Prepare for the Next Bubble…For a Made Up Commodity
Nicolas Loris /
At least when there was a housing bubble, there were actual houses involved. The next bubble could ostensibly be a carbon dioxide bubble; the newly-created, artificial market for a clear, odorless gas is growing at rapid rates. According to a new article from Mark Shapiro in Harper’s:
Carbon trading is now the fastest-growing commodities market on earth. Since 2005, when major greenhouse-gas polluters among the Kyoto signatories were issued caps on their emissions and permitted to buy credits to meet those caps, there have been more than $300 billion worth of carbon transactions.
Major financial institutions such as Goldman Sachs, Barclays, and Citibank now host carbon trading desks in London; traders who once speculated on oil and gas are betting on the most insidious side effects of our fossil fuel–based economy. Over the next decade, if President Obama and other advocates can institute a cap-and-trade system in the United States, the demand for carbon credits could explode into a $2 to $3 trillion market, according to the market-analysis firm Point Carbon.”