KEY POINTS:
Carbon broker NZ Carbon Exchange has teamed with international brokerage CantorCO2e to make it easier for New Zealand firms to gain access to the international carbon market.
At this stage, it is aiming mainly to cater to the voluntary market for offsets - companies or Government agencies that want to offset their carbon emissions by buying appropriately validated tradeable units from projects that reduce emissions of greenhouse gases or remove them from the atmosphere.
But they can also bundle and sell the relatively small parcels of allowances that the Government offered in two tender rounds of the projects to reduce emissions scheme or that will be available under the permanent forest sinks initiative.
NZCX's directors are Karen Price, an environmental lawyer with a longstanding involvement in climate change issues, Murray Dyer, who has a background in financial and commodity markets, and Stuart Frazer, a chemical engineer who led the NZ Refining Company's side of the first negotiated greenhouse agreement with the Government.
CantorCO2e, with main offices in London and San Francisco, is an offshoot of financial services giant Cantor Fitzgerald.
Dyer said some multinationals were doing "social responsibility" reporting as well as the conventional financial kind, and buying carbon offsets was part of that.
It was also a risk management strategy for exporters wanting to counter any potential issues if the concept of carbon miles gets traction.
Price said firms providing services to Government departments that were going carbon-neutral needed to be thinking about their own carbon footprints.
And some of the banking and big accounting firms were starting to promote themselves as sustainable.
"It does make good business sense to get in there early and sort yourselves out rather than get caught up in it later when you aren't ready," she said.
Despite its name NZCX is a brokerage rather than an exchange and is not connected to NZX plans for a carbon trading platform.
"We don't see an exchange in this [New Zealand] market in the short term," Price said. "It's something for the medium term."
Dyer said exchanges were fine for standardised instruments that could be traded on price alone.
But at its present stage of evolution, emissions trading was better suited to brokered deals.
"It's very much about the underlying terms of the project - the period in which the allowance is sold, whether it is sold forward, who is taking the project risk, whether it is guaranteed-delivery."
Such variations made it difficult for third parties to interpret what price information was in the public domain.
One of the advantages of CantorCO2e is that it has people in countries where clean development mechanism projects are being done.
The clean development mechanism is a Kyoto Protocol measure under which projects in developing countries that meet criteria can gain units which Kyoto countries can use to cover their excess emissions.
