Carbon emissions market could reach $1.4 trillion in 2020

The global market is slated to pick up in 2011, as power companies in Europe get ready for the next phase of the European Union emissions trading system that requires new reductions beginning in 2013. Activity should also increase in anticipation of emissions trading rules being put into effect in the U.S. and Australia, the report finds.

Indeed the NEF analysts don't think the underwhelming outcome of the Copenhagen climate summit will constrain market growth. They predict the U.S. will pass a cap-and-tade bill this year or in 2011, and also think an emissions law will make a comeback in Australia after that nation's Senate blocked it last year.

"The future growth of the world's carbon markets will not be determined by the success, or indeed likely failure, of the U.N.-led process to deliver a legally binding agreement but rather progress in climate legislation at the national level," the report states.