The failures of atmospheric commodification

"The rush to make profits out of carbon-fixing engenders another kind of colonialism." — Centre for Science and the Environment, 2000

Introduction

By now we’re all familiar with the ongoing planetary biocrisis1 and anybody who isn’t is more than scientifically illiterate. Global temperatures are predicted to potentially rise by 4°C by 2100 (University of New South Wales, 2013), with recent research warning of a 6°C rise by 2100 (Connor, 2015), a far cry from the 2°C target deemed safe by many (Hope & Pearce, 2014). The warming of the atmosphere now poses risks to the integrity of our energy systems (World Energy Council, 2014) and agriculture (Challinor et al., 2014). The world’s oceans are increasingly acidifying due to the increased atmospheric concentrations of carbon dioxide (CO2) (Mora et al., 2013), our forests are unable to absorb the excess CO2 we’re releasing (Philips & Brienen, 2015), and despite these warnings the world’s biggest fossil fuel companies continue to increase their fuel reserves, straying dangerously close to any safe emissions limit (Carrington, 2015). Even now research shows that the 1972 book Limits to Growth, previously characterised as doomsday fantasy, has recently been vindicated and that we should start to “expect the early stages of global collapse” (Turner & Alexander, 2014).

The answer to our problems seems deceptively simple: if global warming is such a danger to our (and the biosphere’s) wellbeing, then we just need to stop emitting all that carbon dioxide and other pesky greenhouse gases.2 The solution is more complex when we realise the primary inducer of climate change is the burning of fossil fuels, which have become inextricably linked with the world’s capitalist economies as they have continued to grow over the centuries (Keefer, 2006; Leigh, 2008; Lohmann & Böhm, 2012).

One of the many solutions put forward by the establishment in addressing the prevention of dangerous climate change is the idea of a carbon market, or carbon trading. This is defined innocuously by the Financial Times as “a market that is created from the trading of carbon emission allowances to encourage or help countries and companies to limit their carbon dioxide emissions” (Financial Times, 2014), or quite simply subjecting climate change to market logic via allocating property rights to carbon emissions (Newell & Paterson, 2009). Is it possible that the trading of permissions to release CO2 could help pave our way to a low-carbon future? Could the pricing of carbon, as the World Bank asserts, help to “incentivize cleaner decisions and innovation” for the global economy (World Bank, 2015)? Or alternatively, is the concept of a carbon market simply another example of neoliberal hegemony, an attempt for capitalism to enclose yet another round of commons in its attempt to profit from disaster à la Naomi Klein’s “Disaster Capitalism” (Klein, 2007)?

This essay will attempt to investigate the concepts of the carbon market, focusing on its history and origins, contemporary examples of carbon markets in the world today, and whether they succeed or fail in their goal of slowing down/preventing climate change and instituting a low-carbon, renewable-powered future. Alternatives will be considered at the end of the essay, and the success and relevancy of carbon markets will be evaluated.

The origins of carbon markets

“[T]he pollution rights scheme, it seems clear, would require far less policing than any of the others we have discussed.” — Dales, 1968, p. 97

The precursor to the idea of carbon markets, that of controlling emissions via market mechanisms, can be traced back to the 1960s where the idea of internalising the costs of pollution via taxes and property rights unsurprisingly first emerged from economists (MacKenzie, 2008; Tokar, 2014; Koch, 2014) as a supposedly cost-efficient alternative to government intervention. The first arguably successful pollution market was the sulphur dioxide (SO2) trading mechanism in the USA, established in the 1990s. This was introduced in a market-friendly attempt to reduce the SO2 emissions from coal-fired power stations in order to reduce the occurrences of acid rain (Likens & Bormann, 1974), after previous attempts to pass bills in the US congress to address the problem failed in the 1980s with “Reaganomics” and free market beliefs ascendant. The successful 10% reduction of SO2 emissions between 1995 and 2003 (Lohmann, 2010a) seemed to vindicate the idea of market environmentalism, and subsequently shaped the Clinton administration’s insistence of market mechanisms in international climate negotiations.

