Why carbon trading?

I started reading for an essay in one of my modules that is supposed to answer the question why carbon trading has become the policy instrument of choice in global climate policy (I chose this topic out of a list of proposals) and discovered quite a number of interesting things – the nice little details about people first helping to set up carbon trading schemes for UN organisations and then making their money in carbon trading business, but also some deeper facts I wasn’t fully aware of:

The story of cap and trade – nice clip explaining some of the problems around carbon trading

One of those is the extent to which the ‘flexible mechanisms’ emissions trading, joint implementation and clean development mechanism were only introduced into the Kyoto protocol replying to pressures from the Clinton administration – the EU comission didn’t even mention any of those in its pre-Kyoto papers and developing countries are reported to have actively opposed them until the very end of the negotiations. The EU ‘leadership role’ in carbon trading was only forged after Kyoto, when it was already clear the US were not going to comply to the agreement their government had shaped so much. In fact, in the beginning of the 90ies, carbon tax models were a much more favoured option of EU climate policies.

Another interesting point is the shift in positions of some big transnational corporations in the run-up to Kyoto that was certainly linked to the new stance of the Clinton Administration (the US government didn’t give up general opposition to binding emission reduction targets until shortly before the summit). Quite a number of papers refer to a speech by the CEO of british pertroleum at Stanford university in 1997 to illustrate this move. He held another speech in Berlin the same year that I haven’t found yet but that seems highly interesting to me because it seems to be where he first announced the BP-internal emissions trading system that was set in place and reportedly served as a model for the European trading scheme EU ETS.

And one of the most interesting papers I read today was one that proposed a “neo-Gramscian” approach (the neo refers to leaving away all the part about getting rid of capitalist domination and exploitation structures, I believe) to understand the moves of oil and car companies in global climate policy – from questioning the scientific facts and funding ‘climate sceptics’ over whining about the costs of emission reductions to ‘going green’ by investing in renewable energies and support market-based climate treaties. It basically describes this as the reconfiguration of a dominant bloc that integrates part of its critiques to leave the central power structures untouched. One of the next articles I am going to read for that module is about the economic drivers of climate policies and has got section headings as ‘creating new commodities’, ‘new places of accumulation’ and alike. This is getting really exciting…

And by the way: I admittedly started reading a publication of the movement organisation Carbon Trade Watch but the rest was pretty much academic research – so there is people out there doing that kind of stuff!


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