When greed is green it’s good
Bankers’ growing interest in environment-friendly financial opportunities can only be a good thing – whatever their motivation.
Green has always been the favourite colour of bankers, so it is hardly surprising that the incorporation of environmental externalities into the framework of financial markets has helped to make the environment a preferred area of interest for bankers today.
Bankers active in the red-hot green markets such as carbon trading, emission credits and renewable energy are unashamedly talking about their enthusiasm for these essentially environmental efforts in terms of "arbitrage opportunities" and "PR value" but the amoral nature of their motivations is unimportant.
What is important is that the experiment of internalizing environmental externalities through the creation of markets is off to a promising start and that incentives for change are taking root in the financial system, from where they can spread to other areas of the economy.
Rather than being seen as a costly drag on Europe’s economy that other major economies can take advantage of by avoiding, Europe’s lead in the creation of these markets through its emissions trading scheme is increasingly being seen by bankers, if not yet by factory owners and politicians, as an advantage.