Sharemarket operator New Zealand Exchange and a number of leading businesses have confirmed they will establish a New Zealand-based carbon market to service the Asia-Pacific region.
NZX, with companies such as Air New Zealand, Meridian Energy, Contact and 42 Below, as well as representatives of investment banks GoldmanSachs and ABN Amro, have been examining the feasibility of such a market since December.
Yesterday NZX confirmed that 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 mem-ber and Pricewaterhouse-Coopers partner Julia Hoare said the market would not be dependent on the Government introducing a carbon pricing mechanism.
She said there was already a fast-growing international trade in voluntary emission rights and to a lesser extent existing Kyoto-based tradeable instruments.
"But clearly the market would be larger if Government policy did end up going 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 chief executive Mark Weldon.
Weldon believed New Zealand 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 classed as a future, a spot product or a security.
Prime Minister 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 regulatory changes might be needed to put them into effect".
Weldon saw no problem finding companies willing to back the market financially.
Time Zone 1
* NZX and several leading companies and investment banks are to establish a New Zealand carbon trading market.
* The group believes it can develop the leading emissions trading market in the Asia-Pacific region.
* The market is to be called TZ1 and is expected to commence operations next year.
