Spot NZUs gained another 5.1% in Wednesday trade, closing at NZ$13.50 ($9.37) as buyers showed no signs of letting up amid expectations of impending government changes to the ETS.
The contract opened at NZ$12.95 on CommTrade, 10 cents above the previous day’s close, and kept climbing throughout the day, with a total 250,000 allowances changing hands.
NZUs have increased 21% since the beginning of this month and 73% since the government announced the ETS review last November.
“This is going to NZ$15 before stopping,” one observer told Carbon Pulse.
With expectations high that the government will abandon the 2-for-1 rule, emitters are buying as much as they can at these levels, assuming the price will continue to rise.
The government has not made any indications of when it will announce the outcome of the ETS review process.
Climate Change Minister Paula Bennett on Wednesday confirmed she would be travelling to New York next week to sign the Paris Agreement at a ceremony on Apr. 22.
After the agreement has been ratified, New Zealand will start the job of shifting to a low-carbon economy, Bennett told the New Zealand Herald.
“Quite frankly, there’s some easy ways to do that, and there’s some harder ways. And I want to go down the harder path to start with.”
New Zealand will set up a taskforce, consisting of members from business, NGOs, academia and farmers, to hammer out a strategy for the country to meet its target of cutting GHG emissions 11% below 1990 levels by 2020.
But Bennett and other ministers have previously said they want to strengthen the emissions trading scheme to make it a more effective tool to drive carbon reductions.
By Stian Reklev – firstname.lastname@example.org