Tuesday, September 04, 2007

Trading carbon on the web

Meridian energy has begun trading carbon credits over TradeMe. The credits are from the Te Apiti wind farm, and CDM Gold Standard certified, which means they're as solid as you can get from the voluntary market (the only thing better is actual CDM credit). It's a good move to help push the voluntary market in New Zealand, but its also helping to set the price of such credits in New Zealand - and on that front its quite interesting. As of 20:00 tonight, the bidding on the three auctions (of 20, 20, and 1,000 tons) was at $1,000, $1,500, and $3,500 respectively. So the price is somewhere between NZ$35 NZ$3.50 and NZ$75 per ton. By comparisom, the cost of buying credits directly through CarbonZero (who aren't CDM gold certified because they deal in forests, but again are as solid as you can get and meet Kyoto requirments) is NZ$33.75 per ton. I guess some of the bidders don't know that though.

The other interesting point is that the prices we're seeing here are two to five times the prices used by the government in assessing the cost of its inaction under the Kyoto Protocol (Treasury uses a lowball price of around $14/ton). The government is relying on cheap international credit, rather than domestic emissions reductions, for that, but its telling that so far they apparently haven't bought any. If they actually know of any source of CDM or Kyoto credits at that price, then they should probably get cracking and buy it before the price increases.

Update: And at 9:00 the next morning the price is now between $75 and $100 $80 per ton. What crack are these people on?

Update 2: Mean culpa, mea culpa, ego can non tribuo (?). Or, in English, I can't bloody divide, and am out by a factor of ten on the business package (they're actually getting quite a good deal). I blame lack of coffee.