Carbon Trade

“I’ll trade you three carbon dioxides for your two methanes,” said one air polluter to the other.

Carbon trade refers to cap and trade plans where governments are encouraging companies to limit their carbon emissions by setting overall limits and issuing permits.

If a company such as a utility, airline, or car manufacturer stays below their limit, they can sell their excess permits on the carbon market for cash. If they don’t limit their emissions, they may have to buy extra permits. Companies appear to prefer this method as opposed to being taxed or regulated.

While the U. S. Environmental Protection Agency has been approved to regulate emissions by the Supreme Court, they still have not gotten around to letting individual states do so. However, several large companies, such as General Electric, Johnson & Johnson, DuPont, Shell, and BP have joined together to form a partnership to help pressure the federal government to pass legislation to limit greenhouse gasses.

In fact, carbon is predicted to be the next hot commodity for trading, and one of the fastest growing specialties for investment firms. With a market now worth over $100 billion, with many countries regulating their emissions, and private corporations, universities, and municipalities voluntarily limiting theirs, the demand for carbon credits should go way up—along with their price.