Water cap and trade
Just did an interesting interview with Neil Eckert, the CEO of Climate Exchange PLC.
They’re the private company that owns the European Climate Exchange, which does 95% of the trading in EU carbon permits and CERs, and the Chicago Climate Exchange, which does all the existing carbon trading in the US. It also owns the only carbon exchange in China, and has pilot projects in India and Australia.
So in other words, they completely dominate a global market that is about to boom. Smart fellows.
One thing he mentioned that interested me is that the company is currently doing a pilot scheme to introduce a cap and trade market at the Great Lakes for water.
Eckert said: ‘Trading water is not that difficult. You cap extraction rights for a source, such as the Great Lakes, and then allow the main extractors to trade quotas among themselves.”
He expects an international water trading market to grow up: ‘If water becomes more and more scarce, people are going to be pumping it over long distances, like oil. The Middle East, in particular, could be a big buyer of water rights.’
As it happens, the Economist suggested using cap and trade for water in its latest issue. Synchronicity or what.