Via Kevin Drum, via Kate Sheppard, the Wall Street Journal has reported on an interesting new development:

Three of Wall Street’s biggest investment banks are set to announce today that they are imposing new environmental standards that will make it harder for companies to get financing to build coal-fired power plants in the U.S.

Citigroup Inc., J.P. Morgan Chase & Co. and Morgan Stanley say they have concluded that the U.S. government will cap greenhouse-gas emissions from power plants sometime in the next few years. The banks will require utilities seeking financing for plants before then to prove the plants will be economically viable even under potentially stringent federal caps on carbon dioxide, the main man-made greenhouse gas.

There’s much more in the article. But it goes to show how effective a cap and trade system can be—even before it actually exists! The point of a predictable carbon cap is that it sends a clear signal through the economy, and then the economy responds in all sorts of dynamic and positive ways. Good stuff.