This is very positive for PHY as it will increase pressure on the Howard govt to reconsider its position on MRET. Labour are already committed to increasing MRET to at least 5%. The greens are calling for at least 10%. The libs have previously signalled their intention to maintain MRET at current levels, but with Russia signing up to Kyoto, the treaty becomes law, and Australia will be internationally isolated as a non-signatory. Most experts agree that Australia does not have the international clout to remain a non-signatory if the treaty goes into law. So even if the Libs win the next election, it is now realistic to expect Aust to ratify Kyoto sooner rather than later. Once Australia signs up to Kyoto, the most cost-effective way it will be able to meet its emissions targets is by increasing MRET, first to 5% and then 10% by 2010.
Once the analysts get hold of this news and understand its significance, I'd expect PHY to be re-rated to a $4.50 stock.
