http://www.bloomberg.com/apps/news?pid=20601072&sid=a0xlsy_i.u0k

Government negotiators are already writing off chances for a global treaty to fight climate change, nine months before the annual talks begin in Cancun, Mexico.

Kunihiko Shimada, principal international negotiator at the Japanese Ministry of the Environment, said yesterday a deal this year is “almost impossible.” Jos Delbeke, who spearheads European Union climate policy at the European Commission, ruled out a “comprehensive legal agreement” in 2010.
Their remarks call into question whether efforts to curb greenhouse-gas emissions are progressing after failing in Copenhagen in December. President Barack Obama’s energy proposal is bogged down in the U.S. Congress. Without a U.S. commitment, China and India, two of the fastest-growing polluters, may be reluctant to limit greenhouse gases blamed for global warming.
“The expectations for a legally binding treaty are diminishing,” Abyd Karmali, global head of carbon markets at Bank of America Merrill Lynch, said in an interview at the Bloomberg New Energy Finance conference in London. “A lot of it is contingent on what we get in Washington. Right now it doesn’t seem it’s going to be as much as we thought.”
Shares of renewable-energy companies have sunk since the previous talks in Copenhagen ended on Dec. 19. While United Nations and European officials began predicting no treaty would be signed at the Danish capital about three months before negotiations started, the NEX index of 86 wind, solar and biofuels companies has dropped 6.2 percent since envoys left Copenhagen for home.
Market Concern
Vestas Wind Systems A/S, the world’s biggest maker of wind turbines, has since lost 11 percent. First Solar Inc., the world’s biggest maker of thin-film panels, has shed 16 percent.
The industry still may benefit from a record $200 billion in investment this year, up from $162 billion in 2009, as solar and wind power projects are seeded by government economic stimulus programs in the U.S. and Europe, Bloomberg New Energy Finance Chief Executive Officer Michael Liebreich said yesterday.
“We’re going to be negotiating on climate for the next 50 years,” said Liebreich, founder of New Energy Finance, which Bloomberg LP purchased in December. “This is a big, serious, heavy-engineering industry. It’s not biotech.”
“We shouldn’t raise too high the expectations for Cancun,” Shimada said. “It’s probably almost impossible for us to reach a legally binding, full protocol.”
Munich Re, the world’s largest reinsurer, Duke Energy Corp. and other companies had called on the UN delegates to deliver guidelines in Denmark on emissions to help them plan investments and strategy.
Healthcare Bog
“The conventional wisdom is that there will not be legislation this year,” James Rogers, chairman of Duke, said in an interview. “It seems that Congress is bogged down by healthcare and other issues. We need clarity. We need road maps. We need to make decisions.”
The benchmark European Union carbon permit has fallen 4 percent to 13.04 euros a ton on the European Climate Exchange since the last round of climate talks ended. Negotiators convene in again in November.
“We will not have in Cancun a comprehensive legal agreement,” Delbeke said. “What is going to be important from Cancun is a limited number of concrete deliverables, and that is going to be fast start funding, the question of deforestation, adaptation. We should not overload Cancun.”
Scrapping the effort to make a legally binding accord among more than 190 nations at the Copenhagen talks, leaders from the U.S., China, Brazil, India and South Africa forged a voluntary pact aimed at limiting emissions of carbon dioxide. They invited others to sign on, and about 100 nations have now done so. They represent more than 80 percent of global emissions.
Step Forward
Michael Jacobs, an adviser on climate change to U.K. Prime Minister Gordon Brown, said the Copenhagen Accord is a step forward.
“We’ve now got the foundation to an international agreement which is very, very significant,” Jacobs said. “If those commitments are enacted to their full extent, global emissions will peak in 2018 or 2019 and certainly by 2020, which is a complete transformation of the prospects.”
The agreement set no binding caps on gas discharges and aimed to keep the global temperature increase since industrialization to 2 degrees Celsius (3.6 degrees Fahrenheit).
“The portrayal of Copenhagen as a great success is trying to put lipstick on the pig,” Steve Sawyer, secretary general of the Global Wind Energy Council, a Brussels-based industry group, said in an interview. “We’re clearly without the U.S. because the U.S. is not going to do anything.”