The global greenhouse gas market needs better governance to give investors and banks confidence to finance trades potentially valued at $1 trillion by 2020, said Merrill Lynch & Co.'s Abyd Karmali.

``At present, we lack the most appropriate governance structure,'' Karmali, the London-based global head of carbon markets at Merrill, said today by phone. Karmali said he was elected president of the Carbon Market and Investors Association for a two-year term starting Aug. 1.

The greenhouse gas market, which had $64 billion of trades last year, may grow to a third of the size of the oil market by 2020 as governments seek to curb output of heat-trapping gases blamed for climate change, Karmali said. The United Nations is leading negotiations for a successor to the 1997 Kyoto Protocol in a series of meetings through next year.

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