'Offsetting' Crisis? - Climate Change Cap and Trade Need Not Contribute to Another Financial Meltdown
Victor Byers Flatt
UNC Chapel Hill School of Law; University of Houston Global Energy Management Institute
February 1, 2012
Pepperdine Law Review, Vol. 39, No. 619, 2012
UNC Legal Studies Research Paper No. 2042639
In 2009, the promise of a comprehensive federal cap and trade bill to address climate change fell apart. At least in part, this was due to the fears that exotic 'carbon' financial instruments might cause more financial crises. As California launches it economy wide carbon trading system, and other regional systems and the even possibly the EPA consider cap and trade, it is important to revisit what, if anything, about carbon denominated financial instruments might lead to financial market problems. The most problematic of the instruments, offsets, can be designed to lessen financial risk from underlying asset failure.
Number of Pages in PDF File: 26
Keywords: carbon trading, greenhouse gases, climate change, AB32, cap and trade, offsets, environment, environmental justice, environmental law, offsets, financial crisis, commodity, commodity trading
JEL Classification: D44, D61, D63, G12, G14, G18, H11, H23, K22, K23, K32, L51, M21, O13, Q20, Q4, Q40Accepted Paper Series
Date posted: April 19, 2012
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