Financial Soultions: Could Carbon trading get bigger than crude oil trading?

Oct. 8, 2009 - PRLog -- With carbon “cap and trade,” looking likely to be more of a “when” than an “if” Financial Soultions analysts feel that a potential multi-trillion dollar commodities market is on the very short term horizon.

Some relevant sources available to Financial Soultions have predicted that within 5 years of the start of trade in such carbon markets, the transaction value could be worth in the region of $2 trillion, making it the largest physically traded commodity in the U.S, and well exceeding oil.

These estimates are based on present futures activity in commodity trading, where it is fair to estimate 10 times the expected cash market, if one looks at the multimillion dollar voluntary U.S. carbon market during 2008,with possible carbon markets of between 60 to 180 million contracts, where only 135 million light sweet crude, 39 million natural gas, and 53 million all metal contracts were traded on the Nymex during the same period, Financial Soultions understands.


“It’s very exciting, the opportunities are really unbounded,” said a source, “We’re going to see innovation and really fast and furious growth. The potential for this market is truly impressive.”

The World Bank has judged the value of global carbon markets to have leapt from $110 million in 2002 to $126 billion in 2008, while a recent report indicates 123 million tons of carbon credits worth $705 million were traded in the U.S. in 2008.

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