The New Zealand economy

As a forestry represented said, the government's emission trading scheme is doing nothing for forestry and nothing for climate change

Low carbon price 'deterring forest planting'

The Emissions Trading Scheme is supposed to help improve the environment by encouraging the planting of trees, which absorb carbon dioxide as they grow.

Radio New Zealand,

2 October, 2012

But carbon traders say they are being approached by people considering cutting down forests and replacing them with dairy farms.

They blame that on the low cost of emissions credits, down from $25 a tonne of carbon dioxide to about $3 dollars a tonne.

Nigel Brunel, who trades for OMF Financial, says a high carbon price is needed to incentive forestry over dairy farms.

The low cost of emisions credits stems in part from world economic woes depressing production levels and minimising demand for carbon offsets.

They also blame New Zealand for allowing cheap credits from Ukraine and elsewhere.

The Government's view is that is cheap credits from overseas reduce the cost of the Emisssions Trading Scheme during difficult economic times.

New Zealand’s GDP Growth Slowing in Second Half

New Zealand’s economic growth is slowing in the second half of 2012 amid weakness in manufacturing, exports and consumer spending, according to the Treasury Department.

 

Bloomberg,

30 Sepetember, 2012

There is a risk that growth in the three months through September may be less than the 0.6 percent expected, the Wellington-based department said in a report on its website. Gross domestic product expanded 0.6 percent in the second quarter following a 1 percent pace in the first three months.

“The outlook is not without its headwinds, with parts of the economy looking to have lost momentum over recent months,” the Treasury said in its monthly report, which doesn’t contain new forecasts.

Manufacturing and the services industries are slowing, adding to signs of a sluggish end to 2012, the Treasury said. Slow growth adds to the case for the central bank to keep the official cash rate at a record-low 2.5 percent until next year.

Nine of 16 economists surveyed last week by Bloomberg News expect no change in borrowing costs until the second half of 2013. Four see an increase in the first quarter and three predict a rise in the second quarter from the current rate.

Employment confidence rose in the third quarter and is still the second-lowest since the the 2008-09 recession, according to a survey today from Westpac Banking Corp. (WBC) Reports last month showed manufacturing contracted at a faster pace while the services industry was the weakest since October 2009.