Is it time to bank on the value of ... thin air?

Nov 01, 2008 | 11:56 AM |

Richard L. Sandor doesn't lack ambition. While U.S. financial exchanges are pushing into new areas like steel futures, often in the face of industry resistance, the founder of the world's first exchange to trade climate products clearly thinks the sky's the limit.

"Why not endangered species?" he said when asked what kinds of products could be traded on exchanges in the future. "Look at anything economists have traditionally called public goods and that seemingly could not be traded. Air, water ... why shouldn't the commodities that make life possible be rationed?"

Take a step back. Sandor isn't suggesting that polar bears and orangutans be listed alongside oil on the New York Mercantile Exchange. Neither is he envisaging a world in which consumers would have to line up for a daily allowance of oxygen. The starting point for Sandor's vision is the idea of scarcity, and theories about how to put an accurate value on the essentials of life.....