Carbon market can save the world

I have a soft spot for Australians, especially when they aren't in Australia. The expat Aussie has a certain independence, a sharpness of wit that can be very becoming. As an Englishman visiting them in their home country, however, their attitude can be somewhat wearisome – especially if there's any sort of contest involving cricket going on.

Australia is a great country, but it seems many Australians don't want to hear those words framed in an English accent. That said, the opposite approach doesn't work very well either. The former British colony remains just that – a former colony – in many an Australian's psychological make-up. So when an Australian bristles as an Englishman praises his nation, it's generally not a good idea to say: "OK, I'm an Englishman, and I think Australia's great. You have my permission to feel grateful."

I tried that once at the captain's table on an Australian ship, and almost got thrown overboard.

However, when the boot is on the other foot… that boot turns out to be a velvet slipper. I have just attended an enjoyable meeting in London organised by Advance, a network of Australian professionals dedicated to the cause of promoting Australia and Australian business worldwide. A seminar entitled 'International climate negotiations after COP15' featured presentations from a couple of panellists, Anthony Hobley, a partner in the international law firm, Norton Rose, and Geoff Sinclair, head of carbon sales and trading at Standard Bank. The discussion was very impressively moderated by James Cameron – not the movie director, but the vice-chairman of Climate Change Capital. Cameron spoke himself and then focused the discussion on what the outcome (or lack of it) from last December's climate-change conference in Copenhagen might mean for Australia and the Carbon Pollution Reduction Scheme.

It was fascinating to get a fly-on-the-wall view of events at what has to be the most media-saturated conference there has ever been.

Cameron intimated that a prime cause of the failure to reach any meaningful agreement at Copenhagen was the logistical nightmare of the conference arrangements. The Danish government and the United Nations together could have done better (although as I recall the language used was a little spicier). The media played an intrusive role; there was an entrance system that didn't seem to do anything other than create long lines of frustrated people outside, and leave the hall itself largely empty.

I remember reading blogs from BBC journalists and others at the time. But at the Advance meeting, I felt I was getting the real story – there was no need to be polite for fear of being banned from the hall. Apparently, and I suppose predictably, it all got worse in the second week when the heads of state arrived with their own security teams; there were no break-out areas to facilitate private discussion. In short, there was no hope of any sort of agreement being reached for banal, logistical reasons. How depressing is that?

A more positive aspect of the discussion was the theme that carbon taxes won't work, while a carbon market will make a difference. The consensus view was that no individual government is ever going to set a carbon tax so high that it will change corporate behaviour. The simple tactic will be for companies to change location to lower-tax venues. However, a carbon market makes sense to business people – who like the mechanism, see the market as an efficient mediator of money, business and politics, and understand the basics of how it all works. The reforestation projects are also attracting much interest from corporate and carbon-trading desks alike.

I have to say I instinctively do not trust many who follow the environmental movement. In some cases, it's just a new way for the disgruntled and the disentitled to carp at capitalism and hanker after authoritarian control. Communism used to offer a mechanism to ventilate those prejudices.

And as for the environment itself? Well, yes, data cheats notwithstanding, I do believe that something needs to be done. I do believe that it's up to our generation to do something, and that we should get on with it.

While I don't for one second put forward market capitalism as a way in which the world can save itself, I believe in its efficacy. This meeting was refreshing on many levels. The marriage of business and environmental good sense was there for all to see. These were people whose land has for years been suffering from drought and they quite rightly want to do something about it – and do it in a way that makes commercial sense.

- The writer is a journalist, author and commentator on international business affairs

Musical notes

There have been developments on the £4 billion [Dh22.35bn] EMI deal I commented on a while ago. The deeply talented Guy Hands and his Terra Firma group bought the music publisher at the top of the market, and he is believed to have confessed that maybe he paid too much for it.

Now it seems that there's cash to be found, and quickly. Terra Firma have to come up with £120 million by mid-June, or Citigroup will start getting very agitated. So summer is crunch time for EMI and Terra Firma. I'm not sure he'll do it, but if anyone can pull through, it's Hands. I certainly hope he does.

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