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Carbon trading isn’t working

Last week, Graciela Chichilnisky wrote that carbon trading can save a climate-change agreement. Here, Kevin Smith responds that such markets haven’t worked – and won’t in future.

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Carbon trading isn’t working, and doesn’t show any signs of improving either. The biggest experiment in carbon trading so far, the European Union Emissions Trading Scheme, has been a spectacular failure, which has not made significant emissions reductions, has absorbed enormous amounts of political will and attention and has acted as a huge subsidy for some of the biggest polluters in Europe, with a handful of energy companies making billions of Euros in profit without having to reduce their emissions.

Free-market ideologues still trumpet the virtues of carbon trading, but a host of NGOs, businesspeople and even government bodies now admit that we got it badly wrong. In the United Kingdom, the Committee on Climate Change – an independent advisory body to government – said they could not “be confident that the EU ETS will deliver the required low-carbon investments for decarbonisation of the traded sector” and recommended the use of more traditional regulatory intervention.

Outside of Europe, carbon trading has not brought “clean development” to developing countries: it has provided large profits to industrial elites, who have tended to plough those profits into expanding polluting industries. Many communities in countries where offset projects under the Clean Development Mechanism (CDM) have been carried out have suffered as a result of being evicted to make way for dams, or have had to cope with waste incinerators being built in residential areas – all in the name of providing carbon credits, so that rich countries and companies can continue polluting at will. The fixation with the CDM has also provided industrialised countries with a benevolent façade in climate-change negotiations, making a show of supposedly financing clean technologies, while conveniently ignoring the much more substantial sums that need to be paid for adaptation and technology transfer.

In April 2009, climate-change activists erected a protest camp outside the European Climate Exchange, the biggest carbon trading hub in the world, located in the financial district in London. These protesters were angry that carbon trading was actually making things worse by allowing the introduction of new carbon-intensive infrastructure in the United Kingdom, including the proposed first coal-fired power stations to be built in 30 years.

This frustration with carbon trading has been validated by a number of recent reports, which contribute to the growing critique of carbon trading. Last week at the climate-change talks in Barcelona, Spain, Friends of the Earth released “A Dangerous Obsession – The Evidence Against Carbon Trading and For Real Solutions to Avoid the Climate Crunch”, which recommends an immediate end to the expansion and interlinking of further carbon-trading schemes around the world.

But it is not only environmentalists who voice criticisms of carbon trading. A recent report from Deutsche Bank concluded that the carbon market is not likely to contribute to significantly cutting emissions “for the foreseeable future.” Billionaire businessman George Soros has also expressed scepticism, saying “The system can be gamed; that’s why financial types like me like it – because there are financial opportunities.”

The recent global financial crisis has dramatically highlighted the folly of dogmatic belief in the omnipotence of free markets. It is an ideological anachronism to promote those same free-market forces and processes of financialisation as being an effective means of bringing about the urgently needed transition to the global low-carbon economy.


Kevin Smith is a London-based researcher with Carbon Trade Watch, which is a project of the Transnational Institute.

At the end of the month,
Carbon Trade Watch will publish the book Carbon Trading: How It Works and Why It Fails (Dag Hammerskjold Foundation). It will be available to download free online.

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Default avatar
匿名 | Anonymous

白布上涂鸦,仍然是白布

或许因为这种色彩受更多人关注,又或许因为他不在代表纯洁而被理想主义唾弃,各怀野心的人开始在白布上任意涂鸦。

当一种理想主义的机制为了生存,不得不让自己置身于自由经济的体制下的时候,机制本身是更加蓬勃了还是被各种利益抑制住了呢?

或许我们可以卸去一些浮躁的不安,卸去一些愤青的急躁,再给一些适当的宽容。

无论如何,拯救与努力远比唾弃和抛弃更负责任,也更有意义。

echo

Although the white cloth has graffiti on it, it is still white

The reason for the white cloth is doodled by people with different interests of ambitions is possibily because its color concerned by more people or because its non-pure color is despised by people with ideals.

When an idealistic mechanism has to let itself in a free market economy to survive, is the mechanism becoming more vibrant or just suppressed by various interest groups?

No matter what, salvation and efforts are more responsible than disdain and abandonment, and also are more meaningful.

Default avatar
匿名 | Anonymous

一个有趣的视频

关于这个题目最近有一个视频很值得一看,由美国环境保护部官方发布,争辩碳税不应该只是限额与交易。http://www.youtube.com/watch?v=uSNQzSjb38g&feature=player_embedded
由张靓翻译

An interesting video

On this topic a recent video made by officials from the United States Environmental Protection Agency arguing for a carbon-tax rather than cap and trade is worth watching - (youtube/ Eng) http://www.youtube.com/watch?v=uSNQzSjb38g&feature=player_embedded

Default avatar
匿名 | Anonymous

需要削减而非交易碳排放

世界首脑和商人合法购买和交易碳排放和额度并非解决应对气候变化之道。假如我们把碳看作是世界自由贸易市场中的商品,我们则无法保证环境保护的透明与决心。碳排放势必将变成“台底交易”。主要污染国将会与发展中国家讨价还价,争取更多的“污染权”。发达国家必须率先坚定立场,以减少排放量。这就需要有力的能源政策,可持续的消费模式,以及更环保的生活方式。

3li4s

Emissions need to be cut not traded

Allowing world leaders and businesses to trade carbon credits or emissions is not the answer to curbing climate change. We cannot ensure transparency and commitment to environmental protection if we treat carbon as a commodity in a free-trade world market. Carbon emissions will be traded "behind closed doors" and top polluting countries will negotiate will developing countries to bargain for more "pollution rights". Developed countries need to lead the way by taking a firm stance to reduce emissions. This comes from smart energy policy, sustainable consumption patterns and adopting more eco-friendly lifestyles.

3li4s