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THAILAND: May 28, 2007
BANGKOK - Asia, with its fast-growing economies and major greenhouse gas emitters, could see its own carbon trade exchange open in a few years, a senior official of Dutch bank ABN AMRO said on Friday.
"I think an exchange will certainly emerge in Asia, and possibly more than one," Richard Burrett, the bank's managing director for sustainable development, told Reuters in an interview.
There was "huge potential" for Asia to drive growth in the US$30 billion global carbon market, which puts a price on carbon and is seen as a possible weapon against climate change, he said.
"Most people believe China will account for 40-50 percent of that flow going forward," Burrett said.
"If you look at the expected growth of emissions in Asia, and the potential to reduce emissions, it's huge relative to Western Europe," he said.
The European Union is the hub of the global market, with its emissions trading scheme accounting for US$24 billion in turnover last year.
Carbon markets can operate when each country has a fixed quota of emissions permits. If they exceed them, they have to buy permits from countries below quota.
China has balked at any curbs on its rising carbon emissions which could slow its economic growth, but Burrett said he expected Beijing to come around.
"In my view, that's posturing. Clearly they will join a scheme that has a different flight path in terms of emission reductions from Western Europe and the United States."
"I think they see the commercial reality of it," he said.
INTERESTED IN RENEWABLES
The Dutch bank, which launched a 150 million-euro private equity fund last year to invest in renewable energy technologies, was "scouring the Asian market for opportunities", he said.
The bank was particularly interested in wind and solar projects, while biofuels were less attractive, he said.
Some experts view biofuels as carbon neutral given the environmental impact of converting degraded lands into growing the crops used to make them, Burrett said.
The bank's private equity renewables fund had been slow to develop, mainly due to uncertainty about what would follow the Kyoto agreement to fight global warming whose first period expires in 2012, he said.
"We get the sense that the institutional market has stepped back and it's waiting for clear policy signals. I think those signals will come," he said, noting that the European Union has committed to cut carbon emissions by 20 percent by 2020.
In the United States, where the Bush administration has opposed Kyoto, he was optimistic Washington may agree to some carbon targets after the 2008 presidential election.
"People see the writing on the wall, but the likelihood of anything happening under the current government is slight," he said.
Story by Darren Schuettler
REUTERS NEWS SERVICE
