Citola Blog
New Zealand: Insurmountable Opportunities?
Does any of this sound familiar?
There’s a lot going on - a great deal, in fact . It’s all very exciting. But you’re not quite sure what to do. This is the kind of situation that investors in the ecological space often find themselves in – they are surrounded by what you might call insurmountable opportunities.
As the Australian Emissions Trading Scheme (ETS) shoots the political rapids, we’ve been keeping a weather eye on developments in other countries. New Zealand ratified its own ETS in December of last year, but there’s still a way to go before the detailed guidelines of how it might actually operate are worked out.
“We’ve had a lot of interest from investors, but there’s a general lack of awareness amongst the professionals – financial advisers, accountants, lawyers and the like – who typically advise them,” said one of Citola’s Kiwi contacts.
New Zealand has been an early adopter of the ETS concept – witness the establishment of organisations such as the Kyoto Forestry Association. But the commercial market lags far behind the general (and - dare we say it? - slightly unfocused) enthusiasm.
The basic principles seem to be that the New Zealand government wants to promote a certain type of fir tree as its preferred Instrument for create forestry carbon sinks. The trees have to be planted according to a government-set timetable to qualify as generating tradable carbon credits. And for anyone who wants to fell a tree, take the timber and re-plant there will be heavy carbon liabilities.
Still, it’s a market worth watching, and, as we say, we’re keeping an eye out, and monitoring the debate on what a New Zealand carbon credit is worth.
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