2010-01-11 19:43:34 - The disappointing result from the Copenhagen climate summit has left a few uncertainties going forward.

According to energy consultancy Point Carbon’s 2008 estimates, the market for trading carbon emissions permits would reach 2 trillion euros or $2.9 trillion by 2020. The failed Copenhagen climate summit however has put paid to immediately creating a global trading market. It is hoped that national and even regional schemes will bridge this gap, but some large political decisions in the first half of this year will be crucial.

Currently, FinSoul research shows that compared to conventional energy markets, carbon trading is still tiny, with permits with a value of about $150 billion changing hands in 2009, generating revenues of $850 million for investment banks according to a Societe Generale analyst. The majority of these revenues came from hedging prices and

volume risks associated with projects to offset carbon emissions.

Even with the failure of the COP15 to find a replacement treaty for the Kyoto Protocol which is due to expire at the end of 2012 it is hoped that local markets could make up the shortfall. Barack Obama is soon set to address Congress on the State of the Union and it is hoped that some clarity will come for the American market which analysts believe could be worth as much as $1.3 billion by 2020. The U.S. Senate is currently working through a proposed climate bill which was narrowly passed by the House in mid 2009.With mid-term elections due in November the original deadline for a federal market of 2014 may still prove too ambitious.


Meanwhile in Australia, Prime Minister Kevin Rudd is expected to put a carbon bill to the senate for a 3rd time in the first quarter of the year and may seek an election if it is again rejected.

Japan, FinSoul understands, is also in the process of introducing a mandatory emissions target, under the leadership of recently elected Prime Minister Yukio Hatayama, but he is facing strong opposition from the country’s industrial sector.