Financial Contracts and the Management of Carbon Emissions in Small Scale Plantation Forests
Under the New Zealand Emissions Trading Scheme, foresters can obtain carbon units as their forests sequester carbon. If they sell these units as they are earned, the units must be repurchased when the forest is harvested, exposing foresters to price risk. This paper examines the way forward markets, futures markets, and carbon lending markets could be used to manage this risk. It argues that carbon lending markets are likely to be the most convenient form for foresters, as they allow the total returns from forestry investments to be increased with minimal risk. The carbon units can be lent to industrial firms or developers of new forests to minimise the carbon risk they face if they make carbon reducing investments.
|Date of creation:||May 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.motu.org.nz
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Leiby & Jonathan Rubin, 2001. "Intertemporal Permit Trading for the Control of Greenhouse Gas Emissions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 19(3), pages 229-256, July.
- Kling, Catherine L. & Rubin, Jonathan, 1997.
"Bankable Permits for the Control of Environmental Pollution,"
Staff General Research Papers
1479, Iowa State University, Department of Economics.
- Kling, Catherine & Rubin, Jonathan, 1997. "Bankable permits for the control of environmental pollution," Journal of Public Economics, Elsevier, vol. 64(1), pages 101-115, April.
- Rubin, Jonathan D., 1996. "A Model of Intertemporal Emission Trading, Banking, and Borrowing," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 269-286, November.
- Kenneth M. Chomitz & Franck Lecocq, 2004.
"Temporary sequestration credits: an instrument for carbon bears,"
Taylor & Francis Journals, vol. 4(1), pages 65-74, March.
- Kenneth M. Chomitz & Franck Lecocq, 2003. "Temporary sequestration credits : an instrument for carbon bears," Policy Research Working Paper Series 3181, The World Bank.
- repec:cup:cbooks:9780521389341 is not listed on IDEAS
- Eric Karpas & Suzi Kerr, 2011. "Preliminary Evidence on Responses to the New Zealand Forestry Emissions Trading Scheme," Working Papers 11_09, Motu Economic and Public Policy Research.
When requesting a correction, please mention this item's handle: RePEc:mtu:wpaper:11_04. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maxine Watene)
If references are entirely missing, you can add them using this form.