'Offsetting' Crisis? - Climate Change Cap and Trade Need Not Contribute to Another Financial Meltdown

26 Pages Posted: 19 Apr 2012  

Victor Byers Flatt

University of Houston Law Center; University of North Carolina (UNC) at Chapel Hill - School of Law; University of Houston Global Energy Management Institute

Date Written: February 1, 2012

Abstract

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.

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, Q40

Suggested Citation

Flatt, Victor Byers, 'Offsetting' Crisis? - Climate Change Cap and Trade Need Not Contribute to Another Financial Meltdown (February 1, 2012). Pepperdine Law Review, Vol. 39, No. 619, 2012; UNC Legal Studies Research Paper No. 2042639. Available at SSRN: https://ssrn.com/abstract=2042639

Victor Byers Flatt (Contact Author)

University of Houston Law Center ( email )

4604 Calhoun Road
Houston, TX 77204-6060
United States
713-922-0392 (Phone)

University of North Carolina (UNC) at Chapel Hill - School of Law ( email )

Van Hecke-Wettach Hall, 160 Ridge Road
CB #3380
Chapel Hill, NC 27599-3380
United States

HOME PAGE: http://www.law.unc.edu/faculty/directory/details.aspx?cid=1022

University of Houston Global Energy Management Institute ( email )

Houston, TX 77204-6021
United States

Paper statistics

Downloads
84
Rank
246,576
Abstract Views
3,041