we're next !



(snip)" Al Gore, who won the Nobel Peace Prize on Oct. 12 for his work on climate change, has championed trading as one way to curb emissions of CO2, whose molecular structure traps heat near the Earth's surface. These markets enable power companies, refineries and factories to buy and sell the right to pollute once regulators cap emissions levels. Supporters of trading point to the success of the 12-year-old U.S. market for sulfur dioxide (SO2), a primary cause of acid rain. Since this system began, SO2 emissions from power plants have dropped 41 percent below 1980 levels.

The U.S. has fallen behind Europe in trading CO2 allowances -- ``carbon,'' in trader-speak -- because U.S. President George W. Bush has opted out of the Kyoto Protocol, saying its strict limits on emissions would prove too costly to U.S. companies.

As a result, London rather than New York has become the world capital of carbon finance. As part of the Kyoto accord, the European Union created a single market for CO2 rights on Jan. 1, 2005. Trading has exploded. Last year, the carbon market worldwide grew threefold to $30 billion, according to the World Bank.

$565 Billion Market

Investors have poured about $12 billion into funds devoted to pollution, according to London-based research firm New Carbon Finance. Half of that money is managed from the British capital. In the U.S., where polluters can trade CO2 rights among themselves if they choose, California Governor Arnold Schwarzenegger is pushing to create a market that could one day dwarf Europe's. By 2020, the global carbon market could swell to $565 billion, according to estimates from Oslo-based research firm Point Carbon.

So the great carbon rush is on. In January, Morgan Stanley bought 38 percent of MGM International, a Miami-based company that invests in emissions-reduction projects, as part of a $3 billion push into the carbon market. In June, Credit Suisse Group bought 10 percent of Dublin-based EcoSecurities Group Plc and said it may lend that company 1 billion euros for pollution investments. In August, a unit of London-based hedge fund giant Man Group Plc raised $382 million for a fund specializing in greenhouse gases at Chinese coal plants. And Salt Lake City- based Blue Source LLC, a startup run by two Utah entrepreneurs, has quietly amassed the biggest bank of pollution credits in the U.S. "(snip)