Check out carbontradewatch.org for lots of general background on the problems of carbon trading.

As for the book “Carbon Trading: A Critical Conversation on Climate Change, Privatisation and Power” each of it’s chapters are actually briefly summarized here: http://www.thecornerhouse.org.uk/summary.shtml?x=544225

I think this passage, from the conclusion of the 3rd chapter in the book, although a bit dense best summarizes the arguments and evidence presented:

“Many people of strong environmentalist convictions and democratic spirit genuinely believe that if the earth’s carbon-cycling capacity is to be respected and preserved, it is inevitable that it be treated as a commodity. ‘Given the logic of capitalism’, says Peter Barnes, one thoughtful US environmentalist and egalitarian, treating carbon cycling capacity as a ‘scarce resource’ and an ‘asset’ to be marketed ‘is the best way to save it’.

Not, Barnes hastens to add, that the ‘sky has no value other than its exchange value… If anything we know can be called sacred, the sky is such a thing… It has incalculable intrinsic value.’ Yet, at the same time, he argues:

[W]e need to communicate with markets because markets determine how resources are used. All our preachings and sermons will be for naught if we don’t inscribe them on tablets that markets can understand… [The market] is a great system for managing scarcity… If you ask a market to determine price of a thing someone owns, it will do so quickly and efficiently. Transactions will then follow… [The price] is not the equivalent of the intrinsic value, nor an editorial comment on it. It’s merely a proxy, a useful numerical substitute. And it’s a much better proxy than the one markets currently use – namely, zero… To achieve the ends of Chief Seattle, we must use the means of Dow Chemical. The world has come to that, and it’s sad. But… selling the sky is not an end in itself. It’s a means for achieving a higher end – the preservation of our planet.

This chapter has provided concrete materials to help show that this appealing argument – which today is encountered in politics, in international development, in the UN, in think tanks, in the academy and in environmentalist circles – is both invalid and unsound. That is, it has helped show both that its conclusion does not follow from its premises, and that the premises themselves are mistaken.

The argument is invalid because even if the premise that the ‘logic of capitalism’ necessitates or encourages pollution markets were true, it would not follow that carbon trading is a sensible regime for addressing global warming. By the same token, while it is true that some ‘markets’ do partly determine how some resources are used in some circumstances, and that having a ‘zero price’ does result in the inadequate valuation of some resources in certain limited contexts, it doesn’t follow that a trading system of the type currently being set up is capable of improving the ‘scarcity management’ of the earth’s carbon dump in a way that could foster a livable climate.

Price is not a ‘useful numerical substitute’, in any context, either for the ‘intrinsic value’ of carbon-cycling capacity (whatever that might be) or its survival value. To suggest that it could be reveals fundamental misunderstandings of climate, scientific as well as social, economic and political. The purported carbon commodity is different from established commodities such as wheat or silver. For governments to take it upon themselves to make it an economically scarce good is not encouraging, but rather hampering, practices that could increase the chances of a livable climate in the future. The price assigned by carbon markets in the course of ‘managing’ that scarcity, accordingly, and the resulting incentives and ‘transactions’, are moving the world away from that goal rather than toward it. This is particularly so in view of the facts that the market ‘management’ of this scarcity involves providing extensive property rights to corporations, is biased mainly toward short-term cost reductions for industry, and involves a commodity that is an incoherent amalgam consisting both of ‘emissions’ and of credits generated by carbon projects.

The argument is also unsound in that its premises are false. In truth, ‘markets’ do not, in most circumstances around the world, ‘determine how resources are used,’ in any sense in which markets can be distinguished from, or do not depend on, commons regimes, state agencies and other social organizations that don’t revolve around the price mechanism. To put this another way, it is empirically false that no market price entails less responsible stewardship than a positive price. Only if, per impossible, commodification somehow became all-pervasive, and the price mechanism the sole and all-powerful coordinating mechanism for all transactions involving land, water, life and so forth, could this assertion even become possible to evaluate. Carbon trading, in addition, is no more congenial to anything that might be called the ‘logic of capitalism’ than a multitude of other types of regulation, taxation, planning and stewardship that private corporations themselves have always depended on – and in this case, given the increasingly obvious contradictions of carbon trading, may wind up preferring.

As in so many areas of contemporary social life, a vague ideology of market effectiveness and market inevitability is concealing a regressive, confused, contested and environmentally dangerous political and technical project. The ideology and the project both badly need to be opened to wider public criticism.”

Unfortunately, given that it is 350+pages, I think it’s a good bet that most people - even here - are not going to read it.

Would you be open to posting a very brief list of the main 3 or 4 points it makes against carbon trading? I think it would be helpful. Note that I am not suggesting a precis or summary - just a few sentences.

Cheers,
Dave

There are many, many reasons to be skeptical of any effort to “harness the power of the market” to stop climate change: there is a good reason that Enron lobbied heavily for Kyoto and said that Kyoto would “do more to promote Enron’s business than almost any other regulatory initiative.”

Clearly, as Enron illustrated, markets are susceptible to control and manipulation, are chaotic, and don’t always play out the way economists (let alone environmentalists!) predict: do you really think we want to “harness” that kind of force to solve the climate crisis, especially as the primary force?

