On a February evening in the Butterfly Lounge overlooking San Francisco Bay, the jackets and ties and nametags finally came off. Attendees of the Carbon Forum America conference were sharing a nightcap and talking frankly about who will profit in the United States due to climate change. Would it be the banks, the traders, the greenhouse gas–emitting industries, or the public? A utility company employee who had already tossed back a few leaned heavily on a table, lamenting the problems with American capitalism. A CFO seeking funding for his solar venture called the carbon economy a “bunch of hot air.” And standing in small groups, as servers offered up hors d’oeuvres and glasses of wine, financiers projected the size of a possible US carbon market. With its potential to reach $1 trillion by 2020, it seems everyone wants a cut.

The drinks and blunt musings came after a long day of panel presentations, where the questions of who will win and who will lose under proposed federal global warming legislation simmered beneath reserved exchanges. The conference began with an inspired speech about the significance of launching a carbon market—one in which companies buy, sell, and trade the right to emit carbon dioxide (CO2) to reduce the amount of greenhouse gases released into the atmosphere. It’s widely believed the world must slash CO2 emissions 80 percent by 2050 to avoid the worst effects of climate change, including sea level rise, catastrophic weather, and ecosystem degradation. “You are taking part in something that really matters,” James Cameron, vice chairman of Climate Change Capital, a cleantech investment group, told the crowd. “You’re finding ways to solve a problem that, ultimately, if we are successful, will have taught us how to achieve a level of cooperation between us as humans that, perhaps, we’ve never achieved before. That is the nature of the endeavor that is involved in the global carbon market.”

Cameron, a tall, dapper Brit who wore pinstripe pastel socks and carried a fedora, received warm applause for his opening words. Next up was Nancy McFadden, senior vice president of public affairs for Pacific Gas & Electric (PG&E). “I’ll bring this down to a level maybe not so lofty ...,” she began. It was a minor jab that alluded to the countrywide tension about how the $1 trillion will be divvied up. Financiers like Cameron, companies such as PG&E whose CO2 emissions will be regulated, and environmentalists are now heatedly debating the rules for a market that could be in place as soon as next year.

With about two-thirds of states pursuing regional carbon markets and climate change legislation in the absence of a federal policy, companies fear a regulation nightmare. As a result, the business sector is demanding the government establish a nationwide policy with a single set of rules as quickly as possible. An alliance called the United States Climate Action Partnership, made up of more than two dozen major corporations including General Motors, Duke Energy, and BP America, has pledged to help “enact an environmentally effective, economically sustainable, and fair climate-change program consistent with our principles at the earliest practicable date.”