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We May Trade Away Our Future with Cap and Trade
Carbon trading won’t stop climate change
20 April 2009 by Andrew Simms
New Scientist Magazine issue 2704.
Selling permits to emit carbon dioxide is fine in theory, but there’s a fatal flaw that means it can never avert climate catastrophe…
…In 2005 the European Union created the world’s first proper carbon market, the EU Emissions Trading Scheme (ETS), which compels highly polluting industries to buy permits to emit CO2. The number of permits is limited, so the idea is that supply and demand set a price that encourages the development of a low-carbon economy. A rising price with no wild fluctuations sends an economic signal to invest in clean energy. But it’s not working.
The price of a tonne of CO2 on …the ETS has had a roller-coaster ride – soaring one minute, plummeting the next. In the past year it has lurched from over €30 to €8, and now languishes at around €10. Disastrously, such low and unpredictable prices for CO2 remove the economic incentive to decarbonise economies.
Click here to read the rest of this important article, that has global implications.
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Andrew Simms is author of Ecological Debt: Global warming and the wealth of nations (Pluto Press), and policy director and head of the climate change programme at nef (the New Economics Foundation)
