KEY POINTS:
The arcane world of emissions trading crossed over to the familiar realm of Trade Me yesterday when Meridian Energy put three parcels of carbon credits up for sale on the on-line auction site.
Meridian chief executive Keith Turner said the move was intended to get people talking about
their carbon footprint and how to reduce it.
"And it's a test to determine the level of interest in small parcels of carbon credits and create an open process to discover how much people are prepared to pay for them."
Two parcels aimed at household buyers are of 20 units, sufficient to offset the emissions of 20 tonnes of carbon dioxide or the equivalent in other greenhouse gases. The third parcel, intended for a business buyer, is for 1000 tonnes.
The credits - verified emissions reductions or VERs in the jargon - arise from Meridian's wind farm at Te Apiti.
Their environmental credentials depend on who verifies and issues them, and on the credibility of the registry which ensures that once they are "retired" - that is, used to offset emissions - they stay retired, and that prior to that they only ever have one owner at a time.
Meridian has used a Swiss organisation, Gold Standard Foundation, endorsed by more than 40 NGOs including Greenpeace and WWF, to issue the credits. They were certified by the highly reputable Das Norske Veritas, an agency also used by the United Nations.
The registry service is provided by M-co, the company which operates the New Zealand electricity market.
This is a voluntary market, not to be confused with compliance or Kyoto markets where governments or companies that are required to hold credits to cover any emissions over their caps can buy them.
The voluntary market, by contrast, is intended for firms or individuals who want to offset their emissions for either ethical or branding reasons.
But buyers do not have to retire the units (and so cover their emissions). They can hold them to sell on in the future.
Trade Me's head of commercial, Mike O'Donnell, said the project arose from a vexatious attempt a few weeks ago to offer for auction some forestry-based credits that had not been certified or registered by anyone.
"So we took them down, but I said at the time theoretically there was nothing to stop people putting up verified and registered credits for auction." Meridian already had Gold Standard VERs ready for sale and M-co was able to quickly establish a registry. "It happened remarkably easily,' O'Donnell said.
The three offerings had each attracted more than 500 visits in the first three hours. "Normally an auction on Trade Me would get 500 visits over the space of a week." He denies being out to steal a march on NZX.
"We wish them all the best," he said. "But Trade Me tends to move more speedily than some of the more formal markets out there."
Joanna Silver, who heads NZX's carbon trading project, welcomed the opportunity for retail buyers to "dabble" in trading. "But ultimately, as with finance companies, the larger the risk the larger the need to protect investors and therefore larger markets need regulatory checks and balances in place."
Turner said the use of Trade Me was not a signal Meridian was not interested in using the NZX platform. "We are very enthusiastic about the NZX platform but it's just not up and running yet."