It was the US delegation that introduced the idea of market instruments in the 1997 Kyoto Protocol (Searles, 1998; Koch, 2014) although the helpful role of the International Emissions Trading Association (IETA) which sent almost 1,500 lobbyists to encourage the use of these mechanisms cannot be discounted (Fernandes & Girard, 2011). It was in fact Al Gore, then the US Vice President, who advised that the US would only agree to the Protocol if the “trading of ‘rights to pollute’” was implemented (as well as mandated emission reductions to be much lower) (Tokar, 2010). This helped to consolidate the idea of using markets and property rights in attempts to prevent climate change, despite the fact that as negotiations came to a close the USA refused to adopt the Protocol. Since then the design and development of carbon markets has predominantly fallen into the hands of the theorists and architects of financial markets (Lohmann, 2010b; Koch, 2014). Once these financial groups realised the potentials of this market, emissions trading “became almost unstoppable” (Newell & Paterson, 2009, p. 8).

These ideas can be better placed in a historical view of capitalist accumulation. It is another case of the state (or states) enclosing the commons, this time the atmosphere, in order to forcefully create a new market. Capitalism has attempted to make something irreducibly complex (the climate) into something easily quantifiable (a carbon price). As David Harvey states, “Creating markets where there have been none before is one of the ways in which, historically, capital has expanded” (Derbyshire, 2014). Sullivan (2009) drives the point further when he says the modern era represents a “wave of enclosure and primitive accumulation to liberate natural capital for the global market” (p. 26). Capitalism’s requirements have always required either geographical expansion, technological/financial innovation, or both (Moore, 2011). Emissions trading and carbon markets are another example of this.

Fast forward to the present day and the previously fringe belief of pollution trading is now a key part of dominant capitalist logic. Scientists and researchers frequently endorse the idea of putting a market price on carbon to help tackle global warming (e.g. Nuccitelli, 2015). Corporations experiment with internal carbon pricing in attempts to save money and reduce emissions (e.g. Hepler, 2015). The World Bank now estimates that “40 national and over 20 sub-national jurisdictions are putting a price on carbon” which accordingly represent “about 12% of the annual GHG [GreenHouse Gas] emissions” emitted (World Bank, 2014, p. 14). Carbon markets now form an integral part of an “emerging global policy framework” that also includes renewable subsidies and carbon taxes (Office of News & Communications, 2015) in an attempt to halt GHG emissions.

Contemporary developments

“We’re going to see a worldwide market, and carbon will unambiguously will be the largest non-financial commodity in the world.” — Richard Sandor (Carr, 2009)

Despite the now famous assertion of Nicholas Stern (2006) that climate change “is the greatest market failure the world has ever seen” (p. viii), it is not surprising to witness the size and scope of carbon markets in the modern era of neoliberalism, austerity, and the unassailable forces of markets. From Chile to New Zealand, California to Japan, South Africa to Kazakhstan, emissions trading or carbon pricing instruments are popular globally (World Bank, 2014), with eight new markets emerging in 2013 alone (Henbest, 2015). Leonardi (2012) references this proliferation as a sign of the “carbon trading dogma” (p. 13), the political assumption that only markets can provide a solution to climate change. Indeed, it would seem entirely logical to the capitalist hegemony that reducing carbon emissions can go hand-in-hand with economic growth, as Sweden’s Finance Minister Magdalena Andersson asserted recently (World Bank, 2015). To think otherwise would be tantamount to heresy and questions the ability of capitalism to solve hitherto intractable problems.

Carbon markets come in many forms, and it is beyond the scope of this work to go into full detail, but some brief information is required. The largest emissions trading system currently in existence is the European Union Emissions Trading Scheme, commonly abbreviated as the EU ETS or ETS, and established in 2005 (Ellerman & Buchner, 2007). It is a prime example of a cap and trade system (an excellent summary of which can be found from Lohmann, 2010a). Additionally there are “project-based” carbon offsets, where “instead of cutting their emissions industries, nations or individuals finance “carbon-saving” projects elsewhere” which are cheaper to implement (again from Lohmann, 2010a, p. 10). Under the Kyoto Protocol there are also “flexibility mechanisms” such as the Clean Development Mechanism3 (UNFCCC, 2014a) and Joint Implementation (UNFCCC, 2014b), the former being similar to cap and trade and the latter being a form of offsetting.

