crisis, requiring industrial emitters to surrender just one carbon credit for every two tonnes of liable emissions.

“Depending on what decisions are made about the allocation of free credits to some heavy-emitting industries, scrapping the one-for-two could double demand, and that will put a corresponding pressure on prices,” Ms Hallett said.

Carbon News, which has been published since 2008, went daily last month in response to increasing market demand for information.

ENDS

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