Is the threat of speculation a reason to shun cap and trade?

Any time you have a market, there’s some opportunity for speculation. Even if the good being traded isn’t storable, there may be a futures market, so you can bet on the future price.
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For example, the fact that wheat is traded means that there’s also a wheat futures market; and because wheat can be stored, futures prices affect spot prices.
So, should fear of speculation lead us to ban trading in wheat?
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Now substitute “emission permits” for wheat. It’s exactly the same story.

From: http://krugman.blogs.nytimes.com/2009/07/21/is-the-threat-of-speculation-a-reason-to-shun-cap-and-trade/

The best defense of the use of market forces to control pollution comes from who else but Paul Krugman.