In 2009 Richard Sandor, the founder of the Chicago Climate Exchange, stated that “We’re going to see a worldwide market, and carbon will unambiguously will be the largest non-financial commodity in the world” (Carr, 2009). Those words are close to the truth given the growth and extent of carbon markets today. The global carbon market has doubled in size every year since 2005 with an estimated value of US$2 trillion in 2014 (Suppan, 2009) and an expected market value of US$3.1 trillion in 2020 (Friends of the Earth, 2009). In 2009 carbon markets traded over US$100 billion a year (Lohmann, 2009) and were worth €64 billion in 2014 (Smedley, 2015). The EU ETS alone had a turnover of €90 billion in 2010 (Gale, 2015), and a proposed national carbon market in China to be launched in 2016 will have an estimated annual turnover of 100 billion yuan, equivalent to roughly US$16.1 billion (Staff Reporter, 2015).

Carbon markets have widespread support amongst at least 1,000 companies and 84 governments (Marcacci, 2015a). Perhaps unsurprisingly as a locus of financial capitalism the City of London has become the focal point for carbon trading, with financial institutions opening their own trading desks exclusively for carbon markets (Bumpus & Liverman, 2008) or even acquiring their own “carbon companies” (Lohmann, 2010c, p. 6), although in recent years some banks have scaled back these efforts (Henbest, 2015). Recent efforts have focused on attempts to link up existing carbon markets. The EU and California are looking to connect their regional markets together (Zetterberg, 2012), and California has begun assisting China with carbon market design (Marcacci, 2015a). Canadian provinces are beginning preparations to join up existing cap and trade systems (McDiarmid, 2015), and carbon markets are now set to expand across the rest of North America (Marcacci, 2015b). Carbon markets are not advancing homogeneously however: efforts to reform and fix the issues inherent in the EU ETS continue (Neslen, 2015a; 2015b; Krukowska, 2015) and following Tony Abbott’s current track record of facilitating environmental degradation Australia has become the first country to repeal a carbon price (White, 2014; Henbest, 2015).

It seems then that carbon markets are here to stay. They are hegemonic both politically and economically. But as with most capitalist efforts to rectify problems, they are fraught with problems fatal for both humans and the biosphere.

The failure of atmospheric commodification

“The oil price shocks of the 1970s didn’t wean us off oil, so why should we believe that a high carbon price will wean us off carbon?” — Jim Watson (Lovell, 2007)

First, let us consider the actual attempts of carbon markets to accurately price carbon in order to prevent climate change. The prevailing logic is that a high enough carbon price, controlled by laws of supply and demand, will provide an incentive for market actors to invest in cleaner, less carbon-intense methods of production, transport, and energy generation in order to save money. “In generating a price for carbon, it is argued, an incentive is created to reduce emissions as efficiently as possible” (Bumpus & Liverman, 2008, p. 131).

A recent economic study (Lontzek et al., 2015) found that, factoring in potentially irreversible climatic “tipping points”4 the cost of carbon should be “200% higher” than it is today, with most institutions “seriously underpricing carbon dioxide” (Yeo, 2015). A “glut” of emission allowances in the EU ETS has continued to undermine any possibility of its effectiveness, with some fearing the oversupply of allowances “may grow to more than twice the size of the emissions the EU ETS covers by 2020” (Carbon Market Watch, 2015). For a country like Germany to have enough economic incentive to switch from coal power to using natural gas (not to renewables, just a “cleaner” fossil fuel) would require an EU ETS price of €43 per tonne of carbon – it is currently at €7 per tonne (Henbest, 2015). Other economic studies have proven that carbon pricing mechanisms are not enough to ensure climate change is averted and to encourage investment in renewable technologies (Waisman et al., 2014).

It is interesting to suppose that emissions trading systems have been designed badly on purpose to, as Lucia (2009) asserts, produce “an elaborate way to disguise a lack of action and transfer wealth to polluters” (p. 237). The relentless growth of carbon markets, as Chester & Rosewarne (2011) suggest, symbolises a “subterfuge for maintaining the commitment to the continued expansion of economic activity as well as creating new opportunities for wealth enhancement” (p. 27). Even a homogenous global carbon price, the same in all applications across all institutions, “cannot adequately reflect the true social costs of carbon emissions, because the market mechanism only recognizes preferences when these are backed up by purchasing power” (Storm, 2009, p. 1025). The idea of markets ushering us into a low carbon future thus seem hopeless and impossible. As market-based solutions continue to prevail, the control of our atmospheric commons will remain in “the hands of polluting corporations and big players in the financial markets” (Lohmann, 2010a, p. 2) and the countries backing the global neoliberal regime, as our faith in the “efficiency“ of markets continues to harm ourselves and the wider environment (Albritton, 1999).

