The Copenhagen Accord is the manifestation of domestic, political and economic realities in Washington and Beijing. It disappointed many observers of the negotiations, having failed to deliver little more than a statement of intent and no specific emission reduction targets. The implications for the energy utilities industry and for investment in clean technology are nevertheless significant.
*An overview of the Copenhagen Accord, its comparative successes and the key structural challenges it fails to address.
*A review of the latest US climate bill, US support schemes for renewable energy and efficiency and the outlook for US RGGI & CCX carbon markets.
*Projections of EU carbon prices and the possibility of uncertainty over post-2012 CER trading rules leading to a two tier carbon offset market.
*Reasons why trends towards renewable energies and energy efficiency will remain unbroken in 2010 and our 'top 10' clean energy predictions for 2010.
In Europe, the Copenhagen talks will have knock on effects on carbon markets and levels on investment, mainly in the near-term. The absence of any language on CDM reform and the lack of specificity concerning carbon finance mechanisms are causing jitters in the offset market and are undermining demand for post-2012 CERs and new project development.
Copenhagen gave the energy cleantech community the sense, if not the tools, that private investment will drive the transition to a low carbon economy. Levels of low-carbon investment and deployment will grow in 2010. Alternatives to cap and trade will emerge in the form of sub-national mandates and incentives for 'clean' energy.
Life will not be breathed into the Copenhagen Accord at COP16: Mexico City will deliver more stalemate.
Progress on new global and US climate regimes will be slow and unconvincing. The 'global' carbon market will fail to materialize in 2010, as will outright carbon border taxes and an EU-wide carbon tax.
Reasons to Purchase
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*Review how and where your company interacts with low-carbon or renewable energy markets, based on longer-term trends and developments.
Table of Contents :
DATAMONITOR VIEW 1
The implications of the failed Copenhagen Accord are significant for energy utilities the world over 3
The Climate Change Conference in Copenhagen failed to deliver the meaningful negotiated outcome the world was hoping for 3
While a new, credible and binding climate change framework was never really up for grabs, some semblance of a deal has emerged 3
The Copenhagen Accord took a small, albeit voluntary and provisional, step forward on international climate policy 4
The Copenhagen Accord left too many key structural challenges unresolved 5
While the accord made no explicit mention of energy, the implications for the energy sector are wide ranging 6
US levels of low-carbon investment and deployment will rise, despite Copenhagen's failure to excite the carbon and renewable energy investment community 7
Something for everyone: Kerry-Graham-Lieberman is the primary vehicle for US federal climate policy, no thanks to Copenhagen 7
The latest Senate climate bill places new emphasis on national security as a rationale for cap-and-trade 8
'Lesser of two evils': the recent EPA endangerment finding makes a strong case for the prompt passing of a US climate bill 9
US carbon markets will remain deflated until the economy or the odds of a federal cap-and-trade program being passed pick up 10
Much like their RGA counterpart, 2010 CFI contracts will remain deflated and are unlikely to drive utility innovation in clean energy 11
Alternatives to cap-and-trade will emerge in the form of sub-national mandates and incentives for low-carbon energy 12
In the absence of a carbon market, utilities can still benefit from a wide range of sub-national support schemes 13
Kerry-Graham-Lieberman does present significant opportunities for utilities operating across the energy value chain in the US 15
In Europe, the Copenhagen talks will have knock-on effects on carbon markets and levels of investment, mainly in the immediate term 16
Sentiment bounce: failed Copenhagen talks have affected EU carbon prices, but fundamentals will quickly regain the upper hand 16
China and India were the largest markets for CDM projects in 2010 17
Failed Copenhagen talks coupled with the pre-existing limitations of the CDM are causing jitters in the market for carbon offsets 18
The lack of regulatory certainty post-2012 will constrain CDM financing to the severe detriment of new offset projects post-2010 19
Without a successor to Kyoto, CER could become a two-tier commodity market made up of pre- and post-2013 CDM projects 20
Copenhagen has given the energy cleantech community the sense that cleantech investors will drive the transition towards a low carbon economy 21
Investment in cleantech in 2009 declined less than in other sectors 21
The energy cleantech industry will look past the failures of Copenhagen to opportunities at home and in developing countries 22
Energy cleantech investment will keep growing in 2010 and beyond, despite great uncertainties in US and EU carbon markets 23
China will remain a market leader in energy cleantech and could overtake the US as cleantech leader in 2010 24
From the point of view of Chinese renewable energy firms and manufacturers, cleantech is a golden export opportunity 25
Life will not be breathed into the Copenhagen Accord at COP16* - Mexico City will deliver more stalemate 26
Datamonitor's 10 clean energy technology predictions for 2010 concern players across the entire energy value chain 27
Ask the analyst 32
Datamonitor consulting 32
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