CITIZEN POWER ALLIANCE

The twin elements of a bubble are euphoria and roguery, with the proportions varying from case to case. The coming green bubble, which is already attracting large amounts of venture capital and government money, displays both.

In the purely financial world, the business opportunity is in carbon trading, of which there are two forms. The first is the batch of global mechanisms set up under the Kyoto agreement and administered by the U.N., of which the Clean Development Mechanism (CDM) is the most important. If a country with a Kyoto target finds it too difficult or costly to reduce its CO2 emissions, it can instead buy "certified emission reductions" from developing countries (which have no such targets). "Certified" means the U.N. has to be satisfied that the reduction would not have occurred anyway and that it has not been offset by increased emissions elsewhere (if, say, it has been achieved by a factory closing down). But the system is impossible to police, and media investigations have revealed that many CDM projects are distinctly dubious.

The other form of notable innovation in this area is the E.U.'s own Emission Trading Scheme, which so far has proved a costly (and corrupt) farce by according emitters too much say over the size of emissions permits.

In the wider business world the burgeoning opportunity is seen as investment in renewable energy, for which massive government subsidies are available. The front runners tend to be biofuels for transport and wind power for electricity generation. The E.U. is still committed to increasing the use of biofuels, but it has belatedly been recognized that large-scale production of crops for fuel rather than for food is a major cause of the surge in food prices that is causing severe hardship in much of the developing world. Moreover, approximately as much carbon-based energy is used in the production of most biofuels as is saved by their use.

Wind power is little better. Hopelessly uneconomic on any substantial scale, since it requires a conventional power back-up for when the wind stops blowing, forests of wind turbines are rightly regarded in most countries as an environmental monstrosity.

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