Permits to emit greenhouse gases could be the hottest new commodity among city traders, speculators and investment bankers - if only someone knew what they were worth.
A swelling carbon investing community gathered in Copenhagen this week to trade analysis, gossip and most importantly carbon credits - the rights to emit a tonne of greenhouse gases which policymakers are turning to in an effort to curb global warming.
The price of such permits is not purely of market interest - the higher the carbon price, the more expensive it is to burn fossil fuels, raising electricity prices for everybody, and some say harming economic competitiveness of affected countries.
The theory behind carbon markets is easy: give companies and countries tough emissions limits, but shave costs by allowing them to pay someone else to make the cuts, where this works out cheaper, thus spawning a trade in permits.
In practice it seems anyone's guess what permits will be worth over the next five years, partly because of their novelty.
"Closer to zero than a hundred euros," said Fortis Bank's Kris Voorspools, making a "mid-range" estimate of €20 for permits traded from next year in a European market.
Other analysts at the conference gave estimates for European Union allowances (EUAs) over the next two years ranging from 20 to 40 euros. One EUA accounts for one tonne of carbon dioxide (CO2) emissions.
The EU is the hub of a growing global permits market which also includes carbon credits traded under the international Kyoto Protocol on global warming, and an unregulated market of carbon offsets for consumers with guilty consciences.
One forecasting problem is that the EU, Kyoto and voluntary offset markets all overlap, making the supply and demand of credits difficult to predict.
"You're seeing price discovery on a global level. It's tough to judge," said Andrew Ertel, president of Evolution Markets.
Delegates disagreed, for example, whether there would be an over or under-supply of Kyoto carbon credits, which rich countries get by funding emissions cuts in poor countries.
Such projects must pass a UN approval process, and some of those have been given the go-ahead but then delivered fewer emissions cuts than forecast, contributing to uncertainty.
Another forecasting problem is that industry need for carbon emissions permits depends on the price of fossil fuels like coal, oil and gas - the higher the gas price the more economic it is to burn higher carbon coal, raising demand.
"We're facing a world of dear gas prices and CO2 prices of €40 to €50," said Ecofin's Chris Rowland.
EUAs for delivery next year were trading at around €15.5 early yesterday.
The Copenhagen conference, organised by analysts PointCarbon, was attended by 1,600 delegates from over 70 countries, with Europe, the United States, Japan, India and China best represented.
Many delegates were newcomers to the ballooning market, which more than doubled in value to over €20 billion last year according to PointCarbon.
"Wherever there's an emerging market there are opportunities," said one New York-based investor delegate, whose interest was just eight months old and who declined to be named. "We like niche opportunities."
The United States pulled out of the Kyoto Protocol in 2001, but investor interest there has risen after a power shift in the US Congress last autumn, adding to the growing appetite.
"The traditional private equity firms are starting to get interested," said Martin Whittaker, a director at clean energy investor MissionPoint Capital Partners.
Some see the risk of a bubble developing, which would also have potential carbon price impacts.
"In the medium-term I can see growth in the money available exceeding the places to invest," said EDF Trading's Francois Joubert.
"That may not necessarily cause a price crash. It could cause bankruptcies which would push prices up."