Carbon market looks past G8 to U.S. election
TOYAKO, Japan (Reuters) - Carbon market traders and backers of clean-energy projects aren't holding their breath for a strong statement on fighting change during this week's G8 summit and are more focused on who wins November's U.S. election.
Market players say they don't expect any breakthrough agreements on fixed emissions reductions targets at the talks at a secluded Japanese resort on the island of Hokkaido.
But some are hoping for the leaders to strongly support renewable energy as a way to fight rising greenhouse gas emissions that are blamed for global warming.
"In general, nobody's expecting a lot from this G8. They'd like to see something positive on carbon and greenhouse gas emissions come out of it but I don't there's too much expectation right now," said Anthony Sneed, director of operations for Asia Carbon Exchange, a trading platform for emissions trading.
The G8 leaders agreed last year in Germany to "seriously consider" halving greenhouse gas emissions by 2050 but there are doubts U.S. President George W. Bush will agree to a mid-century target unless developing nations back emissions curbs as well.
Leaders from several of the world's biggest emerging markets, including China and India, will meet G8 members in Japan on Wednesday to discuss climate change.
"I am not expecting a lot this early in the process ahead of the December 2009 Copenhagen meeting where they are supposed to have a final agreement for post-2012," Sneed told Reuters.
World nations are trying to agree on a replacement for the U.N.'s Kyoto Protocol that will bind all nations to emissions curbs. Kyoto's current phase, which ends in 2012, binds only 37 rich countries to curbs and excludes big developing states.
"The U.S. will play a big part in this and right now it appears the U.S. will have to wait till after the elections to make some kind of meaningful input to these negotiations because we have a lame-duck presidency," Sneed said.
"BUSINESS AS USUAL"
The head of the U.N. Climate Change Secretariat, Yvo de Boer, said fixation on a far-away, vague 2050 target was unhelpful.
"It doesn't make explicit who will be doing what to achieve that minus 50 and ... it doesn't tell you what the baseline for that minus 50 is," he told Reuters on Friday.
"What the carbon market needs is where are we going to be in 2020, what is going to be next round of commitments, because that specifies supply and demand."
Prices for carbon emissions issued under the Kyoto Protocol's rules are rising, in part reflecting soaring oil and gas costs.
"I think it's business as usual," said Sudhir Bhat, director of project finance at Swiss firm First Climate, which trades emissions and develops clean energy projects. Continued...
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