CARBON CROPS FOR PRIMARY PRODUCERS

NOV 2009

AN environmental investment specialist says Australia needs to get its act together on emissions trading, but could also find opportunities in biomass exports to Europe.

Speaking at the Carbon Market Expo Australasia, Macquarie Bank’s John Marlow says European utilities were looking at ways to reduce emissions by buying renewable energy sources.

“It isn’t good for those guys who are selling coal, but it is for those who are growing something,” said the bank’s global head for environmental financial products.

He put it bluntly that Australia has little influence in world carbon markets and that we lag behind when it comes to reducing emissions through the Kyoto Protocol’s Clean Development Mechanism (CDM)

“The level of participation isn’t significant in a global context – Australia will always be a price taker, not a price maker.

“The reason Europe was able to pick it (CDM) up very quickly is they didn’t have the political vacillations of Australia with polarised views.

“Does Australia have the architecture to become a hub? Yes, but no more than anywhere else – but I suspect either Hong Kong or Beijing will be the regional hub.”

He says local carbon trading companies have great opportunities in China too, with straightforward business practices, provided they build good relationships.

“Chinese business is overwhelmingly about relationships – you build the business relationship first and do the business activities thereafter. For Australian companies going in blind into China, the cultural differences can be significant, but once you have a good Chinese partner then you have them for life.”

He also pointed out that when it comes to carbon trading, the states are too preoccupied with what each other are doing rather than focusing on the bigger picture.

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