Huge investments in green technology in Asia and steps toward domestic emissions trading are opening up the prospect of regional carbon trading, climate change experts in Asia have said. Many Asian nations are not waiting for agreement on a broader U.N. climate pact and see good investment opportunities to move ahead now to boost energy security and job growth. Countries such as China, Japan, Korea and Australia were likely to press ahead with their own schemes to curb greenhouse gases, Anthony Hobley, global head of climate change at law firm Norton Rose, said at a carbon conference in Melbourne. "What's happening is things are growing more organically � it's a bottom-up approach and that's how international currencies trade evolved, that's how international trade in oil evolved and I think that will happen with carbon," he said. "There won't be this global unified top-down carbon market but what will happen is bottom-up development made possible by Kyoto Protocol and international agreements which unleashed design principles for monitoring and setting up markets." The Kyoto Protocol is the UN's main weapon in the fight against climate change and includes a scheme that rewards investors in clean energy projects in poorer nations. Investors earn tradable carbon offsets in a scheme worth $20.6 billion. But UN climate talks have got bogged down on whether to extend Kyoto into a new phase from 2013 or to craft a new treaty. The United Nations says it doesn't expect nations to agree on a new legally binding treaty during major climate talks in Cancun, Mexico, in less than two months. Agreement might come a year later during talks scheduled for the end of 2011. "It could be in the future that there will be treaties that link China's domestic market with global markets, that, if not global, may be bilateral or regional market models," Hu Tao, a member of China's Carbon Forum Advisory Board, said. Japan is already looking at bilateral offset deals to help the government meet its pledged emissions cut of 25% below 1990 levels by 2020, fearing the UN talks could falter. What the regional carbon currency would be remains unclear but could be based on Kyoto offsets called certified emission reductions that are widely traded. STIMULUS PLANS China's next five-year plan from 2011 to 2015 is expected to include a commitment to market-based emissions trading. South Korea is finalising plans for carbon trading, while Japan hopes to launch a scheme by 2013 or 2014 if the Government's climate bill passes parliament. India aims to launch renewable energy and energy efficiency trading schemes, while an Australian government panel is weighing whether to recommend a carbon price or a limited emissions trading scheme with an initial fixed price for pollution permits. New Zealand already has the world's only national emissions trading scheme outside the European Union. These steps have been buoyed by huge domestic stimulus plans, including China's $736 billion clean energy investment pledge to 2020, India's 20 gigawatt solar initiative by 2022 that is expected to draw $70 billion in investment as well as steps by South Korea and Japan. South Korea's presidential task force said the country would spend 40 trillion won ($35.4 billion) by 2015 in a combined push by public and private sectors to boost its renewable energy. "Already, there's Australian emitters buying New Zealand carbon, the Japanese have been buying New Zealand carbon as they have difficult abatement issues over there," said Nigel Brunel, a Wellington-based carbon trader with OMF Financial. "So if we don't get an international agreement, there is still a lot of momentum in different countries," he added.


Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.