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The article discusses carbon-emissions trading. Market forces and the environment are not always in harmony, but a new venture, announced on September 7th, may help lessen the discord. The European Climate Exchange (ECX), formed in an agreement between the Chicago Climate Exchange (CCX) and London's International Petroleum Exchange (IPE), will offer European companies a place to trade emissions credits for greenhouse gases. Regulation has spurred the creation of the ECX. Next January, the European Union will put into effect new rules designed to curb carbon-dioxide emissions, which contribute to global warming. Companies in the EU's 25 member states will be allowed to emit a certain amount. If they go over, they can buy credits from companies that have stayed within their limits. The ECX plans to offer trading in emissions-credit futures by the end of this year, with cash products to follow soon afterwards. In anticipation of this scheme, forward trading has already begun, though not on the ECX. Nine European brokerage houses already facilitate over-the-counter trades. Evolution Markets, one such firm, estimates that the volume traded has risen from 25,000 tonnes of carbon dioxide in January to 600,000 in July. The American market has not had Europe's regulatory shove: the United States, unlike Europe, did not sign the Kyoto agreement on climate change and is not forcing companies to limit emissions.

The article discusses the environmental movement around the world. In America, greens have suffered a string of defeats on high-profile issues. Europe's green groups, while politically stronger, are also starting to lose their way intellectually. A sensible green analysis of nuclear power would weigh its (very high) economic costs and (fairly low) safety risks against the important benefit of generating electricity with no greenhouse-gas emissions. The coming into force of the United Nations's Kyoto protocol on climate change might seem a victory for Europe's greens, but it actually masks a larger failure. The most promising aspect of the treaty--its innovative use of market-based instruments such as carbon-emissions trading--was resisted tooth and nail by Europe's greens. If environmental groups continue to reject pragmatic solutions and instead drift toward Utopian visions of the future, they will lose the battle of ideas. Rachel Carson, the crusading journalist who inspired greens in the 1950s and 1960s, is joining hands with Adam Smith, the hero of free-marketeers.