NZ’s fledgling carbon trading sector has been thrown into disarray by the Govt’s decision to shelve the Emissions Trading Scheme. While some form of emissions trading still seems the most likely long-term outcome, the Govt’s move is a major blow to carbon traders and brokers, who just a few weeks ago were gearing up for a lucrative new business opportunity.Now everything has come to a halt. EcoSecurities Group, one of the biggest players in the international carbon market, which was due to launch its business in NZ this week, has pulled the plug. EcoSecurities was planning to buy NZ forest sink credits and also sell secondary CERs, which are carbon credits generated by UN-approved projects in developing countries. The company has a portfolio of more than 400 CER projects, representing almost 120m tonnes of emissions reductions by 2012. EcoSecurities spokesman Greg Fahey is optimistic NZ will eventually proceed with an ETS similar to the shelved scheme but he is discouraged the Govt is revisiting the science of climate change with a Select Committee.

Mark Franklin, CEO of the TZ1 carbon trading platform, is urging PM John Key to give a clear signal NZ will eventually have an ETS. Franklin says everything is up in the air, because no one can predict the outcome of the Govt’s review. He says many businesses have already started setting up carbon accounting systems and don’t know whether to proceed or not. However, analysts are advising NZ businesses not to get complacent about plans to measure and reduce their carbon emissions. PricewaterhouseCoopers sustainability specialist Julia Hoare says business will have to account for its carbon, either through an ETS or a carbon tax.

NZ Business Council for Sustainable Development Chairman Nick Main says National signalled before the election it would review the ETS, so there is no real surprise. But Main says it’s hard to see a review of climate change science providing any benefit. He believes a review of the science only makes sense if NZ intends withdrawing from Kyoto, which is not National’s policy.

Outgoing Climate Change Minister David Parker used his last day in office to take swipe the Govt’s plans to set up a Select Committee to review the ETS. Parker says the idea of having a Select Committee examine whether or not climate change is really happening risks making NZ the laughing stock of the international community. He adds “at a time when the incoming US President, as well as the Govts of China, Aust and the whole of Europe, are convinced by the scientific evidence that climate change is real, the idea a Select Committee in NZ is better qualified to comment is patently ridiculous.”

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