The people who run the finance industry are extremely smart. Says so on the label. That's how they were able to convince the government to make good on their gambling debts, though if they were a little smarter, they might have remembered that the house always wins.
They've created speculative bubbles in recent decades (and more than one had to be bailed out) over commodities like silver, unsecured loans, real estate, dotcom firms whose business plans hinged on sock puppet sales, real estate ... well, you get the picture. On to the next big thing.
That thing might well be carbon markets. Turns out, the companies that hold most of the current derivative risk will be able to make ridiculous, unsupervised bets sell dizzyingly complex derivatives against carbon offsets, too. Though no worries, the price of failure would only be the absence of a price signal that will push atmospheric carbon levels down, hastening catastrophic global climate disruption. No big:
... Well, Waxman-Markey had some good language regulating carbon and other energy derivatives.
... However, in the 300 pages of amendments added to Waxman-Markey just after 3.a.m on the night the bill passed, a few new sentences materialized that placed a big asterisk on those safeguards. The final text now says that the sections of the bill regulating carbon derivatives will be overridden by any derivatives legislation that the House passes later in the year. ...
