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

72 development dialogue september 2006 – carbon tradingCarbon trading’s claim to be ‘efficient’ is certainly its main attraction– together with its claim to be able to stimulate change in a relativelypolitically ‘easy’ way. But to decide whether such claims are true, youneed to look carefully at specific cases. 2Trading’s ‘efficiencies’ tend to conceal a lot of ‘inefficient’ stagesetting:arranging infrastructure, working up a legal framework, andso forth. Global trade in paper pulp, for instance, becomes ‘efficient’only after subsidies or violence have gone into building roads andports; securing large-scale, contiguous areas for producing raw material;finding ways of convincing people that local land is of ‘greatereconomic value’ when under tree plantations than when treated asa commons; hiring and training police; ensuring sustained high demand;and so on. 3At the same time, trading is often a singularly inefficient way of attaininggoals that require sweeping structural changes in society, orthat place local rights before accumulation. It’s also inefficient whenthe necessary conditions for trading – measurement instruments,legal institutions and so forth – are inadequate.Where pollution trading is possible at all, it can get in the way ofachieving changes of the kind required for breaking industrialised societies’addiction to fossil fuels. Its cost savings, while often real, tendto fall only to some members of society. In addition, it can exacerbatepolitical confl ict. Pollution trading, in short, only makes harder thedifficult job of broad-based political organising required for copingwith global warming. To put it another way, the ‘efficiency’ that isfostered by trading is often not eff ective.‘Emissions trading derivesfrom economic theoryand a small amount ofempirical evidence fromUS practice, untested on aglobal scale, and certainlyuntested in the variouseconomies in which thesemechanisms must work.’ 1Ruth Greenspan Bell,Resources for theFuture, 2006Why is that?Broadly, there are five reasons, and they are what this chapter is about.First, in order to work, greenhouse gas trading has to create a specialsystem of property rights in the earth’s carbon-cycling capacity. Thissystem sets up deep political confl icts and makes effective climate actionexceedingly difficult. Second, pollution trading is a poor mechanismfor stimulating the social and technical changes needed to addressglobal warming. Third, the attempt to build new carbon-cyclingcapacity is interfering with genuine climate action. Fourth, globaltrading systems for greenhouse gases can’t work without much betterglobal enforcement regimes than are likely in the near future. Andfi f th, building a trading system reduces the political space available foreducation, movement-building and planning around the needed fairtransition away from fossil fuels.