Fairer Distribution of Common Resources: the pros and cons of carbon trading

James Robertson

22nd March, 2007

'A common price for carbon' has become the soundbite of the forward-looking 'green' politician. It pleases everyone, not least business, which can plan ahead by looking at the carbon 'market'. But is it the best way to proceed?

Maybe tying our economy to ecological resources and moving away from taxation is an option we shouldn't dismiss. James Robertson, an independent economist and author, discusses the pros and cons of carbon trading.

Contraction and Convergence

Contraction and Convergence (C&C) has been around for a while. I certainly didn't invent it, but already in 1983 I was able to report (The Sane Alternative, page 41) that “the SHE (sane, humane, ecological) path of development will lead the peoples of the world’s rich and poor countries to converge around an adequate and sustainable level of material consumption" — in contrast to the HE scenario that the richest countries would continue to lead the rest along a "hyperexpansionist" path. The need for C&C is more obvious now. The question is how to implement it? By rationing particular resources, or a more general reconstruction of taxation and public spending?

Rationing schemes

A resource in the spotlight today is the capacity of the environment to absorb carbon emissions in the context of climate change. Global and national schemes to ration them have been put forward. The global scheme developed by...

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