Bringing carbon buyers and sellers to market

Governor Schwarzenegger's State of the State speech emphasized his commitment to reducing greenhouse gases. His recent executive order to begin implementation of a market-based compliance program encouraging businesses to reduce greenhouse gas emissions is clearly a step in the right direction toward cleaning our air of harmful carbon particulates. The next step is to make it financially attractive enough for businesses to comply with the program.

Ask any inventor: Thinking up a workable idea is one thing. Marketing it in a meaningful way is another. It's the difference between, say, having the blueprints for the internal combustion engine and an assembly line ready to roll out a fleet of Model Ts.

The carbon market is in a similar situation. We know that sustainable forestry can help lower atmospheric carbon levels, a stated goal for those concerned with global climate change. Well-managed forests flush with rapidly growing trees remove or "sequester" carbon quite efficiently. But we don't know yet whether markets can be established in this country to provide any economic incentive to do so.

Read More