Greenhouse gas emissions need to be cut beyond 30 per cent if Copenhagen agreement is reached
October 2009
European Union aims to lower greenhouse gas emissions by 20 per cent beyond 1990 levels by 2020, and by up to 30 per cent if agreement is reached in Copenhagen later this year, according to a report by research and analysis group Frost & Sullivan.
The report suggests that the outcome of the December 2009 Copenhagen Climate Conference will dictate the success of the global carbon market.
Frost & Sullivan research analyst Kavitha Chakravarthy, said, ‘International agreements on climate change after 2012 will propel the global carbon market to the next stage of development.
‘The emissions trading market in the United States will likely be three times larger than the EU market, thereby encouraging greater participation from financial institutions and increasing its depth and breadth,’ Chakravarthy added.
According to Frost & Sullivan, the European emissions trading market will grow because trade volumes are looking up regardless of the fact that carbon European Union allowance (EUA) prices have shrunk.
Chakravarthy said, ‘A move toward a low carbon economy creates various investment opportunities in various sectors while boosting the liquidity of the emissions trading market. In these conditions, spot trading volumes are expected to increase, as participants focus on avoiding counterparty risk and on cashing in surplus EUAs.’
Project credits such as certified emissions reduction and emissions reduction units hinge on whether a deal is reached in Copenhagen, according to the report. Countries such as Australia, Norway, New Zealand, and Japan have launched or are expected to launch cap and trade systems.
