A Dow Jones Newswires Column

Sadly, that doesnt look likely to happen and, even if it does, it wont be today. The delegations have extended the conference to Saturday and the Dutch capital is now buzzing to the sounds of agents rescheduling flights and photocopiers churning out the latest compromises.

So COP-6 is likely to be a lost opportunity. It wont produce any clear rules for binding developing countries into the emissions market. Since these have enormous potential to generate carbon credits for themselves and inward investors, failure at the Hague will deny the carbon market a key source of liquidity.

In addition, it puts off the day of ratification and, hence, the time when those exceeding their quotas will be forced to buy credits. So demand could stay basement-bound, leaving prices at a level so unattractive as to deter all but the hardiest of intermediaries from bringing their liquidity-providing services to the market.

But perhaps the biggest harm COP-6 will do to the emissions market is in preventing efficient, reliable pricing. COP-6 wont tell us whether and at what value credits generated from carbon sinks and other forestry projects will ever be recognized globally.

This will probably inhibit trade in bona fide credits garnered more expensively from real emissions, as well as trade in sink credits. After all, who wants to buy credits at $20 a ton from a project that actually cut emissions in Hungary, if a COP-7, COP-8 or COP-25 is going to allow U.S. traders to dump millions of tons of sink-generated credits at $1 a ton on the world market in three years time?

However, if the will is there, Kyoto signatories can turn all of this to advantage. Most E.U. countries have legislation drafted and ready to be implemented that will allow emissions trading to start, irrespective of the Kyoto process. They will find it easier to shape, coordinate and develop a smaller market based on homogeneous and environmentally rigorous legislation than a transatlantic or global market based on legislation whose environmental value is deeply questionable.

Of course, whether European smelters, power generators and chemicals companies are savvy enough to trade it properly is another matter. Judging by their performance in the power market, they need all the help they can get from Natsource Tullett, Cantor Fitzgerald and all the other visionaries that are doing most to get ahead of the emissions trading game.

Naturally, most European countries are going to miss their Kyoto targets pretty badly, so they too need an abundant source of credits from somewhere. Given the brash courting of Vladimir Putin by European leaders in recent weeks, especially in energy matters, it isnt too hard to guess where they intend to find it. All that pollution and only one government to negotiate with.

So farewell, COP-6. It may seem that you achieved very little at great expense but your very disunity put issues into much needed focus and still left us enough to be going on with until the next time.

Perhaps at COP-7, we will have the chance to "achieve" more without risking the environmental integrity of the whole process.