The socialists yell at climate rallies: ''Carbon trading is a crime!''
To be honest, they have plenty to be wary of and they're not the only ones concerned.
As the journalist Matt Taibbi wrote last year in his celebratedRolling Stone piece on Wall Street titan Goldman Sachs, the next bubble may well be carbon credits: ''a booming trillion-dollar market that barely even exists yet … a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: if the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.''
A rigged carbon market would be a worry if a carbon emissions trading scheme was likely to be introduced in either the US or Australia any time soon.
That's hardly likely. Right now we can feel a bit sorry for the guys on the carbon desks at Australian banks and brokerages. Besides permits under a few state schemes, and bargain-basement renewable energy certificates, they have nothing to trade.
Utilities, hedge funds, brokers, banks were all poised, ready to ramp up to trade in Australian emissions units - created under the carbon pollution reduction scheme - and their derivatives. The market has a potential value of up to $10 billion, assuming units permitting 450 megatonnes of carbon emissions, issued at a market value of say $21 each, would be issued in the first year. Based on Australian Financial Markets Association figures, carbon credits worth only $350 million were traded in 2008-09.
Some units were traded early on, at prices linked to the international carbon price, until May when the Federal Government announced it would set an arbitrary price of $10 a tonne in the first year of its scheme. Trading stopped - things were too uncertain.
Ever since it's been wait and see as the scheme and Copenhagen negotiations turned into real nail-biters. What would the politicians come up with?
As it happened, nothing. Bloomberg reported earlier this month that the inability of government leaders to agree on stricter pollution controls in Copenhagen was showing up in commodity markets, meaning ''it's getting cheaper to emit greenhouse gasses''.
The international carbon price - the price of a certified emissions reduction unit, a security created under the Kyoto Protocol's Clean Development Mechanism and quoted on the European Climate Exchange in euros per tonne of carbon abated - slumped by 10 per cent to less than €14 ($22) after Copenhagen.
That slump broke a three-year correlation with the oil price. Oil and carbon prices rose before the financial crisis, and fell during the subsequent recession. But oil has risen again while carbon prices - determined largely by demand from European polluters liable under the European scheme - have stayed low because the European Union has (again) issued too many carbon permits, given the economic conditions, and allocations are locked in until a third phase of its scheme begins in 2013.
''People will gradually start to leave carbon desks,'' the head of climate change and carbon finance at a British law firm told The Guardian this week. ''We are beginning to see that already. We are seeing a freeze in banks' recruitment plans for the carbon market. It's not clear at what point this will turn into a cull or a rout.''
Westpac, The Guardian reported, had deferred plans to expand its London carbon desk. The bank put out its own spin saying the business was always intended to grow organically.
In Australia there is no downsizing yet, although coincidentally after the Royal Bank of Scotland Sempra commodities business was put up for sale, respected trader Craig McBurnie, who last year was chairman of the Australian Financial Markets Association's carbon committee, resigned.
McBurnie still believes carbon trading is a growth area but he has to consider a scenario that ''was not even on my radar 12 months ago: a complete collapse in the whole global approach to co-ordinated action. If that's the case then Australian governments of either persuasion are unlikely to be taking emissions reductions targets or strategies forward at any great speed.''
Our carbon traders are stuck in neutral, if not reverse, and that's a reflection of the political situation.
Gary Cox is environmental derivatives manager at brokerage Newedge Australia. He is one of those traders who could profit from a carbon emissions trading scheme, but he is hardly talking it up.
''I have to say to you the jury is out as to whether we're going to have an ETS in the shape it's in, if at all,'' he says.
''Quite frankly it's going to be a very difficult sell, particularly in light of the fact that Copenhagen has provided no support for the CPRS.''
After visiting colleagues in Chicago late last year, Cox believes there is little chance of a US scheme this year either. President Barack Obama's priorities are clearly going to jobs and healthcare. ''If you think they're going to start shoving through an ETS, well, best of luck,'' Cox says.
So what if the carbon trade languishes? If the main advantage of the scheme is that it lets Australia buy cheap, suspect carbon credits overseas as an alternative to real action on climate change at home, we're better off without it.
The complex and opaque carbon market creates fertile ground for scams - last year Europol busted a €5 billion-plus ''Carousel fraud'' perpetrated by tax-dodging crime gangs using a loophole in European Union regulations.
It's the sort of thing that leads many - from ExxonMobil to the Australia Institute - to prefer a straight-up carbon tax. If the Government's going to wear the scare campaign, they may as well adopt the policy.