The price of carbon under the New Zealand Emissions Trading Scheme (ETS) hit a record $68 per unit at today's auction - the first to be held since the COP26 climate summit in Glasgow over October and November.
The units were highly sought, with bids totalling 9.21 million for the 4.75 million units on offer.
Today's auction price compares with $53.85 at the last auction in early September - also a record.
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Prices in the secondary market kicked on sharply higher after the last auction and pushed on again to $68.55 after today's sale.
The unit prices have gained by 172 per cent over the last two years.
The ETS establishes a trading market of New Zealand emission units (NZUs).
Businesses that carry out activities covered by the ETS are required to buy and surrender to the Government, one unit for every one tonne of carbon dioxide equivalent emissions they produce.
New Zealand's carbon market has mirrored price gains in other carbon markets around the world - particularly in Europe.
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Advertise with NZME.High New Zealand prices have encouraged tree planting - pinus radiata - for carbon sequestration, raising the ire of some in the rural community who say good pastoral land has been given up for trees because of the high returns available from carbon.
Today's auction follows the COP26 climate summit in Glasgow, which promised more climate aid to developing countries, brought forward the deadline to increase pledges to cut emissions, and paved the way for international carbon markets.
The Glasgow Climate Pact is the first climate deal to explicitly plan to reduce coal usage.
Post COP26, European carbon futures prices have hit €75 ($125) a tonne - more than double the price of a year ago.
New Zealand announced a revised pledge at the Glasgow conference ,with a headline figure of a 50 per cent reduction on gross 2005 emissions by the end of this decade.
"I think the market will go higher," Nigel Brunel, head of commodities at Jarden, said.
"I don't think it's going to come off that much."
Brunel, pointing to the large number of bids, said there was "not a lot of momentum" to sell this market down.
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Advertise with NZME."The Government has got a higher ambition as well, post COP26, so it's all feeding through into higher prices," Brunel said.
"It's onwards and upwards from here."
