I thought all my good friends in the lucky country would find...

I thought all my good friends in the lucky country would find this article in yesterday's NZ Business Herald of interest.

"NZX Plans Carbon Market for 2008."

"Consortium hopes to be the main emissions broker for the Asia-Pacific region"

Sharemarket operator NZ Exchange and a number of leading businesses have confirmed they will establish a NZ-based carbon market to service the Asia-Pacific region.

NZX, with companies such as Air NZ, Meridian Energy, Contact and 42 Below as well as representatives of investment firms Goldman Sachs and ABN Amro have been examining the feasibility of such a market since December.

Yesterday the NZX confirmed it should be up and running by next year.

The group has presented its report to the Government which, although it has made encouraging noises, has yet to announce any firm plans to create allowances or rights to emit green house gases which could be traded.

However working group memeber and PW Coopers partner Julia Hoare said the market would not be dependent on the Government inroducing a carbon pricing mechanism. She said there was already a fast growing international trade in voluntary emission rights and to a lesser extent existing Kyoyo-based tradeable instruments. "But clearly the market would be larger if Government policy did go down an emissions trading route."

The market, due to be launched next year, will be called TZ1 standing for "Time Zone One."
Being the only market operating in this time zone means that with the right technology and regulatory settings, New Zealand can attract liquidity from other parts of the world," said NZX CEO Mark Weldon.

Weldon believes NZ should seize the opportunity to become the centre for carbon trading in the Asia Pacific region.

The next steps towards establishing the market were the determination of an ownership structure, trading rules, and clarification from the Government on whether a carbon credit was likely to be classed as a future, a spot product or a security.

PM Helen Clark said this year that the government was closely following private sector work on the development of carbon trading regimes and "will be willing to consider what legislative and and regulatory changes will be needed to put them into effect."

Weldon saw no problem finding companies willing to back the market.