Carbon as a Global asset class

All the minor arguments about the veracity of temperature change estimates, the impact of various carbon reduction schemes against the ‘business as usual’ case, or the relative pricing of carbon permits are missing the point.

The problem is that current approaches aren’t truly global in scale. Climate change is a macro scale problem, and as a global phenomenon it should be approached with clear singular broad brush targets in mind to which a value can be attached.

With a clear valuation, carbon can become as well established as any other asset class trading on international markets, driving badly needed investment and innovation; it’s an integral part of our energy intensive economy which can only increase in value. A few years ago most investors couldn’t consider gold to be an accessible asset class, enter the ETC.

The actual valuation price of the initial offering can be debated at our leisure in the same way as every other in the market, at least the system will have started doing it’s work.

I’m hoping that the forthcoming meeting in Copenhagen will result in a more realistic approach and scale of carbon trading, let’s hope Tony Blair’s recent optimism about the meeting isn’t misplaced.