emmissions trading scheme, page-2

Goatpointer

ETS is not going to be that bad for CEY. Reason is that

1. CEY itself is directing increasing product for export, not local sales. Export demand won't be impacted by ETS

2. In terms of the carbon liability imposed on CEY itself, I believe its only on the fugitive emission from mining the coal, not on the emissions stored in the coal itself that CEY sells (the carbon stored in the coal would be much greater than what is emitted during mining)

3. New compensation measures announced this week mean that coal companies will get extra compensation.

Having said all that, in terms of domestic sales, yes the ETS is going to reduce domestic demand once the carbon price signal kicks in. Which is why CEY's strategy of increasing exports is good - but as I mentioned in the email below, the strong Aussie $ is hurting. I hope they have hedged against it!

I think in NZ half the prob was that they counted scrub as forest when working out the impact on the country when they signed up to Kyoto. Ie, they thought there was so much forest in NZ that the country would make squillions out of it. But on a post Kyoto audit of what forest there was which was counted as offsets, they realised the problem - scrub was miscalculated as forest! I might be way off the mark on this but its what I've heard in terms of the history there?

DYOR, V5