How much is a ton of carbon worth?

The Chicago Climate Exchange (CCX) will begin to offer so-called Carbon Emission Reductions (CER). "CERs are tradable instruments, issued under the United Nations Clean Development Mechanism, for approved and verified greenhouse gas (GHG) emission reduction and sequestration projects undertaken in developing countries." That's a mouthful, but it sounds like these boil down to carbon offsets.

The primary customers will be companies who need to "hedge and manage risk from CER price fluctuations in the absence of a delivery mechanism." Translation: your company is up against emissions regulation and you haven't done anything about it.

I am optimistic about this new financial product. The market will set the price for not producing a ton of carbon. This money is a rebate off the price of clean energy.

The problem is that there is no demand for this product without regulation. Perhaps companies in Europe (where regulations are more strict) will buy offsets on the CCX, but perhaps they will just buy them on the European Climate Exchange. Commodities Now has a little bit about this.