<a href="http://www.gmagazine.com.au/blogs/leon#">The Business of Green</a>

The Business of Green

Money matters in the green world, by Leon Gettler.

Green jobs and the carbon market

business suit

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Carbon trading might create a whole lot of green jobs. But are they the kind of jobs we want?

In the lead up to the make or break Copenhagen summit at the end of the year, all eyes are on the carbon trading market.

Figures released by Point Carbon, the group that provides data and information about the carbon market, show that the global carbon market grew 124 per cent in terms of volume and by a healthy 22 per cent in terms of value.

That’s despite the worst economic conditions since the Great Depression. As detailed in this report here, the bad economy might actually be driving the increase in carbon trading. Prices are low but struggling industry sectors, desperate for some cash flow, are now trading surplus carbon allowances.

Analysts at Oxford Analytica expect the global carbon market to triple by 2012 with the establishment of carbon trading schemes in Australia, New Zealand and the United States and the continuation of one operating now in Europe. You would have to say that irrespective of what happens at Copenhagen, carbon trading will continue to grow.

Let’s be quite clear about this: carbon will be the world’s biggest market and people are set to make a fortune out of it. Some of them might even care about the environment.

According to the New York Times, the big four accounting firms KPMG, Ernst&Young, Deloitte Touche Tohmatsu and PricewaterhouseCoopers, are beefing up their sustainability practices to cash in on legislation recently passed in the United States seeking to curtail greenhouse gas emissions.

These accounting firms have client lists that feature some of the biggest companies in the world, and that includes big polluters like oil and gas producers, electricity generators, chemical makers and heavy manufacturers.

Two years ago, Lehman Brothers produced a paper, The Business of Climate Change (pdf here) which talked about the business opportunities that would come from, quite literally, trading out of thin air. Lehman Brothers went bankrupt last year.

Still, that won’t stop Wall Street bankers salivating at the possibility of making money from handling both ends of the cap-and-trade transactions. Some Wall Street bankers will probably come up with "green" investment products that can be sold to retail investors.

The hedge funds are getting in on it too with Switzerland-based Da Vinci Invest launching a Green Falcon Fund.

But is that the kind of green job we are after? Will carbon trading really stop climate change?

This week, former British Prime Minister Tony Blair said saving energy and forests will do more to beat climate change than carbon trading.

Blair’s report, Technology For A Low Carbon Future puts up seven climate change solutions: renewable energy standards, making industries more efficient, vehicle efficiency standards, reducing the carbon content of fuels, increasing energy efficiency of whitegoods and other appliances, and policies to stop deforestation and forest degradation.

For that matter, should we just forget about carbon trading and move to a carbon tax? It’s an issue I covered in an earlier blog here.

So what do you think? Is carbon trading the answer? Do you agree with Tony Blair that there are other solutions? What would they be?