Carbon Trading: how it works and why it fails -- by Oscar Reyes and Tamra Gilbertson

Carbon trading lies at the centre of global climate policy and is projected to become one of the world’s largest commodities markets, yet it has a disastrous track record since its adoption as part of the Kyoto Protocol's Clean Development Mechanism (CDM) administered by the UN.

Carbon Trading: how it works and why it fails (2009), by Oscar Reyes and Tamra Gilbertson, in Dag Hammarskjöld Foundation's Critical Currents series, shows the limitations of climate action within the assumptions of neoliberal economics. The EU Emissions Trading Scheme, the world’s largest carbon market, has failed to 'cap' emissions, while the Kyoto CDM routinely favours environmentally ineffective and socially unjust projects. Examples are given from CDM projects in Brazil, Indonesia, India and Thailand.

Cancún, the UN "green economy" and Rio+20 campaign, all propose ways of expanding the trading experiment -- with Copenhagen Accord pledges, REDD+, and PES. This report says it should be abandoned. There are many ways forward without carbon trading – subsidy shifting, energy efficiency, regulation and an FTT tax on financial speculation -- but there are no "market" short-cuts if climate change is to be addressed in a just and fair manner.

"Anyone who still thinks that creating a carbon casino can solve our climate crisis owes it to themselves to read this book. The most convincing and concise challenge to the green profiteers yet."Naomi Klein, author, The Shock Doctrine.

"Carbon markets are less about reducing emissions than making carbon cuts as cheap as possible for large corporations." – Maud Barlow, Blue Planet Project.

"The Copenhagen Accord effectively kills Kyoto, replacing it with voluntary commitments –- ineffective and dangerous. The Cancún text systematically excludes Cochabamba proposals of the World Peoples' Conference on Climate Change: full recognition of indigenous rights, rights for nature, an appeal tribunal. It gives a green light to REDD, rewarding those responsible for deforestation while dispossessing indigenous and forest dwellers." – Nick Buxton, Transnational Institute (TNI)

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See also Asian NGOs' 27-point Platform for Climate Justice (2009),  and the Biodiversity justice declaration (Oct 2010).