An International Analysis of Emissions Trading Markets: Implications for Business Strategy

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An International Analysis of Emissions Trading
Markets Implications for Business Strategy

• Sara Peary
• Master of International Business Programme
• University of Auckland
• Business School
• sarapeary_at_hotmail.com

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Research at the European Parliament

• NCRE placement February-May 2005
• Office of UK Conservative Member of Parliament,
  Neil Parish
• Chair of the Australia-New Zealand Delegation
• Committee on Agriculture
• and Rural Development

• Committee on Environment, Public Health and
  Consumer policy
• Vice President of the Animal Welfare
• Inter-group
• Deputy Chief WHIP, UK Conservatives
• Conservative Party Spokesman on Agriculture and
  Fisheries
• Committee on Fisheries

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Research and Involvement

• Attendance and reporting of Committee Sessions,
  Internal Meetings and Parliament Events
• Observation and Recommendation
• Interviewing
• Networking
• Research and Data Gathering

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Research and Involvement

• Committee on Industry, Research and Energy
• Committee on Foreign Affairs
• Committee on International Trade
• Conference on Trade and the Environment
• United States of America Delegation

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Research and Involvement Committee on Industry,
Research and Energy

• European Union Emissions Trading Scheme (ETS)
  (01/05)
• Largest multi-country, multi-sector Greenhouse
  Gas emission trading scheme world-wide
• Formation of the international market for
  managing the risks of global climate change

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Research and Involvement Committee on Industry,
Research and Energy

• Various new businesses emerging in Europe as a
  result of the EU ETS
• EU carbon market carbon traders, carbon finance
  specialists, carbon management specialists,
  carbon auditors and verifiers
• New financial products i.e. carbon funds

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"that which is common to the greatest number has
the least care bestowed upon it. Every one thinks
chiefly of his own, hardly at all of the common
interest and only when he is himself concerned
as an individual. For besides other
considerations, everyone is more inclined to
neglect the duty which he expects another to
fulfil" Aristotle (Politics, 1262a30-37)
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The Problem of Climate Change

• Rising temperatures, extreme weather events,
  altered rainfall
• Jeopardising, industries, infrastructures,
  health, bio security and the broader
  international economy
• Firms can be significantly effected through
  costly legislation

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International Responses to Climate Change

• UNFCCC 1992
• First non-binding obligation of developed
  countries to stabilise GHG emissions at 1990
  levels by the year 2000
• Kyoto Protocol - 1997
• 2/2005 went into force in 141 countries worldwide

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Kyoto Protocol

• Set the framework for emission reduction programs
• Established new policy instruments or flexible
  mechanisms intended to encourage economic
  efficiency in emission reduction
• National legislation or programmes facilitate
  domestic compliance

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Emissions Trading Under Kyoto

• Among Developed Countries
• based on national allocations
• Between Developed and developing countries
• Based on project investment
• Private Sector Firms may participate if their
  domestic government allows

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Emissions Trading Globally

• Schemes are still in their infancy
• Extreme diversity in International policy and
  regional implementation of Kyoto
• Uncertianity of Emissions Trading in non-Kyoto
  Countries
• Need for relevant policy, programme and corporate
  strategy research

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An International Analysis of Emissions Trading
Markets Implications for Business Strategy

• To contribute new strategic insights for firms,
  policy makers and NGOs from an international
  comparative study of the EU, US, Australian, and
  New Zealand Emission Trading Markets

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An International Analysis of Emissions Trading
Markets Implications for Business Strategy

• To investigate the link between emissions trading
  legislation and firm-level strategy and
  operations, and to assess implications for firms

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Investigating

• Roles and positions of current policy making
  institutions, NGOs, and private sector firms in
  regard to Emissions Trading Markets in the EU,
  US, Australia and New Zealand
• Nature and relevance of stakeholder interactions
  of emissions trading markets and what influence
  do these groups have on each other?

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Investigating

• Strategic and operational preparations and/or
  changes are firms making in response to being
  stakeholders in an international emissions
  trading environment?
• Whether firms in Kyoto party environments making
  more strategic changes than those in non-Kyoto
  regions?

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Emissions Trading Markets Sampling Framework
 
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Conclusions

• What are the implications for Policy Makers, NGOs
  and Firms?
• What can be learned from early emissions trading
  schemes (EU-ETS, UK-ETS)?
• Is there a gap between policy-makers
  expectations and firm level strategic
  implementations?
• Are there firm level strategic differences
  between voluntary and legislated regions?
• What can NZ firms learn from business strategies
  in the EU and other regions?

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An International Analysis of Emissions Trading
Markets Implications for Business Strategy

• For more information contact
• Sara Peary
• Masters of International Business
• University of Auckland
• Business School
• sarapeary_at_hotmail.com027 460 8875