15 Aug 2012

Regional carbon market idea fails to take hold

10:54 am on 15 August 2012

New Zealand's championing of a market in carbon credits covering the Asia-Pacific region has been knocked back in regional trade talks.

It is the second time the Government has pushed for a regional market in carbon credits.

At the latest round of the nine-country TransPacific Partnership talks, New Zealand tried to revive a proposal first put to the United Nations last year.

The proposal would link future carbon markets in Australia, Chile, Mexico and India under a common set of rules.

Reports in the international trade press suggest the idea was knocked back by the United States.

Trade Minister Tim Groser says New Zealand has not given up on the idea although he says negotiators probably won't push it any further in the TransPacific Partnership trade talks.

Business New Zealand says linking with carbon markets overseas would help prop up demand for locally produced carbon credits, which have fallen to record low prices.

But environmental lobby group Sustainability Council says the proposal risks undermining globally agreed standards and boosting trade in credits that don't actually reduce carbon emissions.