The Catholic Register: Markets enter carbon trading business, as Catholic teaching stresses common good

By Michael Swan
8/28/2007

The Catholic Register (www.catholicregister.org)

TORONTO, Canada (The Catholic Register) – If capitalism can save the planet, it’s running out of time in Canada where market-based approaches to greenhouse gas reduction have yet to be tried.

For the most part, Canada’s capitalists are anxious to enter the carbon trading business, but so far Ottawa has failed to institute regulations necessary to create a market for CO2 reductions. The Montreal, Toronto and Winnipeg stock exchanges have each proposed cap-and-trade systems which would allow big smokestack companies to sell credits for reductions they make in carbon emissions.

The Montreal derivatives exchange has gone so far as to sign a letter of intent in 2005 with the Chicago Climate Exchange to create the Montreal Climate Exchange. But the MX is still waiting on a plan from Ottawa for Canadian compliance with the Kyoto Protocol.

The absence of an exchange which prices in the cost of pollution distorts the markets, in the sense that the real cost of industry isn’t accounted for. Environmental degradation becomes what economists call a negative externality.

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