Last week Prime Minister John Howard said he would create a joint government-business working group on carbon emissions, although this would not result in harm being done to the country’s natural resource industries. Yet NSW has had a compulsory trading scheme in place since 1 January 2003, having begun on a voluntary basis — and other states are set to follow soon.

Indeed the question of whether emissions trading will be conducted on a national platform is only a matter of time, according to Martijn Wilder, head of Baker & McKenzie’s global climate change practice and chair of the NSW Premier’s working group on the greenhouse advisory panel.

“Everyone we speak to knows it’s inevitable — it’s a question of what is going to come, and when,” he said. “And that uncertainty by the government not doing anything is creating a lot of difficulty at the moment.

“The state governments have all proposed their version of a national trading scheme, so I think it’s fair to say that emissions trading is one part of the legal tools we have available to reduce Australian emissions,” Wilder said.

In fact, according to Wilder, emissions trading “is already accepted byeverybody in Australia but the Federal Government, that is now looking at whether or not it is an option”.

Since Bakers’ climate change practice began a decade ago, the firm has developed a strong client base, and Wilder is fielding questions from major companies on a steadily increasing basis.

“We’re now in the position where … we are seeing a whole lot of Australian big corporates coming in and asking questions, some for the first time,” he said, which includes “a lot of household Australian names — a lot of large mining and energy companies”.

Another developing trend is the export of Australian legal talent to Europe and the US.

“I think Australians generally across the board have been leaders in greenhouse, and a result of that has been that a lot of Australians have actually left and gone overseas, Wilder said. “There a lot of Australians working in key organisations now in this market.”

Holding Redlich partner Ralph Noldan, who advises on energy and resources, agreed that the market is already building momentum in Australian states, “regardless of what the Federal Government’s view is on the subject right now”.

“The fact is under the NSW emissions trading scheme, and the Victorian Renewable Energy Target (VRET) scheme, you really have a form of emissions trading in a sense,” Noldan said.

“So you’ve got a lot of companies having to deal with it right now, although it really is primarily focused on our electricity retailers and major users at the moment.”

The Howard Government’s reluctance to decide on the issue is making some aspects of law, such as contracting, difficult.

“The problem is that in a lot of transactions you work on, people are aware that there may be some sort of legislation in the future — where they may or may not get a benefit from certain renewable type activities,” Noldan said.

“You’re trying to draft contracts to capture that sort of benefit, but the reality is that nobody really knows exactly what the law of the land is going to be in the future, so it makes drafting for that sort of thing very hard.”