The Biggest Financial Market in the History of Man? Is that a Good Thing?
source: http://CNBC.com
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Carbon Could Be No. 1 Commodity: Exchange Chief
Published: Monday, 26 Apr 2010 | 12:49 PM ET Text Size
By: Natalie Erlich
Carbon trading is set to become the world's largest commodity market, Richard Sandor, chairman and founder of the Chicago Climate Exchange, told CNBC.com.
“Carbon, when it becomes worldwide, will be unambiguously the largest commodity in the world,” Sandor said in an interview. “The world emits 35 billion tons; it’s priced at $20; that’s $700 billion. Put a 10-20 multiple like you do on futures, [and] you’re talking about $10 trillion at maturity.”
Sandor, who was a major player in the formation of the interest-rate futures market, created the Chicago Climate Exchange [CCX] as a market-based solution to global warming. Time Magazine named him “Hero of the Planet” in 2002, and the “father of carbon trading” in 2007.
“In ’89-’90 someone came to me and said, ‘you commoditize interest rates, do you think you can commoditize air?’” he said. “You could cap the emissions that any utility has, and if they go below that cap, they can sell their emissions, their rights to emit— and if you can go above it, you can buy someone else’s. So it drives compliance.”
Published: Monday, 26 Apr 2010 | 12:49 PM ET Text Size
By: Natalie Erlich
Carbon trading is set to become the world's largest commodity market, Richard Sandor, chairman and founder of the Chicago Climate Exchange, told CNBC.com.
“Carbon, when it becomes worldwide, will be unambiguously the largest commodity in the world,” Sandor said in an interview. “The world emits 35 billion tons; it’s priced at $20; that’s $700 billion. Put a 10-20 multiple like you do on futures, [and] you’re talking about $10 trillion at maturity.”
Sandor, who was a major player in the formation of the interest-rate futures market, created the Chicago Climate Exchange [CCX] as a market-based solution to global warming. Time Magazine named him “Hero of the Planet” in 2002, and the “father of carbon trading” in 2007.
“In ’89-’90 someone came to me and said, ‘you commoditize interest rates, do you think you can commoditize air?’” he said. “You could cap the emissions that any utility has, and if they go below that cap, they can sell their emissions, their rights to emit— and if you can go above it, you can buy someone else’s. So it drives compliance.”
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- groups:
- Carbon Trading
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- tags:
- Green, Sustainability, Green Jobs, carbon trading, 1 more
