Carbon trading has become a huge business in the past few years. But is it really going to save the planet, or is it just a lot of hot air?
Carbon trading has become a huge business in the past few years. But is it really going to save the planet, or is it just a lot of hot air?
Soaring oil prices, politicians’ growing focus on the dangers of climate change and mounting demand for energy among emerging economies could push the carbon trading market toward the trillion dollar point by 2020.
The market in the trading of carbon—measured as a reduction in 1 metric ton of carbon dioxide or its equivalent in other greenhouse gases—climbed to $64 billion in 2007, more than double the $31.2 billion recorded in 2006 and nearly six times the amount tallied in 2005, according to World Bank statistics. Bankers, traders and brokers are helping to develop this growing financial marketplace by keeping trading liquid and flexible as they help corporations manage the long-term costs linked to reducing carbon dioxide emissions and complying with government mandates.
The global attention on climate change and reducing greenhouse gases will only continue against a backdrop of events, from this summer’s Group of Eight summit in Japan, to the current US presidential campaign, to talks now under way to create a successor pact to the United Nations-linked Kyoto Protocol by the end of 2009.
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