The New Zealand carbon price has broken through the $20 a tonne mark, as it continues its push higher on speculation the new government will lift a cap on the maximum price emitters pay.
The price for a New Zealand carbon unit under the Emissions Trading Scheme last traded at $20.25 per tonne on OMF's CommTrade platform, having jumped higher after Green Party leader and climate change minister James Shaw told industry publication Carbon News last week that he believes carbon prices need to be higher than the current cap of $25 per tonne.
"There is virtually zero momentum in this market for a downside move," Nigel Brunel, financial markets director at OMF in Auckland, said in a note yesterday.
"Carbon is on the move; we believe this market will be nearer $22 come February/March. The current government/Greens have clearly signalled higher ambition and a desire to see carbon prices above $25."
New Zealand is reviewing its emissions trading scheme, which currently includes a $25 per tonne cap on the price emitters have to pay the government for liable emissions.