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Kai Ryssdal: In the Senate tomorrow climate change will at least try to steal some of the spotlight from health care. We'll get our first look at what the Senate plans to do to fight global warming. Their bill is expected to bear at least a passing resemblance to a plan the House passed earlier this year in that it uses the free market to cut greenhouse-gas emissions.
Europe launched its market in what are called "carbon credits" four years ago. And we call 'em carbon credits because that's easier than explaining how they really work and whether they work. From London, here's Marketplace's Stephen Beard.
STEPHEN BEARD: After all the turmoil of the recent past, this may not sound like the answer to our prayers.
A market in complicated financial products. But this market in "carbon allowances" could save the planet, says Mark Nicholls, of Environmental Finance Magazine. It forces big burners of oil and coal in Europe to pay for some of their pollution.
MARK NICHOLLS: Power stations, steel works, cement plants a whole range of facilities that emit carbon dioxide, has to factor in the price of the pollution they're causing, the price of their contribution to climate change.
This is the cap-and-trade system at work. Thousands of companies across Europe have had their emissions of heat-trapping gases capped. If they want to pollute more, they have to buy more allowances. If they've cut their pollution, they can sell their surplus permits. One allowance gives the owner the right to emit one ton of polluting carbon gas. Business is brisk, says Patrick Birley who runs the European Climate Exchange.
PATRICK BIRLEY: We traded 95 million tons on 2005. This year we will trade something in excess of 6 billion tons. So the market is growing at a phenomenal rate. And over time will continue to grow at an even greater rate, I think.
A key to that growth can be found here, in the Canary Wharf headquarters of Citibank. Some of the world's biggest banks have piled into carbon trading, Citi among them. Buying allowances when they think the price will go up. Selling them when they expect a fall. Garth Edwards is Citi's chief carbon trader.
GARTH EDWARDS: I'm a trader so the first requirement is to deliver some results. Those results are financial first and foremost.
BEARD: You can earn as much doing this -- can you -- as you would in currency or bond dealing?
EDWARDS: The answer is basically, yes. This is not some kind of charity operation.
Nevertheless, Garth and his team do seem to believe in what they're doing.
EDWARDS: You will find among people involved in emissions trading that they like that the ultimate objective of what they're doing is to deliver emission reductions and that that's a good thing.
BEARD: I bet you don't drive an electric car, tho' Garth.
EDWARDS: I have a bicycle and that's it.
BEARD: What about your colleagues? No Porsches or Ferraris?
EDWARDS: Most of the trading floor out there have bicycles, probably more for fitness than for any ethical reasons though, but that's the way it is.
Some environmentalists feel there's nothing ethical at all about carbon trading.
This group, dressed up as well-heeled gamblers, staged a protest outside a carbon-trading exchange. They set up a roulette wheel on the sidewalk. Their message: emissions trading is just another money-making game for the banks. Charlie Kronick of Greenpeace also takes a dim view of carbon trading.
CHARLIE KRONICK: What that has done probably better than anything else is generate a lot of profits for carbon traders and a lot of transaction costs. What it hasn't done is significantly reduced emissions from high carbon infrastructure.
The International Energy Agency says there has been a sharp fall in carbon pollution over the past year but the bulk of that decline -- 75 percent -- was due to the recession. Supporters of carbon trading say it will, in the end, prove the best way of cutting the gases. But opponents say it's a con trick designed to convince us we can tackle climate change, without any pain.
In London, this is Stephen Beard for Marketplace.