A Critical Conversation on Climate Change ... - Green Choices

lessons unlearned 105yet, maybe no one agrees yet on who owns the rights, maybe big polluters arestill being rewarded, maybe the price isn’t high enough yet, maybe there areall sorts of other problems. But at least having a price is better than havingno price, isn’t it? Emissions trading promises to make it impossible for a lot ofpeople to release greenhouse gases for free, or use the world’s carbon dump asif it had no value.Having to pay a price gives industry a new incentive to clean up and stop usingso much fossil fuel. The more allowances that industry has to pay for, the moreit will need to shift toward more effi cient, renewable and low-carbon technologies,which will direct more capital toward green energy suppliers and creativetechnology development. The result, as the EC says, is to promote ‘global innovationto combat climate change’. 146Markets in pollution allowances also spurs innovation by providing polluterswith incentives to compete to do even better than they are required to do bylaw. Sure, conventional regulation can force the private sector to improve technology.But trading encourages even more change, since companies can makemoney by ‘overshooting’ the minimum requirement and selling the resultingcredits to fi rms less willing or able to reduce emissions or banking them for theirown future use. 147 How can emissions trading be slowing down action on globalwarming?There are all sorts of problems with this argument. But let’s start withthe idea that giving carbon a price is a royal road to structural changein energy use.You’re right that prices can provide incentives for change. In fact,there are plenty of ways that, under better regulatory systems, pricescould lead to more efficient uses of energy without carbon tradingschemes. This is particularly true in highly energy-wasteful countriessuch as the US. Indeed, according to many analysts, even after acentury of entrenchment of carbon-intensive technologies in the US,non-carbon or reduced-carbon energy generally lowers costs ratherthan raising them, for corporations, consumers and countries alike. 148Similarly, according to the Intergovernmental Panel on ClimateChange’s (IPCC’s) conservative Working Group III, using knownand currently available technologies could reduce global greenhouseemissions below year 2000 levels by 2010 at zero net costs, with atleast half of this achievable at a profit. 149But the question here is whether emissions trading schemes, particularlyas they are currently designed, add any incentives for theparticular kinds of change most needed to combat global warming.Are they, as many governments, businesses and large environmentalNGOs claim, the ‘best option for the world to make a transition to alow-carbon economy’? 150