At the Carbon Trading Conference in New York City on June 25, 2008 (an event cohosted by Sonnenschein), Bart Chilton, commissioner of the Commodity Futures Trading Commission, projected the potential size of the carbon market could be $200 billion, which would translate to a $2 trillion futures market in the near future. Commissioner Chilton’s projections were slightly higher than those given to a City of Chicago conference on June 17 by Ken Newcombe of Goldman Sachs. Based upon the size of the carbon dioxide emissions to be regulated under the proposed Lieberman-Warner Bill (slightly less than 6 billion tons per year), he projected the value would be recognized under that bill to be in excess of $100 billion. Many industries would not be allocated enough credits while other sectors of the economy would want to sell their credits for any number of reasons, including to support research.
The total value of the allotments may vary greatly depending upon the quantity of emission offset credits being allowed which are the tradable units under the bill for compliance. At the Chicago conference, Resources for the Future quoted projected costs ranging from $11 per ton to $77 per ton, based upon the availability of offsets for compliance purposes. If there were no offsets available, the estimated price is at the high end. If offsets are generally available, the price would be at the bottom of this range. Thus, the availability of offsets could likely affect the price point of carbon under legislation similar to Lieberman-Warner.