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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
[email protected]
Sara Peary
Research at the
European Parliament
• NCRE placement: FebruaryMay 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
Sara Peary
Research and Involvement:
• Attendance and reporting of Committee
Sessions, Internal Meetings and Parliament
Events
• Observation and Recommendation
• Interviewing
• Networking
• Research and Data Gathering
Sara Peary
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
Sara Peary
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
Sara Peary
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
Sara Peary
"…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)
Sara Peary
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
Sara Peary
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
Sara Peary
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
Sara Peary
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
Sara Peary
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
Sara Peary
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
Sara Peary
An International Analysis of
Emissions Trading Markets:
Implications for Business Strategy
• To investigate the link between
emissions trading legislation and firmlevel strategy and operations, and to
assess implications for firms
Sara Peary
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?
Sara Peary
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?
Sara Peary
Emissions Trading Markets: Sampling Framework
European
Union
Firm Level:
Private Sector
Institutional
Level:
Government
Interviews with
Industry
Organisations
Secondary
Research:
EU Members of
Parliament
EU Commission
European
Environment
Agency
State
Governments:
DEFRA/UK:
Environmental
Protection
Institutional
Level:
NGO’s
United
States
Australia
Interviews
Industry
Interviews
Industry
Organisation
Organisations
Notes
New Zealand
Interviews
with Industry
Organisation
s
Secondary
Research:
Departments
of State and
Energy,
Environmental
Protection
Agency.
Secondary
Research:
Australian
Greenhouse
Office,
Department of
the
Environment &
Heritage
Ministry of
Economic
Development
State
Governments:
California &
New York
State
Governments:
Victoria & NSW
Ministry of
Foreign Affairs
& Trade
D
I
m
e
n
s
I
o
n
s
1: Sustainability
Focused
Organisation
2: Traditional
Industry
Organisation
Secondary
Research:
Ministry of
Environment,
Appropriate government
institution of each region
in charge of emissions
trading policy.
The Climate Group
Greenpeace
Friends of the Earth
Climate Action Network Europe (CAN)
International Emissions Trading Association (IETA Toronto/Geneva)
Carbon Trust- UK
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-maker’s 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?
Sara Peary
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
[email protected]
027 460 8875
Sara Peary