Lessons unlearned: Pollution trading's failures
Chapter 3 of Carbon Trading: A Critical Conversation on Climate Change, Privatisation and Power
first published 9 October 2006
Despite neoliberal slogans about the universal effectiveness of markets in dealing with social and environmental crises, carbon trading is ill-suited to addressing climate change. Many of the problems of pollution trading were already evident in the United States, where it was first tried, in the 1980s and 1990s. Chapter 3 of the book, Carbon Trading: A Critical Conversation on Climate Change, Privatisation and Power, outlines the lessons unlearned from pollution trading's failures.
Pollution trading, when applied to global warming:
- features an inegalitarian system of private pollution rights that encourages rent-seeking, inaction and conflicts over property;
- is unable to measure either emissions or offsets adequately, leading to loss of credibility and even market collapse;
- tends to impede social and technological innovation and needed structural change away from fossil fuels;
- tends to concentrate pollution in poor communities;
- includes credit-generating projects that are unable to benefit the communities they are sited in;
- is unenforceable on a global scale; and
- impedes public education and discussion about the nature of the climate problem.