The Ecologist

 
Stock market
Plans for an expanded global trading scheme could lead to a 'sub-prime' style financial collapse in confidence in the market
More articles about
Related Articles

Carbon trading is a dangerous obsession, says report

Ecologist

November 5th, 2009

Carbon trading schemes are allowing speculators to grow rich but are not delivering the emissions cuts promised, says Friends of the Earth

The buying and selling of carbon credits, the right to emit carbon dioxide, is not delivering the emission cuts promised, says a report from Friends of the Earth.

The trade in carbon permits and credits, mainly based in Europe, was worth $126 billion in 2008 and is predicted to balloon to $3.1 trillion by 2020 if a global carbon market takes off.

But instead of being a trade between polluting industries it has become one dominated by banks and speculators making big profits, says the report.

Speculation


Friends of the Earth says this speculation and complexity has left the carbon trade exposed to 'high risk'. The group worries that plans for an expanded global trading scheme could at some point lead to a 'sub-prime'-style collapse of confidence in the market.

'When you buy a carbon credit on the open market there is almost no way of knowing if any carbon has been reduced as a result,' said Iain Thom, from the Carbon Accountability Programme.

'Accountability and traceability is key to public confidence any environmental claims, and the current carbon market lacks both,'

Carbon taxes


Friends of the Earth said that instead of carbon trading and offsetting, governments should use simpler tools like carbon taxes and major public investment in green technology to reduce emissions.

'Carbon trading is failing dismally at reducing emissions, yet allows speculators to grow rich from the climate crisis and hands politicians and industry a get-out clause for polluting business as usual,' said Friends of the Earth's international climate campaigner and author of the report, Sarah Jayne-Clifton.

'The credit crunch has taught us that governments, not markets, are best placed to safeguard our future - at this critical point in the fight against climate change Ministers must step in and lead the way with a new, direct approach to tackling carbon emissions to create a safe and green future for us all.'

Emission cuts too weak

The critical analysis of the carbon trading market comes as other environmental groups warned that current emission reduction targets were inadequate for a carbon market to be successful.

Greenpeace, WWF and Germanwatch said the markets would not provide the necessary finance to help developing countries adapt to climate change.

'Industrialised countries claim that carbon markets will deliver the missing numbers on finance but their pathetically low targets will
generate nothing like the amount needed to help developing countries shift to a low carbon economy,' said Kaisa Kosonen, Climate Policy Advisor, Greenpeace International. 'It is clear that carbon offsets are no substitute for new and additional public finance.'

Useful links

Friends of the Earth report: 'A dangerous obsession'

  READ MORE...
NEWS
Carbon markets not working, says Deutsche Bank
Carbon markets are not working and UK and US government policy is not encouraging investment in renewable energy, says a leading bank
COMMENT
Pricing the tonne of carbon that tips us into climate catastrophe
In this brilliant winning entry of the Ecologist essay competition, Janine Morley imagines what it would be like to buy that fateful tonne of carbon from a telephone broker...
NEWS
Europe's failing carbon emissions trading system
Europe's carbon trading scheme is making big windfall profits for industry but not reducing carbon emissions a new report says
NEWS ANALYSIS
Personal carbon trading: the next step in tackling carbon emissions?
A report published by the IPPR next week will say personal carbon trading may be the next step in tackling climate change
COMMENT
Copenhagen and the carbon conundrum
It's too late to create an entirely new global climate framework, argues Felicia Jackson. We need to put a price on carbon to reflect its true cost, and Copenhagen, while flawed, is our best hope

 

Previous Articles...

ECOLOGIST COOKIES

Using this website means you agree to us using simple cookies.

More information here...

 

FOLLOW
THE ECOLOGIST