In both U.S. climate legislation and within the global climate talks there are serious proposals to create a new carbon emissions derivatives market with big Wall Street speculators looking to cash in.
A new issue brief by IATP's Steve Suppan finds that the same regulatory loopholes that led to excessive speculation on commodity futures markets in 2007 and 2008—leading to big spikes in food and energy prices and riots in over 30 countries around the world—are also in place within proposals for a new carbon market. A poorly regulated carbon derivatives market could induce huge volatility within agriculture futures prices—ultimately affecting farmers and food security. Additionally, volatile carbon prices driven by speculators could delay investments in greenhouse gas–reducing technologies.
Watch the short video interview with Steve below to see how he breaks down the risks of proposed carbon derivatives markets.
