What's the Exchange Rate in Hell?


"It's a well-known fact that the Greater Good and the Greater Profit are not compatible aims" - among the many powerful aphorisms populating Yann Martel's The Life of Pi, few pack more punch than this explanation of a family zoo closing in India. Unless you've been irreparably indoctrinated by Jack Welch, you've been there, stuck at the trailhead where your ideals diverge from the route of steady income. Wander left or right, and you probably wake from fitful slumbers wondering why in god's holy name you took that infernal route.

Either you capitulated to your capitalist instincts, or you're scraping by on a pauper's wage while battling the issues that keep you up at night. Among those insomnia-inducing worries might be the beleaguered earth, whose conquerors write the checks. Nope, the free-market economy hasn't been kind to the true-blue environmentalist.

Don't despair. Had you been at The New York Times building in early April, you'd have witnessed an entirely new breed of capitalists. Good ones! The Wall Street Green Trading Summit attracted carbon prospectors looking to promote cleaner free markets, including executives from Morgan Stanley, JPMorgan Chase and Wal-Mart. Industry honchos were buffeted by leaders in renewable energy; energy efficiency markets, such as the Chicago Climate Exchange (CCX), the world's only regulated, voluntary carbon exchange (if only Bear Stearns had lived to see this).

So what exactly is a carbon market, and why would one buy and sell something as reviled as carbon emission? For one, Joshua Alban, a trader for the firm World Energy, recently told NPR that "Carbon Trading is super-sexy." I don't know about you, but my nipples are stiff.

Beyond the obvious sexiness, Carbon Emissions are profitable and unregulated, which means MBAs like Josh are piling into the carbon-trading sector with the same tried and true quantitative approaches that buttressed the mortgage industry. Merrill Lynch has launched a new global emissions benchmark, the MLCX Global CO2 Emissions Index to monitor the market. And since Carbon Emissions trading is designed to stanch climate change, Josh is not just a globe-trotting dealmaker, oh no, he's an environmentalist. Dozens of companies offer voluntary carbon offsets that operate outside of the regulatory framework of Kyoto. Each company, including the CCX, offers unique offsets with separate standards, verification and prices - the most rigorous standard being the Gold Standard.
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