More trouble for the carbon credit scheme that Labour wants to use to fund climate initiatives.

The Government has tried - and failed - a third time to auction off credits, giving businesses the right to emit carbon dioxide.

This means Treasury is now short over $900 million ahead of Tuesday's Pre-election Economic and Fiscal Update.

The Country's Jamie Mackay says the credits will be available to purchase again- but economists warn the units could be harder to sell a fourth time.

LISTEN ABOVE

• Govt. carbon credit auction fails a third time
• Government short of nearly a billion dollars