Comments on: ClimatePULSE: The Government Can Still Help the Carbon Market

By: Mark Byvelds

Mark Byvelds — Tue, 30 Sep 2008 15:15:13 +0000

The carbon market certainly has very important ties to the financial sector and GHG reduction projects, especially those with greater risk, will most definitely find it increasingly difficult to secure financing. Regardless of what happens when the Kyoto Protocol expires (keep in mind that the U.S. never ratified Kyoto), if the next administration follows through and creates a mandatory GHG reduction program, the carbon market will be forced to experience a boom. There is no doubt that such a boom in the carbon market will affect the financial sector – it’s just a matter of how. Some companies may find themselves in a position where they are unable to deal with the additional cost of either reducing their emissions or purchasing offsets, but in such a system must also be another company selling the offsets and making money. The economy may also thrive as GHG reduction technologies and practices are in high demand, creating jobs and building the industry. It will be quite interesting, we’ll just have to wait and see how it all plays out.

By: Dave Shires

Dave Shires — Tue, 30 Sep 2008 14:40:40 +0000

Or – you could simplify this a lot – if companies are trading carbon and they do things to make their operation a lot more efficient, they’re going to make money – that’s very good in a bad economy.

By: Charles Cheaze

Charles Cheaze — Tue, 30 Sep 2008 14:32:16 +0000

Interesting take on the issue. However, it seems like looking at carbon markets as separate from the financial sector is missing the point. Carbon markets are in fact a type of financial sector asset class – carbon commodities. There is even one large player in the market called “EcoSecurities” – albeit one whose investments don’t seem all that “secure” (pun intended). Given that the Kyoto Protocol is set to expire in 2012 and not likely to be renewed, and that carbon reduction projects typically require outside capital to get going, and that capital won’t be available to anything even remotely risky – all of that combined and it looks like carbon markets may hit a detour on their fast paced trajectory to world domination.