banks get behind emissions trade desks

Banks get behind emissions trade desks
Marc Moncrief
February 12, 2007

FIRST movers establishing the infrastructure for an Australian carbon-trading market will face battle-hardened teams from investment and commercial banks if a trading scheme is introduced.

Two of Australia's four largest banks are operating desks overseas from which they intend to import lessons should a trading system be imposed in Australia.

Westpac owns and runs the energy trading desk left behind by Enron's collapse, while ANZ has a desk established to help its business clients comply with trading systems in place in Britain and the European Union.

Most investment banks working in those regions — including ABN Amro, Merrill Lynch, JP Morgan, Dresdner Kleinwort, Morgan Stanley, Goldman Sachs and others — also have emissions trading desks as part of their global infrastructure.

National Australia Bank boss John Stewart sits on the Prime Minister's Task Group on Emissions Trading, and the bank has set up a "carbon solutions group" to develop products for carbon-sensitive clients.

In 2003, NSW established one of the first mandatory emissions trading schemes in the world. Energy retailers in NSW must participate in programs to offset carbon emissions.

But Ken Edwards, director of energy trader Nextgen, said small players still dominated the market.

He said the emissions market in Australia was following the "traditional development of markets", under which first movers carved out space for the industry before large corporate traders move.

age.com.au