Indeed, it is vital to remember that the overarching concept of carbon markets – a market mechanism being able to facilitate a desired change quicker and more efficiently than command-and-control policies via the state – is a gross misunderstanding. Neoliberalism, and markets in general, have always used violence in the form of state intervention in order to secure property rights and enforce stability, as well as quash dissent (Wall, 2005; Bumpus & Liverman, 2008), and carbon markets are no different. A non-scarce “non-value” like carbon requires active state intervention for it to be commodified (Koch, 2014, p. 54), enforcing an “overarching regulatory framework” within which market activities can take place (Fletcher, 2012). The end result of which is that now “an ever-increasing portion of the world’s energy and material resources now flows in networks of market-based connections” (Manno, 2011, p. 2075).

It is fitting that like the world of abstraction and derivatives from which it was birthed carbon markets and emissions trading have since their inception been wracked with corruption and criminality. A reliance on corporate self-regulation and difficulties in offset measurement have helped to draw in millions of dollars (or pounds, or euros) into “climate fraud” with corporations lying about emissions reductions or exaggerating offset projects to generate carbon credits (Bachram, 2004). Even INTERPOL felt it necessary to release a report in 2013, the “Guide to Carbon Trading Crime” as part of its Environmental Crime Programme (INTERPOL, 2013). It details the vulnerabilities of carbon markets to embezzlement, money laundering, insider trading, and cybercrime, and details how the capacity to cut corners, falsify information, or receive bribes has been found in institutions of all kinds including supposedly independent GHG accounting firms, national authorities, and companies. In recent years the full extent of “carbon crime” has become apparent, involving computer hacking, VAT fraud, bomb scares, and even funding for terrorism (Day & Bawden, 2014; Funk, 2015).

So what about emissions? Carbon markets are an attempt to quickly and efficiently allocate pollution rights in order to prevent climate change, so what evidence do we have for GHG reductions? As with setting a workable price for carbon, the carbon markets have failed in this regard. To start, many of the trading processes themselves have no inherent environmental benefits and do not actually reduce greenhouse gas emissions (Baldwin, 2008)! The growing expansion and coupling of carbon markets have done nothing to reduce emissions, and “evidence of the CDM to date suggests that offsetting increases rather than reduces” these emissions (Reyes, 2012, p. 28), or at the very least these CDM projects have done nothing to halt the rise in emissions (Fernandes & Girard, 2011). The billion (and potentially trillion) dollar market in carbon and offsets has now created an economic structure with “vested interests whose opportunities for making money rely on maintaining GHG emissions, not reducing them” (Spash, 2010), thus making any attempt to reduce GHG emissions impossible. There have been localised emissions reductions, such as those in the EU, but these have been a result of short-term fuel switching (e.g. coal to natural gas) and do not constitute a sustainable strategy (Calel & Dechezleprêtre, 2012). One can even see the unabated increase in emissions through the online measurements of the Mauna Loa Observatory (CO2Now, 2015).5

This would seem to suggest that whether the carbon markets are designed well or not, it is impossible for them to reduce emissions in any significant way. Let alone the fact that the global carbon market is vulnerable to financial “shocks” (and that financial “firewalls” to enable resilience will never sit well with neoliberal orthodoxy (McKibbin et al, 2008, p. 13) a safe carbon budget cannot actually enable carbon trading due to supply constraints. As Childs (2012) describes at length:

The global carbon budget to avoid dangerous climate change is too small to allow trading. If a temperature target of 1.5 degrees is chosen with a reasonable to high chance of avoiding it, then the global carbon budget will be tiny. Carbon trading relies on countries having ‘spare’ carbon emissions that they can sell to others who do not have enough. Under a tiny carbon budget it is almost certain that no country will have any spare emissions to sell. Rich countries would need to make significant cuts very quickly and developing countries would have to develop predominantly through low carbon technologies. (p. 15)

Again, this confirms the impossibility of carbon markets having any role to play in emissions reductions. To produce a workable carbon market, the climate will have to be endangered, and as Spash (2010) describes, GHGs are so well-embedded and pervasive in the global economy (via fossil fuels – see introduction) that their emission cannot be slowed down via simple market mechanisms. Further, this ignores the existence of huge fossil fuel consumers/GHG emitters that are not and cannot be subsumed under markets – the US military for example, “by some accounts the largest single consumer of petroleum in the world”, would hardly allow itself to be charged a carbon price as it released “56.6 million metric tons of CO2” in 2011 (Klein, 2014, p. 99).

