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CFTC: Carbon trading could become $2 trillion market

Published Friday, 27th June 2008

Stocks and sharesCommodities trading has always intrigued Greenbang ever since, as a little girl, she sat down to watch the Eddie Murphy and Dan Ackroyd film Trading Places. Why there are so many heart attacks and bankruptcies over pork bellies and frozen concentrated orange juice she’ll never know.

There is one market she could get into, however.

Yesterday, the FT reported that the market in greenhouse gas emissions is potentially set to become the biggest traded commodity.  This is according to the head of the US Commodities Futures Trading Commission, Bart Chilton.

Bart Chilton reportedly stated “Even with conservative assumptions, this could be a $2,000bn futures market in relatively short order.”

The Norwegian environmental market analyst firm Point Carbon has gone even further estimating the global carbon market could reach more than $3,000bn in 2020.

As cited in by the FT article:

Carbon trading was worth about $64bn last year, according to the World Bank, but the US accounted for a small fraction of this. Most of the trading – about $50bn – was carried out under the European Union’s emissions trading scheme, with nearly all of the rest carried out under the Kyoto Protocol, which the US has not ratified.

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