CO2 - Carbon Fund units

[tommy_d]

then the demand to buy CO2 offsets will just grow. And given the govt has stated they will limit supply (and then change their minds it seems ) but still, limit the supply. Doesn’t normal supply and demand mean that there is only one way this fund will go - up ? It has already increased by about 16% since I started investing in it 2 weeks ago. There has to be more to it than a one way gain? But, as I said, I am still trying to get my head around this one.

to be serious on this fund, you should learn the basics of how the emissions trading scheme operates. There are a couple of good sources. They should help you draw some conclusions.

This is a good starter: https://morganfoundation.org.nz/emis...s-for-dummies/

motu research have some good articles and video https://www.motu.nz/resources/about-emissions-trading/ , this one is ok i think: https://www.youtube.com/watch?v=xrUZIbKZzbI

[gbogo]

good summary. ETS “out of control”. https://keithwoodford.wordpress.com/...arbon-auction/

[GTM 3442]

Thanks tommy_d, and thanks gbogo, much appreciated.

I suppose we now have to keep an eye out for a bout of well-meaning and unforseen - yet strangely forseeable - unintended consequences.

[kiora]

good summary. ETS “out of control”. https://keithwoodford.wordpress.com/...arbon-auction/

"Minister Shaw must now be squirming at the way he has lost control of the ETS steering levers."
How will the govt move to control the levers now?

[gbogo]

https://twitter.com/norightturnnz/st...965591556?s=21 interesting critique of the 7m release at the recent auction and ETS generally

[Davexl]

Hi,
Anyone got the gist of WHO is complaining about the increased Carbon prices in this mornings NBR? Sorry no subscription ATM...TIA...

"Pundits seek change to ‘dysfunctional’ ETS after carbon prices soar"

But James Shaw argues the scheme is working better than ever.
Commentators say tweaks to the emission trading scheme are needed to prevent a repeat of the transfer of wealth seen at Wednesday’s sale of domestic carbon units where the government’s...

[GTM 3442]

US Public Radio podcast on the Australian water market. There may be a few parallels to the New Zealand ETS here?

https://www.npr.org/2021/08/31/10329...liquid-markets

[KJMLimited]

I think Shaw is correct. The price of emitting carbon is measured by the cost of the product you have to pay to offset your emissions. The market has set that price at well above $50/tonne. So what if people who bought those credits didn't do so with the intention to offset emissions in NZ? In Europe the price is much higher, sooner or later the markets will be linked, today's buyers will be able to sell true market value, which is why the futures price in NZ is so high. The message for emitters is therefore reduce emissions, or pay the real price for the credits, and stop relying on the government to supply credits at below true market cost.

[Newman]

Carbon Fund collects fees of 1-2% on the fund. The larger the fund becomes the more the managers earn. The fund will use new investors' money to continuously buy carbon units but would be reluctant to sell any. Thus, the demand for carbon units is artificially raised, pushing carbon price higher. This game could continue until one day if China or the USA discontinues their commitments to Paris Agreement.

[Maxtrade]

to be serious on this fund, you should learn the basics of how the emissions trading scheme operates. There are a couple of good sources. They should help you draw some conclusions.

This is a good starter: https://morganfoundation.org.nz/emis...s-for-dummies/

motu research have some good articles and video https://www.motu.nz/resources/about-emissions-trading/ , this one is ok i think: https://www.youtube.com/watch?v=xrUZIbKZzbI

The price has jumped up considerably since the auction. You seem to be quite knowledgeable on CO2. Where do you see a fair SP currently for this fund. $2 seems quite a leap from where it was recently sitting. Do you feel this rally will subside back to around 1.7- 1.8 again?