What of the other element of our low carbon future – that of enabling the transition to a future society powered by renewable energy? Again this is an abject failure showcasing how carbon markets cannot justify their raison d’être. Lohmann (2010b) provides us with evidence that, in the case of the EU ETS, the flagship of carbon markets, renewable energy “gains no demonstrable benefits” and quotes other experts who are adamant that carbon prices cannot “deliver the escape velocity required to get investment in technological innovation into orbit” (p. 16). Indeed, the EU ETS has been criticised for being in “direct competition” with the development and subsidising of renewable technologies (Gale, 2015, p. 1), and at best it has had “a very limited impact on low-carbon technological change” (Calel & Dechezleprêtre, 2012, p. 24). Koch (2014) comes to the same conclusion, stating “carbon prices have at no point in time been high enough to trigger behavioural change and technology investments” (p. 60). Carbon markets are thus able to trigger short-term changes (e.g. fuel switching, see Calel & Dechezleprêtre, 2012) for immediate profit but are unable to undergo any “long term structural changes” to promote a renewable future (Lohmann, 2006; 2010a). Even the economist Jeffrey Sachs, director of the Earth Institute and an “apostate of market theology” (Storm, 2009, p. 1019) said that the “hands-off approach” of economists setting prices and unleashing market forces “will not work in the case of a major overhaul of energy technology” (Sachs, 2008).

A mistaken enemy: capitalism, not carbon

“Climate change must be defined as an issue of capital not carbon…there is no equitable technological solution to climate change.” — Steven, 2012

A more fundamental critique is thus required, a need to address the heart of the capitalist system, of the “grow or die” imperative (Bookchin, 1993) that has created carbon markets. As has been seen it is clear that carbon markets have failed in their objectives of reducing GHG emissions to prevent anthropogenically-induced climatic change and enabling a transition to renewably powered economies. Instead they have enabled a subterfuge of environmental protection and progressivism whilst maintaining and furthering inequitable wealth distribution. Whilst there appears to be minor conflicts between advocates of uncontrolled economic growth at all costs and what could best be called a “climate bourgeoise“ that seeks to use the biocrisis to facilitate another round of “accumulation by dispossession” (Harvey, 2004) or “Accumulation by Decarbonization” (Bumpus & Liverman, 2008) capitalism is still unrelenting in its commodification of genes, species, ecosystems (Sullivan, 2009) and now the atmosphere, maintaining the nature-society binary for its own ecocidal purposes (Out of the Woods, 2014a).

Perhaps unsurprising given its capitalist and neoliberalist background, carbon markets and emissions trading have done an excellent job of maintaining inequalities and facilitating wealth transfer from rich to poor. As with all markets, “wealthier participants may secure allowances on more favourable terms than impoverished users solely due to the information and arbitrage opportunities that accompany their superior wealth” (Page, 2012, p. 944). Similarly Steven and Böhm et al reinforce the idea that “there is no equitable technological solution to climate change. A de-carbonised global economy will still be a capitalist economy with all the social and environmental damage this entails” (Steven, 2012) and that “even if a decarbonized capitalist ‘green economy’ were possible, such an economy would be characterized by uneven growth and disparities of income, and by the unequal distribution of economic, social and environmental risks that global markets produce” (Böhm et al., 2012). The anti-ecological character of capitalism, as Tokar (2014) asserts cannot be denied “however skilled we may become at measuring our ecological footprint.” Existing wealth inequalities are only exacerbated within emissions trading, and in fact carbon markets offer up “wealth creating opportunities” to the wealthiest, who happen to also be the most polluting (Baldwin, 2008, p. 22).

