I’m now working on a research paper on carbon markets and how a global system of interlinked markets can and should look like. It’s a fascinating topic and I just now found this in a speech from 2009 by the US commissioner for the Commodity Futures Trading Commission, Bart Chilton;
If we take a quick trip in the Wayback Machine to the origins of these [carbon cap and trade] markets in the 1990’s, it is obvious that the global market for carbon emissions has grown tremendously. In 2002, the World Bank estimated the volume of carbon emissions traded globally at 32 million metric tons with a value of approximately $100 million. For 2008, these values were 4.8 billion metric tons, and a total dollar value of $126 billion. What does all that mean? It means that the market value of global carbon trades has experienced an average annual growth rate of about 329 percent since 2002! That is a cumulative increase of 126,000 percent! That’s not conjecture, it is a hard number fact that this trading has gone from $100 million to $126 billion.
Taking this a step further, we observe generally that in developed markets, futures trading is conservatively 10 times the size of the cash market for many commodities and can even be as great as 30 times that of the cash market for certain financial products. Even with the conservative assumption of 10 times the cash market, this would imply we are looking forward to a $2 trillion dollar futures market!
In terms of volume, a $2 trillion market would be the equivalent of anywhere from 60 to 180 million contracts. To give you an idea of the magnitude of this, in 2008, Light Sweet Crude Oil traded on NYMEX saw a volume of about 135 million contracts. Natural Gas experienced an annual volume of almost 39 million contracts, and all metals combined on NYMEX, about 53 million. So, we are talking about a really incredible potential for emission markets.
Make no mistake, these carbon markets can be the world’s largest commodity markets in a few short years.
I’ve started my new job as program director for environment at the FORES think tank in Stockholm this week and I’m really excited about the road ahead.
My responsibility will be to coordinate a project portfolio ranging from carbon trading conferences to high quality academic research together with renowned professors in Sweden and beyond.
I will also do research myself and be the editor of a series of policy papers and reports on environmental economic policy. The first material will be published not too far off in the future and I’ll of course upload the material here.
More about FORES:
Forum for Reforms, Entrepreneurship and Sustainability (FORES)
The green and liberal research institute
An independent research foundation dedicated to furthering entrepreneurship and sustainable development through liberal solutions to societal challenges brought on by accelerated globalisation and global warming.
FORES’ main activities is to initiate research projects and public debates that will result in concrete reform proposals in relevant policy areas such as:
Market solutions to environmental issues
Harnessing the positive potential of immigration
The role of civil society in entrepreneurship
The flexibility of labour markets
The protection of the civil rights of the individual
Modernising public services
In so doing FORES relies heavily on a vast network of academics, supported and coordinated by a small core of research managers and communication officers. Papers and books from the Institute are subjected to peer review processes. Researchers and reviewers are drawn from universities and colleges across Sweden, and some abroad. Studies are empirically oriented in order to be as policy relevant as possible.
The Institute makes full use of new media, with its webpage being the focal point for its communication and dissemination of research findings and public debates. FORES strives to be an interactive forum for all those interested in its activities.
To ensure the independence of the Institute it has been constituted as a foundation with a board of directors composed of academics, experienced former politicians, businesspeople and opinion leaders. The founders of FORES are the Swedish Centre Party, the Bertil Ohlin Institute and Studieförbundet Vuxenskolan.
Truly mind boggling movie clip. I once heard a Swedish astrophysicist at MIT reflect about space and humanity’s seemingly total irrelevance in the great big universe. He said that it was quite common amongst space scholars to at one point or another become a bit sad over the fact that we are so small and know so little and that the time we are alive is so short it could truly be called a “fart in space”. But, he said, lately he had begun to believe that there maybe isn’t that much intelligent life in space after all, and that we humans-if we don’t mess up our planet before we succeed-might in fact carry forward the species that will eventually colonize space and make large parts of the universe sparkle with life where there before was none. If he’s right, we are not carriers of such small a significance in the great big unknown after all.
“We do not have to think that human nature is perfect for us to still believe that the human condition can be perfected. We do not have to live in an idealized world to still reach for those ideals that will make it a better place. The nonviolence practiced by men like Gandhi and King may not have been practical or possible in every circumstance, but the love that they preached — their faith in human progress — must always be the North Star that guides us on our journey.”
Avaaz is an organisation that I personally have a great respect for.
Dear friends,
Haiti’s worst earthquake in 200 years struck yesterday, devastating the capital city, killing thousands and threatening over 3 million people in this desperately poor country.
Haitians are urgently appealing to the world for help — we’re already in touch with strong local organisations mobilising community-based relief efforts. Let’s send a worldwide wave of donations to the front lines, to save lives now and help people recover and rebuild. Avaaz will work partners to make sure the help reaches those who need it most. Click below to donate:
Based on expert advice from leading humanitarian NGOs who have been working in Haiti for over 30 years, we’ll offer donations to trusted local organizations, including:
Honor and Respect for Bel Air, a big community-based network in Haiti’s capital Port-au-Prince, which is also supported by our friends at the respected Brazilian NGO Viva Rio
Coordination Régionale des Organisations de Sud-Est (CROSE), which brings together some of the most active community groups in the South of Haiti where the earthquake struck hardest. These groups include: women’s groups, schools networks and local cooperatives
In 2008, Avaaz members donated over $2 million for Burmese monks to respond to the devastating Cyclone Nargis. Our money made an incredible difference there — because it went directly to local people on the front lines of the aid effort.
Times of painful tragedy can bring out the best in us by bringing people together. Let’s join with the people of Haiti to help them rescue their communities from this brutal disaster — act now at this link:
I wasn’t “in the room”, but I was in the building and can very strongly confirm this statement by Lynas:
… this further strengthened China’s negotiating hand, as did the complete lack of civil society political pressure on either China or India. Campaign groups never blame developing countries for failure; this is an iron rule that is never broken. The Indians, in particular, have become past masters at co-opting the language of equity (”equal rights to the atmosphere”) in the service of planetary suicide – and leftish campaigners and commentators are hoist with their own petard.
This is a huge problem! Virtually all civil society movements and activists are so eager to be perceived as pro equity and pro the rights of developing countries that they sometimes fail to see the issues soberly. The global climate negotiations is not all a neo-colonialist game, western leaders aren’t totally failing to take responsibility for historical emissions and China isn’t trumping the developed world in leadership on climate change. The sooner we realize this and start to be less ideologically colored by the history of our movements the better. Rich countries have a tremendous responsibility to chair, but so do others and the rich people in eastern China and urban India has no right to use poor people on the countryside as alibis for not taking action to stop climate change.
When the negotiations boils down to a situation where U.S. politicians refuse to take action that they perceive will deteriorate an already weakening competitiveness against Chinese (and other developing countries) industries, and where the Chinese elite refuse to take any action that they fear will weaken their grip on power and limit the growth that deliver social stability - social movements have to realize that the solution can’t be to lay the blame only on governments in the developed world. Of course many countries aren’t doing nearly good enough and especially so the U.S., but we have to put pressure on all governments and not least so in countries lacking free social movements of their own!
Who, Where, Why? I'm a 27 years old swede political economist and entrepreneur trying to make things more sustainable. Here I write about stuff I do and think.
