Political leaders signed a watered-down agreement this weekend with no future roadmap to international emissions trading. However, President Barack Obama is likely to use the US's commitment to lowering its emissions as a way of forcing his cap-and-trade bill through the Senate in the spring. Richard Gledhill, head of climate change at the accountancy firm, said the US acceptance of the Copenhagen Accord would "accelerate huge growth in the global carbon market", possibly tripling its size over the next decade. Trading in carbon markets has grown to £75bn since the EU Emissions Trading System was launched in 2005 and London has emerged as the leading centre for trading and investing in carbon. "The big question now for the City is whether London will lose its leadership in carbon markets to the US," Mr Gledhill said. "Banks, brokers and investors have been gearing up in New York and Chicago since the new administration took over. President Obama gave a clear message in his speech to the Conference in Copenhagen – America is going to take action on climate now. Lose this battle and we risk a financial sector brain drain from the carbon markets in London." The US could also be a more attractive place to trade carbon offsets, since trading is limited under the EU system. Under the current system, low-carbon projects in the developing world are given credits which they can sell to companies that need to emit more carbon dioxide. Business groups, including the Institutional Investors Group on Climate Change, reacted with disappointment that only the US has signalled its intention to penalise heavy emitters through a trading system.Copenhagen climate deal: London faces carbon trading challenge from New York
The Copenhagen agreement on climate change will pave the way for New York and Chicago to overtake London as the global centre of carbon trading, according to PricewaterhouseCoopers.
Monday, 21 December 2009
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