As they maintain and perpetuate the disparities between rich and poor, carbon markets preserve the capitalist imperialist divisions of North and South, of “developed” and “developing”. As Howard Zinn stated, “globalization is in fact imperialism” under a different name (Lockard & Schalit, 2001). Areas of land (or water) that maintain a net absorption of carbon (under climate discourse a “carbon sink”) are becoming commodified as part of carbon offset schemes under capitalism, enclosing the commons and empowering dominant countries and elites at the expense of the geographical South (Shiva, 2001; Böhm et al., 2012). In effect the South is becoming a “carbon dump” for the industrialised nations, as “assets” like old-growth rainforests are seized from indigenous communities for them to be officially “managed” per international climate agreements (Bachram, 2004; Rights and Resources Initiative, 2014). Just one example of this is the plight of the Sengwer and Ogiek indigenous peoples in Kenya, who have been attacked and forcibly evicted from their ancestral forest homes in order to clear the forests for conservation and carbon offsets at the behest of the World Bank (Ahmed, 2014), but other examples are frequent (see Böhm & Dabhi, 2009). In the North land speculation for carbon credits also causes conflicts, though of a different nature (Hume, 2015). It then should be of no surprise that many developing countries “suspect that the newfound ecological concern of industrialized countries is merely the latest chapter in a long history of imperialism” (Litfin, 1997, p. 187).

It is clear then that carbon markets are simply another weapon in capitalism’s toolkit of domination and assimilation. As part of the “carbon trading dogma” (Leonardi, 2012, p. 13) reflecting the need for “everything” to “have a price” (Lander, 2011, p. 8) capitalism helps to present the image that “climate change does not contradict finance-driven capitalism” and thus helps stifle resistance or alternatives (Koch, 2014, p. 63) as part of a greater trend of absorbing environmental concerns into market activities (Kingsnorth, 2009). Following Klein’s (2007) concept of disaster capitalism “the energy and desire to act on climate change” has been appropriated and redirected into global capital flows (Paterson, 2009, p. 250), using the biocrisis as “a marketing opportunity and justification to expand neoliberal markets and regulatory mechanisms” (Fletcher, 2012, p. 108). If anything capitalism has proven how quickly it can shift its strategies and approach to climate change from “reactionary and obstructionist” to seeing “a business opportunity” in potential climate disaster (Fernandes & Girard, 2011, p. 20).

“Ultimately,” as Know-Hayes (2010) states, “carbon markets are designed to continue capitalist development and expansion.” The ideas of protecting the environment, reducing emissions, and promoting societal sustainability are secondary to the profit motive, as can be seen in the evidence Lohmann (2010c) cites where the vast majority of carbon market transactions are in derivatives, or the large amount of carbon funds established for financial gain. Carbon markets can also be characterised as an example of “weak ecological modernisation” characterised by technological solutions, technocratic control, and narrow-minded frameworks, in order to act as a “lifeline for capitalist economies threatened by ecological crisis” and nothing else (Gibbs, 1998, p. 5). Indeed, carbon trading can be seen as a form of “proxy commodification” in order to facilitate “green” accumulation (Koch, 2014, p. 54), turning the very problem of environmental degradation into “an asset, a tradable commodity” (Abboud, 2013). Even if the global economy were to be successfully “de-carbonised” it would still be capitalist at heart and in nature, a “more austere form of capitalism in which increasing unrest will require disciplining by increasingly authoritarian forms of state power” (Steven, 2012). In essence capitalism wishes to maintain the status quo, to allow business as usual, and carbon markets certainly allow our consumption (especially those of us in the North) to continue unabated as we purchase “green credentials” and personal offsets to make up for the ecological damage our economies cause (Bachram, 2004; Beder, 2014).

