The McKinsey Quarterly trumpets that “a new regulatory environment for greenhouse gas emissions could hold good news for banks.” They bandy about figures such as “trading volume could grow to €2 trillion by 2020!” Banks such as Barclays and Merrill Lynch will be investing in carbon credits, which apparently will grow in value over time, which is why they would be worth the speculative risk.

Quick question: When did carbon become an asset? I thought it was a pollutant that was melting our ice caps and destabilizing our climate?

Ah, carbon isn’t the asset, it’s the right to emit carbon which will be decided by national governments in the U.K., Sudan, Burkina Faso, and Canada. The banks will invest in the right to emit pollution, which is…um…I guess an asset. If you squint.

Much of our recent economic trouble is that we imagined that we were creating value through a housing bubble and an unregulated credit glut. This approach was so wrong that most of our financial system has collapsed. But the way out is through investing in carbon “assets” that are entirely encased in an artificial market that will be run by the same federal governments now trying to run banks, insurance companies, car manufacturers and other industries?

Who can explain to me how carbon can be an “asset” with a value that will appreciate?

Better question: what real good or service will you be providing to people in 2009? There will be billions of people who want things, need help, require something of real value.

Will you be aiming to provide that, or will you be betting on assets created out of thin air?