If the forecasts are right, the carbon offset market could climb to $1 trillion by 2020, reports New Carbon Finance and that’s only in the United States (PDF) One trillion is a whole lot of money for something we can’t feel, see, weigh or taste.

And it’s nothing resembling Fool’s Gold: According to Plenty Magazine (via the US Environmental Protection Agency), one Metric tonne of CO2 could be worth somewhere between $37 and $51 by 2020. If in 2004 alone, the US emitted roughly 6 billion tonnes, simple logic indicates that huge money is at stake.

Who’ll be the big money makers, Plenty asked in a recent feature: Will it be the big banks, the traders, the offset providers, the projects, the greenhouse gas–emitters, or the public?

To answer some of those questions Plenty met with people who attended the Carbon Forum America conference and listened to their opinions. Representing different sectors –– from NGOs to utility companies –– the group met up to talk frankly about who stands to profit in the US from climate change.

Chris Busch, the program economist from the Union of Concerned Scientists (UCS) said: “We’re talking about handing out money. If you’re handing out money, everyone’s going to get in line and make arguments, which sound like principled arguments, for why they deserve to get the money.”

Businesses want cap-and-trade

Those making the loudest arguments for cap-and-trade, are businesses that will most likely be regulated—and therefore required to pay for polluting—under climate-change legislation, writes Plenty. They are pushing for cap-and-trade rules that best serve their interests, fighting over how low the cap should go, whether it could be broken under certain circumstances, and how carbon allowances should be handed out—for free, by auction, or both.

Emitters, it is worth noting, significantly influence members of Congress –– the ones designing America’s climate change policy.

Not likely American individuals will be regulated

Because of the bureaucracy costs, it’s unlikely that individuals or residences will be regulated in the United States. Rising costs of energy and products, however, will be passed onto the consumer.

Green groups: For the taxpayers and against free allowances

Some environment groups in the US are against handing out free carbon allowances and advocate carbon credit auctions in a cap-and-trade system. In such a situation, companies will purchase carbon allowances from the government by bidding against each other to a price the market will bear.

Writes Plenty:

“Environmentalists argue that an auction will help discover the price of carbon, prevent companies from lobbying politicians for extra allowances, and ensure a system that benefits the public. The funds generated from an auction, they say, should help taxpayers.

There’s a worry, however, that companies won’t invest in reductions even if they receive the allowances for free, but rather will add the value of allowances to their business costs. As a result, product prices would go up, and the profit could be passed on to shareholders.

Busch from the UCS and who supports an allowance auction, explained: “A scalper is selling Super Bowl tickets. Would you expect him to sell the tickets for less if he got them for free?”

Carbon traders look forward to their cut

According to Brian Prusnek, a VP at Climate Change Capital (a cleantech investment group), the relationship between those that emit and financial experts will be simple: “Companies that are going to be regulated are going to have to spend money to comply with regulation.

“Every penny they spend is possibly a penny or half penny for us.”

Wealth worth having?

No one who attended the Carbon Forum America conference believed that a cap-and-trade system could solve our global warming woes. Said James Cameron, also a VP at Climate Change Capital: “The carbon market will produce innovation, it will find bigger markets for technology, but it can’t be expected to do everything that’s necessary to make the transformation.

“But it’s without question the most significant policy lever we’ve got,” he added. “It does help overcome unnecessary barriers between human beings in solving the collective action problem. And it will create wealth worth having when it’s done.

::Plenty