Progressive Democrats of America has posted an informative article about the complexities of government-run carbon markets and some of the potential pit-falls.
Wall Street firms recognize the lucrative potential of the carbon market and have already stepped up their lobbying efforts. According to Public Integrity, “Wall Street banks like Goldman Sachs and JP Morgan Chase, insurance companies like AIG and private equity firms had virtually no reps on Capitol Hill working on global warming policy in 2003; by last year, they had about 130 climate lobbyists, the Center for Public Integrity’s analysis of Senate lobbying disclosure forms shows. About 20 additional lobbyists worked for firms and organizations wholly dedicated to carbon marketing last year.”
The policy demands of these financial firms may vary, but most will push for weaker regulatory standards on carbon markets, larger volumes of carbon offset authorization, and provisions to increase the volatility of carbon prices, all of which would hinder progress on reducing U.S. emissions. For example, the financial industry will continually call for carbon allowance trading to be allowed OTC (over-the-counter), a form of derivatives trading that gives firms and traders the most leeway to leverage, speculate, arbitrage, and maximize profit by avoiding regulations. And the greater the volatility in the carbon allowance and offset market – and the larger the volume of offsets allowed–the more trading, arbitrage, and speculation these firms can benefit from.
While we’re waiting for our politicians to figure all that out, why not take some direct action on your own? You can buy carbon offsets through Project Purify for just a few dollars without any complexity at all!
