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Carbon Bubble

Big Money Joins Rush for Carbon, Fueling Bets Prices Will Soar

Largest U.S.-listed ETF tripled its assets this year as rising carbon prices push up the cost of pollution for companies.

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Photographer: Kevin Frayer/Getty Images 

American investors are joining a rush to buy carbon permits, prompting bets that the cost of pollution may be about to rally further after European prices hit a record high.

Total assets of the KFA Global Carbon ETF, the biggest exchange-traded fund listed in the U.S. that tracks carbon markets, have surged to almost $60 million from just $3 million six months ago. Most of the increase has come since U.S. President Joe Biden signaled after his January inauguration that climate change would be a key policy focus.