Estimates Of Kyoto Cost For New Zealand “Off The Mark”

The European Carbon Investors and Services Association (ECIS) today responded to some claims in New Zealand that an emissions trading scheme would increase New Zealand's Kyoto compliance costs, describing them as "off the mark".

"Emissions trading has been demonstrated in Europe, Japan and the US to be a very cost-effective way of meeting environmental targets and the same will apply to New
Zealand,” said Geoff Sinclair as Secretary of ECIS.

"The costs that some groups in New Zealand are proposing as the cost of carbon are out of line with market reality."

“Some commentators in New Zealand are also saying that the Government can buy cheaper carbon credits than the private sector,” added Mr Sinclair. “In the real world, many governments have already discovered that they have to compete with the private sector on the same footing.”

Some estimates by commentators of the Kyoto cost assumes a per-tonne cost for carbon of 35-50 euros (NZ$70-100) a tonne. But broker quotes for Kyoto-compliant carbon credits that can be bought in the market fall in the 4-15 euro range (NZ$8-30).

"Some of the price estimates for New Zealand are even higher than the European price. Europe’s credits tend to be the most expensive in the World because of specific conditions in the European Trading Scheme but still cost a third less than the lower end of some estimates being espoused in New Zealand."

ECIS notes that officials from the New Zealand Government have engaged in considerable dialogue with the carbon markets and would welcome similar dialogue with the private sector.

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