Carbon trading not best green option

Salt Funds Management plans to start a listed fund that will enable “Mom and Pop” investors to participate in trading carbon credits.

The fund will “use swaps, futures and other derivatives to get exposure to those markets”.

This announcement reinforces my belief that carbon trading will lead to tears from those who succumb to yet another round of irrational exuberance.

Rich speculators will hype up the price of carbon credits by distorting the market with derivative trading and eventually Mom and Pop will lose their shirts in the crash, just as they did with finance companies and the tech bubble.

Meanwhile, others will have salted away their profits in trusts and tax havens.

Carbon trading is being promoted as a green investment, but so far it has been anything but.

John Key’s National government bought carbon credits for millions of dollars, which could have been used to start protecting New Zealand from the effects of climate change.

I nstead, our emissions increased during his tenure, making it that much harder for us to eventually meet internationally agreed targets.

It seems to me that carbon taxes would be a surer, simpler and more effective way to encourage everyone to reduce emissions. STEPHEN PALMER

Whanganui