Goldman Sachs: Cap & Trade Alone Won't Do the Trick

The head of Goldman Sach's US carbon trading desk said that capping and trading carbon emissions by itself will not be enough to fight global warming pollution.

Reuters reported that Ken Newcombe, head of the bank's carbon desk, had this to say at a policy forum in New York:

I'm not at all convinced from what we've seen internationally that a cap and trade regime and a price on carbon is going to motivate investment in truly transformational technologies.

He urged other measures be taken as well:

Government research and development budgets should also be boosted to complement cap and trade's potential to spur innovations and investments in carbon-cutting techniques.

Banks like Goldman have started trading in international carbon credits to place themselves ahead of the curve. Newcombe predicted that "a remarkable transformation is about to take place," and that the US could be a big buyer of carbon credits globally. In the utility sector alone, there are ten power plants operating that each emit 1 billion tons of carbon dioxide annually. Newcombe said

The U.S. in 10 utilities alone, matches the scale of a relatively mature, although emerging global carbon market.

Trading in carbon credits almost doubled in 2007 over the previous year, reaching a value of almost $60 billion. The trade is centered in Europe.

• ‹ previous
• up
• next ›