The danger now is that governments are seduced into believing the initial success of the carbon market allows them to avoid hard political choices on climate change. But markets are unpredictable, says Burke, and can only be part of the solution if regulated by laws such as a ban on new coal-fired power stations and guaranteed prices for renewable electricity. In other words, the politicians need to go to the casino and cut a deal with the money men.
Another danger of making a market in carbon emissions is the least discussed, but perhaps the most important: only a minority of emissions are covered by legal caps. Most industrial and transport emissions in developing countries remain outside the market. So too do most of the huge emissions caused by deforestation, draining wetlands and ploughing fields.
What that means is that market solutions to carbon emissions risk displacing the problem to activities and places where nobody is counting, and there are no penalties. Most obviously, companies facing limits at home can simply relocate their polluting processes to developing countries where there are no emissions targets. The steel and aluminium industries are already doing this. In November 2007, Ian Rodgers, director of the trade association UK Steel, warned that European carbon pricing "is not going to curb emissions. It will just move the emissions elsewhere".
Just as insidiously, it now makes market sense to cut your emissions in ways that cause much larger emissions from natural ecosystems. You can gain carbon credits for burning biofuels in Europe, even if the crops from which they are produced are grown in fields created by draining peat swamps or cutting down forests. For some hydroelectric schemes, gains are more than outweighed by the methane bubbling up from vegetation rotting in the reservoirs behind the dams.
One answer might be "full carbon accounting", in which all exchanges of greenhouse gases - both into and out of the atmosphere - would have to be included in national and corporate carbon accounts. Remote sensing may soon make this possible.
The danger for now is that carbon capitalism becomes disconnected from the reality of the planet's carbon cycle. If that happens, we face an environmental version of the Enron saga. The giant Texan energy corporation prospered through the 1990s by keeping many of its transactions "off the books". The company appeared wealthy while hiding a mountain of debt. Eventually, someone blew the whistle and the company collapsed. The same thing could happen with carbon capitalism, if big reductions in carbon emissions continue to appear on the books while increases always stay off them.
With Enron, it was the shareholders who suffered. But if the atmosphere continues to be filled with greenhouse gases and the planet's climate crashes as Enron did, no one will be spared.