There’s much, much, much more I could say here, but without wanting to get into an essay on the topic right here, I would suggest that people check out my previous article on this blog on the topic “World Betting the Farm on Carbon Trading?” (http://itsgettinghotinhere.org/2007/09/04/world-to-bet-the-farm-on-carbon-trading/) and especially the links for further reading on there.

While I don’t agree with (nor care too much for the style, background, and philosophy of) the authors of the Death of Environmentalism on much, I do agree that we should make the primary focus getting positive ideas out there that reject the status quo rather than focusing on getting the government to create a market-based system that privatizes and auction off (or give away….) our Earth’s capacity to cycle carbon to the highest bidder, as all of the bills in congress on the topic currently do.

[btw, In the ideas category I definitely DO NOT support the authors' sick military-industrial-solar complex they propose! I would say -- and probably many of the people living under the boot of the US empire would agree -- that we might as well just stick with the global warming...]

I’ll sure I’ll post a longer article on this topic on the blog at some point in the not to far future…that’s all for now!

There are many, many reasons to be skeptical of any effort to “harness the power of the market” to stop climate change: there is a good reason that Enron lobbied heavily for Kyoto and said that Kyoto would “do more to promote Enron’s business than almost any other regulatory initiative.”

Clearly, as Enron illustrated, markets are susceptible to control and manipulation, are chaotic, and don’t always play out the way economists (let alone environmentalists!) predict: do you really think we want to “harness” that kind of force to solve the climate crisis, especially as the primary force?

There’s much, much, much more I could say here, but without wanting to get into an essay on the topic right here, I would suggest that people check out my previous article on this blog on the topic “World Betting the Farm on Carbon Trading?” (http://itsgettinghotinhere.org/2007/09/04/world-to-bet-the-farm-on-carbon-trading/) and especially the links for further reading on there.

While I don’t agree with (nor care too much for the style, background, and philosophy of) the authors of the Death of Environmentalism on much, I do agree that we should make the primary focus getting positive ideas out there that reject the status quo rather than focusing on getting the government to create a market-based system that privatizes and auction off (or give away….) our Earth’s capacity to cycle carbon to the highest bidder, as all of the bills in congress on the topic currently do.

[btw, In the ideas category I definitely DO NOT support the authors' sick military-industrial-solar complex they propose! I would say -- and probably many of the people living under the boot of the US empire would agree -- that we might as well just stick with the global warming...]

I’ll sure I’ll post something more on the topic at some point in the not to far future, that’s all for now!

As I understand it, the critiques of cap-and-trade focus on the trading part and (possible) use of emissions offsets from overseas, not on the concept of putting a price on carbon. And the folks that typically argue against cap and trade argue in favor of a carbon tax as a replacement. In my mind, a cap-and-auction and a carbon tax both accomplish the task of establishing a price on carbon emissions (through regulation I might add), and my discussion in this post was meant to be policy neutral between the two.

It’s time to start talking about regulation to price carbon (be it cap and auction or carbon tax) and public investment in a clean energy future as two sides of the same coin - they are mutually supportive, not mutually exclusive, indeed, the regulation provides the funding source for the public investment dollars while sending market signals that encourage private investment to step up to the plate as well. Neither approach will work on their own, at least not fast enough to solve the climate crisis and build a carbon neutral prosperous America.

Jesse

The exception (i.e., opposition to carbon capture and nuclear) eliminates over 70% of US electric capacity. For those who are not direct climate activists, this sounds like trying to solve the problem with the proverbial hand tied behind the back. As I recall the Princeton Wedges and the IPCC reports, a wide range of actions (even soil and animal husbandry changes) are part of the solution.

I perceive a divide between the activist community and the general public who are concerned about climate change, but not interested in a social or economic revolutions.

It’s not so much that many climate activists “oppose” public investments and technological innovation efforts (except for carbon capture and storage and nuclear), they just don’t prioritize it enough even though clean energy technology is arguably the most important (and politically/economically pragmatic) solution to the climate problem. We’re all for a Sky-Trust approach (and many of our friends are working on Sky-Trust), but we’re concerned that A) any money generated will be subject to the pork-barrel, special interest politics of DC and leaves us in a precarious situation with investment (especially when what’s needed is around $30 billion annually); and B) Sky-Trust is dependent on raising energy prices, which may be much less politically feasible than an outright public investment-innovation approach and may result in all the funds being redistributed for compensation.

Thanks for jumping in on this important topic. I hope you will continue to sink your teeth into this one — the upcoming global warming legislation is crucial to America’s future. We have to be as clear-eyed about what it will do and what it won’t do as we are about the science of global warming.

First let me acknowledge points of agreement. We all agree that carbon should be priced. The question is how much can a carbon price in the U.S. do to reduce emissions?

Our analysis shows that even a relatively low carbon price will do very important work in moving from coal to natural gas, increasing efficiency, and motivating conservation — in the United States. If executed perfectly well, it could reduce emissions roughly 20 percent over the next couple of decades (emissions reduction calculations are very, very tricky, and I am thus happy to go over these calculations in a future post for anyone who is interested).

