[20 August/Farmers Weekly]

Forest Owners Association President, Peter Weir, was troubled by Government proposals to use an auction system as a means of allocating extra carbon units under a revised Emissions Trading Scheme. Under the auction, each bidder would be able to submit multiple bids to create a demand curve that ranks all bids from highest to lowest. A clearing price would be determined. Mr Weir feared this may cause problems. He was concerned the units would not be backed by anything and compared it to quantitative easing. He also said it was unclear as to when the auction would be initiated. He added the carbon market already faced a liquidity crisis. Foresters as a whole were happy with most of the changes proposed. Interest from sheep and beef farmers in forestry was on the rise and any ability for carbon credits to rise over their $25 cap would be further encouragement.