Intrade is now giving 50:50 odds on the passage of a cap-and-trade scheme by the end of 2010. (20% for 2009). I’m not necessarily a huge believer in the wisdom of crowds, but they’ve done pretty well with election forecasting.
Note that there are some ambiguities about the “contract” being traded: “A cap and trade system for emissions trading to be established before midnight ET on 31 Dec 2010 in the United States.” Does it apply only to the passage of federal climate legislation or does it include a cap-and-trade system established by EPA under the Clean Air Act? And is it enough that the system has been authorized, or does the system have to reach some specific stage in implementation such as issuance of allowances? I’m guessing they meant that federal legislation would be passed by the critical date, but that’s not clear. Indeed, there’s even an interpretation under which this is now a sure thing: REGGI (a regional cap-and-trade system “in” the United States) is already up and running. Contract lawyers: take your marks, get set, go! (Note to colleagues: this wouldn’t make a bad exam question.)