A NEW taskforce is being assembled to guarantee Sydney’s future as a hub of carbon trading in the region.
New South Wales Minister for Climate Change and Environment Carmel Tebbutt appointed Baker & McKenzie partner Martijn Wilder to chair the Sydney Carbon Market Taskforce (SCMT) on 22 October.
Wilder is head of Baker & McKenzie’s global climate change and emissions trading practice, and chairs the Premier’s advisory panel on climate change. Primarily, Wilder explained, the taskforce will examine ways of building opportunities for Sydney to become a carbon trading hub similar to the role of London in Europe and New York in America.
“The general view is there’s an opportunity within this region for Sydney to do the same and if we look at, you’ve got … in effect New York being a hub for North America. You’ve got London being a hub for Europe and there’s an opportunity to make Sydney a hub for the Asia Pacific,” he said.
“Because we’ll be one of the larger economies with emissions trading schemes in this region, it’s really only going to be us, Japan or New Zealand.”
The plan relies on capital continuing to flow into the carbon market despite the credit crunch and global economic downturn. Perversely, the collapse of some of the world’s largest banking institutions has created more work for Bakers in the climate change space.
“We did a lot of work for Lehman, who have now gone, but we’ve been doing work for a lot of other entities that are saying that they’re really busy and there’s a lot of opportunities out there … [since] there’s a lot less competition now.”
Wilder, who has been in America for the past two weeks, said businesses will continue to engage in the carbon market but not to the same extent as was previously the case.
“Nobody knows what the real impact of the financial crisis will be. My feeling is … that people will continue to develop these schemes, but they may not come in as aggressively to begin with,” he said.
“I think the fact is that governments are committed to address the issue [of climate change] and it’s not going to go away. So they’ve just got to be more careful now about how they design it [the carbon trading scheme].”
The government strategy will need to accommodate big players such as the Australian Stock Exchange (ASX) if it is to succeed, Wilder said. At a federal level, he advocated following the example of countries such as Switzerland, the Netherlands and the UK, who have opened their carbon trading markets to overseas buyers.
“Part of the strategy has to be to create a marketplace in which we attract a lot of the players in the carbon market,” he said.
However, Wilder stressed that it was impossible to predict with any certainty the outcome of the financial crisis, and the subsequent fall-out for climate change initiatives.
“The reality is, on the one hand you’ve got people saying we’ve got to slow down and now we can’t go much faster. On the other hand you’ve got [the economist] Nick Stern, who said yesterday that the climate crisis is far worse than the financial crisis.”