Climate change policy is likely to be driven by regional responses before an international agreement is put in place, JPMorgan Chase & Co. said.
“Instead of the top-down Kyoto coming down, we’re going to see it come up,” Odin Knudsen, the managing director of environmental markets at the New York-based bank and a former head of the World Bank Carbon Fund, said at a conference in Melbourne today. “We’ll break down to regional, and at some point later on, we may see an international, legally binding agreement. In the interim, we’ll have something like the Copenhagen accord, which will be the political commitment.”
At the Copenhagen climate conference in December, delegates were planning to finish a two-year effort to replace the 1997 Kyoto Protocol, which limits emissions through 2012. Instead, they clashed over aid to developing countries, pollution- reduction goals and how to verify individual pledges. No binding treaty was adopted. The next round of international talks is scheduled to start at the end of November in Cancun, Mexico.
Australia in April shelved climate change laws until after 2012 amid lawmaker opposition and a lack of action by other countries. Prime Minister Julia Gillard has established a multiparty committee to study options for introducing a price on carbon. New Zealand started an emissions trading system in July.
“We really want to see Australia come into the game because we think there’s some interesting regional dynamics that can take place,” Nigel Brunel, head of futures and equities at Auckland-based OMFinancial Ltd., said at the conference.
Domino effect
A climate change accord with three to four countries should be the focus, rather than trying to get 140 countries to agree on a binding treaty, Aldersgate Group Chairman Peter Young said in an address yesterday.
The London-based company is a coalition of businesses, organizations and individuals including United Utilities Group Plc and the Renewable Energy Association.
“There are only four countries, or regions that matter in the developed world,” Guy Turner, director of carbon markets for Bloomberg New Energy Finance in London, said today. “Europe, U.S., Australia and Japan. If Australia follows after Europe, I guarantee that Japan will take it a lot more seriously and then you only have one domino left, and that’s the U.S.”
Australia’s multiparty climate change committee has all options on the table about pricing carbon, Gillard told the Queensland Media Club in Brisbane yesterday. The committee will meet until the end of 2011, and will then consider how much progress has been made before making policy proposals, she said.
The nation’s Greens party want a carbon price imposed quickly and won’t automatically back policy proposed by the Prime Minister, lawmaker Adam Bandt said at the conference.
Gillard needs to retain the support of Bandt and three independent lawmakers after wooing them to form a government after the country’s deadlocked August election.