As Bookchin (1985) said thirty years ago, capitalism is not “decaying” by any means. It is an “ever-expanding order that grows beyond the capacity of any society” to contain it. Any attempt to “green” capitalism is destined to fail (Müller & Passadakis, 2009; Tokar, 2014; probablyasocialecologist, 2015). As Bookchin quipped “One might more easily persuade a green plant to desist from photosynthesis than to ask the bourgeois economy to desist from capital accumulation” (Bookchin, 1980, p. 66). Capitalism and the environment “are antagonistic in their very essence” (Amin, 2010) and as described its economic growth is both facilitated by and encourages the consumption of fossil fuels (Foster, 2008; Spash, 2010). A prime example brings us back to the World Bank who, despite its rhetoric of facilitating and financing the transition to a low carbon future, still paradoxically desires economic growth and a stable biosphere as it “continues to subsidise and support fossil fuel extraction on a scale 17 times larger than it supports clean energy initiatives” (Carton, 2009, p. 22). And as Keefer (2006) maintains it was fossil fuels that were responsible for “industrial capitalism and its astonishing conquest and transformation of the world”.

So not only are carbon markets failures at their own objectives but they, as a symbol of capitalism’s desire to co opt and commodify, are inherently anti-ecological. The widespread belief that market mechanisms can facilitate a prevention of climate change or transport us to a sustainable future is extremely dangerous. A new approach is required.

Are markets necessary?

“There are better ways of tackling climate change than by privatising the Earth’s carbon-cycling capacity.” — Lohmann (2006)

Capitalism, then, is a dead end. It can not solve the problem it helped to create and accelerate. “Capitalism is the origin of the biocrisis, the last and final crisis of capitalism” (Institute for Experimental Freedom, 2009, p. 12). Thankfully there are glimmers of hope we can aim towards. The global economy has recently begun “producing renewable energy at an industrial scale” (Steiner, 2015) and it has been estimated the entire world energy infrastructure could easily be replaced with renewables within twenty to forty years (Jacobson & Delucchi, 2010; Schwartzman Schwartzman, 2011). These developments leapfrog any need for carbon markets or other market mechanisms, and it is only political will that is required to realise them, a political will that we must spearhead quickly if we are to avoid conflict as fossil fuel reserves run dry (Hughes, 2008). As Podobnik (2010) states, “The historical record shows very clearly that deep, enduring changes in energy industries require the mobilization of mass social movements. We cannot simply wait for visionary politicians to forge the way” (p. 76-77).

But a solution cannot be a simple product of technics. Our society, and its view of the wider environment, has to change also. “Renewable energy is a necessity for a sustainable and equitable society, but not a guarantee of one” McBay (2011, p. 260) says, citing the US military and its renewable energy projects. We must remember that “The way we position ourselves in our view of the natural world is deeply entangled with the way we view the social world […] Every society extends its own perception of itself into nature” (Bookchin, 1986). A renewably powered capitalist economy would still view the natural world as nothing more than a resource to be managed and plundered, assigned market values and traded, the “terminology of contracts” poisoning our view of ourselves both as humans and as part of wider nature (Bookchin, 1998, p. 79).

The transition to a low-carbon, anti-capitalist social order will be a “transition to the unknown” (Levy, 2012). We will need to struggle against the “carbon trading dogma” and the overriding logic of markets, informing others of the alternatives we aim for. As the bourgeoisie ruin not just our world but “the Earth systems which sustain human civilisation” we have to steel ourselves for the struggles ahead and ask ourselves – who’s afraid of ruins? (Out of the Woods, 2014b)

Originally published at Fighting the Biocrisis, republished with author's permission. Written by probablyasocialecologist (@S0cialEcologist). The author apologises for any references that can’t be accessed due to paywalls.

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• 1I borrow the term “biocrisis” from the Institute for Experimental Freedom (2009), referring to “the real wave of extinctions caused by extreme ecological degradation.”
• 2Often defined as the “Kyoto Basket”, the greenhouse gases most responsible for anthropogenic climate change are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and sulphur hexafluoride (SF6), hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs) (Eurostat, 2015).
• 3“The CDM can be seen as a good example of what Peck and Tickell (2002) called rollout neoliberalism, in which the state intervenes to allocate and secure private property rights, provide scientific knowledge, or create stable market institutions.” (Bumpus & Liverman, 2008)
• 4“These tipping points are the irreversible melting of the Greenland Ice Sheet, the collapse of the West Antarctic Ice Sheet, the dieback of the Amazon Rainforest, the reorganisation of circulation in the Atlantic ocean and the increase in the amplitude of the El Niño Southern Oscillation.” (Yeo, 2015).
• 5There is even a Twitter feed run by the Scripps Institution of Oceanography that documents global CO2 concentrations – they can be followed at @Keeling_curve.