May 16, 2008 - The U.S. will be home to a $1 trillion carbon trading market by 2020 if policymakers follow through on current plans for a domestic cap-and-trade program, according to analysis firm New Carbon Finance.

The price of a ton of carbon emissions may hit $40 as soon as 2015, sparking a 20% rise in electricity bills, the report predicts.

Under a cap-and-trade system, the federal government would set limits on greenhouse gas emissions, enabling higher-emitting companies - such as cement manufacturers and other heavy industries - to buy carbon credits from companies who operate under the cap.

The report also foresees major U.S. investments in renewable energy, energy efficiency, and clean technology projects. (Another report, released in March, predicts that global markets for clean energy projects will triple within ten years.)

Download New Carbon Finance's State of the Voluntary Carbon Market report here (PDF).