There are some who say the great thing about a price on carbon is that it avoids “picking winners and losers.” That’s a disingenuous claim. Setting a particular price on carbon very clearly does pick winners and losers. The winners are efficiency, conservation, and some kinds of sequestration (e.g., burning methane off of landfills).

What a modest price on carbon (~$10 - 20/ton of Co2) won’t do is quickly bring down the price of clean energy technologies, for reasons we explained our in our recent post, “Environmentalism’s Existential Moment.”

http://gristmill.grist.org/story/2007/9/27/12312/0380

Why does that matter? Because if we do not bring down the real price of clean energy technologies as quickly as possible, China and the rest of the world (us included) will bring on-line a whole new coal-based infrastructure that threatens to swamp any amount of action in the U.S.

China is not going to set a price for carbon, and thus raise its energy costs, without a good economic reason to do so. It won’t blindly follow the U.S., as many environmentalists allege. And even if China establishes a modest carbon price in the future, it won’t establish one nearly high enough to quickly move to solar and other clean energy technologies, including carbon capture and storage (CCS) facilities for its coal plants (few to none of which are CCS ready).

One scenario we support is simply buying down the price of solar. How could this be done? In the same way we brought down the price of microchips in the 60s. Microchips used to be expensive, now they’re cheap.

The DoD could purchase 10 - 20 billion dollars worth of PV — through a competitive, transparent bidding process — each year for 10 - 20 years. One calculation shows that it would cost $50 - 212 billion to make solar as cheap as conventional energy sources. Again, these are tricky calculations, but solar is a great case study because its price declines ~20 percent for every doubling of capacity.

There is no silver energy bullet, and this can’t happen through regulation alone. Even in California, which passed the Million Solar Home law, I was told by a solar industry executive in July that because of red tape, only 20 homes are being installed with solar systems each day, when that number needs to be 200 per day to be on track. Andy Revkin at the Times pointed out that in order for solar to constitute one-seventh of the emissions reductions we need, there will need to be a whopping 200 million solar homes. And that isn’t going to happen as long as solar is 5 - 10 times more expensive than coal and natural gas.

You’ve suggested that we’ve exaggerated the difference between our investment-centered approach and the environmental lobby’s regulation-centered approach. But anyone who looks at the policy agenda of the leading environmental groups who determine global warming strategy in Washington will find that there is no strategy to buy down the price of solar. Nor is there any major investment strategy whatsoever. Don’t confuse green rhetoric with policy reality — you have to look at the legislation being pushed in Congress.

That said, there is today an exciting political opening. Senator Lieberman has indicated he wants to auction permits. What will the money raised go to? It’s not yet clear. We estimate that what’s needed is at least $30 billion in pork-free public investment capital to buy down the price of clean energy (and invest in other areas, like new transmission lines to transport wind power from rural areas to cities).

Could the Lieberman-Warner legislation do this? Absolutely. Is the environmental lobby united behind a strategy to make it happen? Unfortunately not.

At least not yet. The good news is that there’s still time. The trouble that Democrats are having building support for global warming legislation in Congress might be overcome if there were a big and bold strategy for creating jobs and establishing American economic leadership in the fastest growing markets in the world.

The truth is, it’s up to the (largely post-boomer) generation of environmentalists and non-environmentalists to lobby environmental leaders, lobby Congress, and blog about the necessity of a large clean energy investment.

The best part about it all is that you don’t really have to care all that much about global warming to support a big investment strategy for clean energy. Maybe you just care about energy independence. Maybe you just care about economic competitiveness. The large percentages of Americans who say they support cap and trade on global warming declines dramatically when voters learn that setting a price on carbon means raising the price of coal and oil. The solution is to put investment, jobs, and economic possibility at the center.

If global warming legislation passes that does not raise and allocate at least $30 billion/year for clean energy investment, then we’ll have to find some way to get that money from somewhere else. That public investment capital to bring down the real price of clean energy is more urgent, in our view, than a price on carbon.

In any event, it’s great to have the conversation, and we’ll look forward to your posts on our book, Break Through.

Best regards,

Michael

Sorry Jessie, but you are quite wrong about this…and I’m a bit surprised to hear you suggest it
since numerous other contributors to this site have written articles rejected carbon trading!

So also has the many members of the Durban Group for Climate Justice, (http://www.carbontradewatch.org/durban/), an alliance which, amongst other things, firmly rejects cap-and-trade.

Even many Friends of the Earth chapters from both Northern (see http://www.foe.org.au/media-releases/2006-media-releases/mr_16_08_06.htm) and Southern countries have also rejected cap-and-trade.

Here’s just one reason (amongst many!) why:
http://www.reuters.com/article/latestCrisis/idUSL24396947

As I’ve said several times before on this site, if you haven’t read the definitive text critiquing Carbon Trading, Carbon Trading A Critical Conversation on Climate Change, Privatisation and Power, please don’t go around advocating for it - you may not know what you are speaking of!

It’s available in it’s entirety here: http://www.dhf.uu.se/pdffiler/DD2006_48_carbon_trading/carbon_trading_web.pdf