Sara Peary

An International Analysis of Emissions Trading Markets:

Implications for Business Strategy

Sara PearyMaster of International Business

ProgrammeUniversity of Auckland

Business Schoolsarapeary@hotmail.com

Sara Peary

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

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 firm-level 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?

     

European European UnionUnion

  

United United StatesStates

  

AustraliaAustralia  

New ZealandNew Zealand  

NotesNotes

  

Firm Level:Firm Level:  

Private SectorPrivate Sector

  

Interviews with Industry

Organisations    

  

Interviews Industry

Organisation  

  

Interviews Industry

Organisations  

  

Interviews with Industry Organisation

s  

DDIImmeennssIIoonnss

1: Sustainability Focused

Organisation

2: Traditional Industry

Organisation 

    

Institutional Institutional Level:Level:

  GovernmentGovernment

  

Secondary Research:

EU Members of Parliament

 EU Commission

European Environment

Agency 

State Governments: DEFRA/UK:

Environmental Protection

Secondary Research:

Departments of State and

Energy, Environmental

Protection Agency.

  

State Governments:

California & New York

Secondary Research:Australian

Greenhouse Office,

Department of the

Environment & Heritage

 State

Governments: Victoria & NSW

Secondary Research:

 Ministry of Economic

Development 

Ministry of Environment,

 Ministry of

Foreign Affairs & Trade

    

Appropriate government institution of each region in charge of emissions

trading policy.

  

Institutional Institutional Level: Level:

  NGO’sNGO’s

  

The Climate GroupGreenpeace

Friends of the EarthClimate Action Network Europe (CAN)

International Emissions Trading Association (IETA Toronto/Geneva)Carbon Trust- UK 

Emissions Trading Markets: Sampling Framework

Sara Peary

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 BusinessUniversity of Auckland

Business Schoolsarapeary@hotmail.com

027 460 8875