Document summary
COP-16 made progress on a range of issues but produced no reassurances that a globally binding climate deal to succeed Kyoto can be secured at COP-17. There seems little prospect of a second international commitment period in place by 1 January 2013 and in the absence of material progress market interest outside the EU in 2011 is likely to focus on California and Australia. This makes it unlikely the EU will raise its 2020 emissions-reduction target in 2011, and the key to EUA prices over the next 12 months will continue to be the dynamics of the German power market.