Australia is at risk of being left out of the global carbon market and clean technology investment sector if further procrastination on legislating a local carbon market continues, warns Deutsche Bank's Head of Carbon Emissions Research, Mark Lewis.

A regular and top-rated contributor to the global debate on carbon trading, Paris-based Lewis is in Australia to deliver an update on European Union (EU) energy markets to policy makers, institutions and corporates.

Having followed the European Union's Emissions Trading Scheme (ETS) very closely since its inception in 2005, Lewis is a firm advocate of a swift move towards a market based rather than a fixed price system.

"Cutting Australia's emissions cost-effectively requires carbon pricing and a move to a market-based system will help reduce emissions at the lowest cost," he said.

With the EU ETS now entrenched as a major pillar of EU climate policy and constraining the growth of Europe's carbon emissions, Lewis stressed the need to give visibility to industry.

"There has been progress in Australia but a lack of visibility can translate into uncertainty. For any investor looking to take a long view on the carbon price, they need absolute clarity," he said.

"Meanwhile those industries that will be most affected are those with very long-term capital investment structures. For them, the key point isn't so much what the carbon price is today, it's clarity around what it will be further down the line to give people the visibility to invest," he said.

Lewis said the biggest threat is further delays to the introduction of any carbon scheme. "The short term cost of a carbon scheme is vastly outweighed by the longer term costs of not doing anything. More delays will ultimately cost everyone - business, government and not least the environment," he said.

The EU has a carbon trade scheme, as does New Zealand, while a regional scheme operates across 10 eastern US states. California has also approved an emissions trading scheme to start in 2012 which Lewis says provides a relevant comparable with Australia.

"The fact is that there is a global carbon market functioning for Australia to plug into. This isn't just an environmental argument but an important economic argument where Australia will lose ground unless it moves quickly," he said.

"The opportunities to develop green or clean technology investment solutions are enormous, creating long-term jobs in both skilled and unskilled areas. This can only take place when a carbon price is fully integrated."

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