Carbon trading has the potential of becoming the largest
commodity by trading volume, according to Bart Chilton,
commissioner at Commodity Futures Trading Commission. But as
carbon traders get rich as the market takes off, what about the
little man. Well, in the UK in June, BP, in conjunction with a
major supermarket loyalty scheme and IT supplier Atos Origin,
launched a personal carbon credit trading trial, which could
easily develop into a global futures market. Now Sweden and the
US are both beginning to show interest.
Each consumer will be credited with an allotment of carbon
emissions, which represents five tons of carbon dioxide per
year – about half the average UK citizens
lifestyle-related carbon emissions. Every time the user buys
petrol from a BP station, units will be deducted.
The users will be able to monitor their units and trade them
on an online system called CarbonDAQ – the perfect
breeding ground for an organized listed futures market. Like in
the big boys’ carbon credit market, those who need
or want to make certain purchases would need to buy more
credits from those not using so much, thus creating both spot
and future values.
Atos Origin – which joined forces with AtosEuronext
in 2000 and then announced a major expansion in the form of
Atos Euronext Market Solutions in 2005 and has previously
provided Liffe with its technology – is behind the
scheme. Atos Origin has also designed and built all of
BP’s forecourt payment systems.
The scheme being run by the Royal Society for the
Encouragement of Arts, Manufacturers and Commerce is open to
1,000 people and the estimate for setting up the scheme
throughout the UK is between £700 million ($1.4 billion)
and £2 billion, according to the UK’s
Department for Environment, Food and Rural Affairs. But this
figure is sparking debate as to whether the scheme could be run
by the private as opposed to the public sector.
Now, the suggestion from the UK’s Environmental
Audit Committee’s chairman, Tim Yeo, that the best
way to cut carbon dioxide emissions without hurting the poor is
to go through the personal credit method is hitting home in the
US. While the US Senate is debating a climate change bill that
would put limits on the amount of greenhouse gases businesses
can emit, debate is beginning to build around an initiative
more aimed towards individuals.
And why not a retail carbon futures market. After all, with
prices of petrol affecting the average man and with a growing
awareness of individual carbon front prints (combined with the
good old-fashioned allure of making money), it could be as big
as the Kospi.
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