South African author and academic Patrick Bond, writing in Monthly Review, points out some of the dangers of carbon trading as a strategy to reduce carbon emissions. He rightly says that trading doesn't prevent industries from increasing their carbon output, and in fact endorses the right to pollute.
I agree that there are risks and shortcomings in the principle and practice of carbon trading, not least being the perception that nothing else needs to change. We must shift to a low-carbon economy, and we must not wait for carbon markets to do this for us.
But I don't believe that carbon trading is meant to be the ultimate solution. It's a step along the path to righting ecological wrongs, and has succeeded in preparing economies for more rigorous measures that surely need to be implemented soon. Just what those measures will be is a matter for international negotiation and the efforts of individual governments. Carbon trading is an early strategy to help ease our way to a low-carbon future with minimum economic pain.
There are people who argue, and I don't entirely disagree with them, that there is much wrong with the global economy and its relationships with social wellbeing - issues that go well beyond pollution, waste and the exploitation of resources. Indeed, some of the arguments against carbon trading are based on the observation that the Kyoto Protocol's Clean Development Mechanism (CDM) have done nothing for communities in the developing world. These commentators would say that the economy actually needs an electric jolt, not a soothing balm; that it's time to change the game plan.
This is not so much an argument against carbon trading, however, as an argument against relying on market mechanisms to solve the world's problems.
The trouble with the carbon market is that it's a market loaded with interventions that have interfered with normal market logic. Apart from the inherent flaws in the emsissions trading concept, specific carbon markets such as the European Union's Emissions Trading System (EU-ETS) have "done nothing to curb emissions" because the market itself wasn't working as it should. The biggest problem with this scheme is that targets for heavy emitters were too easy to reach. Caps were too low, carbon too cheap and politicians too involved.
The carbon market is neither free-market capitalism, nor straightforward intervention. It's a hybrid system, and it's not yet working - but that doesn't mean it can't have a role to play in addressing climate change.
If we want a wholesale change to the economic game, we need to look beyond carbon. Debating the merits of carbon reduction strategies is like arguing about when to issue a yellow card and when to throw a player off the field, not about whether we should be playing football at all.
Ultimately, Patrick Bond believes - as do I - that really we should just leave fossil fuels where they are; but there is no practical way to do that quickly and cleanly. We are left with messy half-measures and compromises, and one can only hope that all the players will help contribute to a long-term solution that will address concerns beyond market efficiency.
[via The Antidote]