Editor's Letter: Market Manipulation

When the founding fathers of the New York Stock Exchange (and, yes, they were all men) gathered under a buttonwood tree on Wall Street, in lower Manhattan, 216 years ago, they could not have imagined that their efforts would help create businesses such as Google or Apple or General Electric. Or that their handiwork would lead to a worldwide obsession with stock prices.

Today, another global market is being born, with a cadre of visionaries at its core. These founders -- women as well as men, with a healthy proportion coming from a single academic institution, Yale University -- realize exactly the scale of what they're trying to do: They hope to save the planet.

Staff writer Anya Kamenetz, herself a Yale grad, went out to San Francisco several months ago to cover a conference on the nascent carbon-credit market. On hand were do-good nonprofits and gimlet-eyed hedge-fund managers, representatives from the World Bank, and corporate execs. The carbon-credit market, promoted as a way to slow global warming, already measures in the tens of billions of dollars and is expanding at a breakneck pace.

Kamenetz was struck not just by the amount of money involved -- the U.S. carbon market alone is projected to reach $1 trillion by 2020 -- but also by the preponderance of fellow Yale alumni. The university's School of Forestry & Environmental Studies, she learned, now has a Center for Business and the Environment; graduates are less interested in being forest rangers than power brokers using the markets to solve an environmental crisis.

The problem, as Kamenetz reports in "Carbon Boom," beginning on page 108, is that the notion that a carbon market can save the planet is unproven. Almost none of the accomplished, intellectual eco-pioneers she spoke with are quite convinced carbon trading will curb global warming. Yet that has not slowed the momentum of this market, as people line up to get their share of what is already a lucrative money machine. The only surefire greening is of personal bank accounts and corporate-income statements.

The eco-Yalies do agree that carbon markets are the best hope for a global community that is fractured and without leadership. But if that hope proves to be a mirage, both time and resources will have been wasted. And some of the best minds of a generation may be polluted by greed in the process.

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