Government Blamed for Low Carbon Price 

by | May 23, 2024

The carbon price hit a 10 month low in the secondary market with prices trading at about half the price of the commodity’s all time high price of $88.50 with commentary from John O’Brien of CMS.

John O’Brien, Carbon Market Solutions managing director, says the drop in price shows the market has lost confidence in the government.

“The market is reacting to the government’s actions rather than talk – with changes around the RMA and the Clean Car Discount among other things, changes in policy are going to make it more difficult and potentially more expensive also for New Zealand to meet its Paris Agreement target – and make it necessary to purchase even more carbon credits offshore.

“Yet, there is no appetite whatsoever at the current time for the government to be writing cheques for billions of dollars to purchase carbon credits offshore, in order for New Zealand to meet its ambitious Paris Agreement target.”

O’Brien says the market is highly sceptical that the government will follow the Climate Change Commission’s recent advice to reduce the unit surplus by effectively halving the number of carbon units available at auction from next year. The Climate Change Commission has estimated the surplus was 68 million units at the end of September 2023.

“If the government is repeatedly ignoring its advice, why do we have a Climate Change Commission costing the New Zealand taxpayer over $15 million a year for not a single tonne of C02 reduced? ”