Carbon markets have been ineffective at reducing global greenhouse gas (GHG) emissions enough to reduce atmospheric CO2 concentrations. The UNFCCC process in general and the Paris accord specifically seeks only to limit the rate of emissions growth. Today’s carbon markets do not have a “cap” on emissions: this is failure by design.
The US experience in emissions trading is instrumental to understand the fundamental flaws of international carbon markets today. The US phaseout of leaded gasoline was facilitated by emissions trading, but the phaseout was mandatory and time-bound under the Clean Air Act of 1970 (CAA-1970). Emissions trading allowed flexibility for regulated entitites -- petroleum refineries -- to comply with the mandated phase-out. The concepts of "baseline" and "additionality" did not exist and were not applicable because CAA-1970 created a new business-as-usual, which was the elimination of lead in gasoline, as opposed to slowing the growth of leaded gasoline production.
In the 1990s, a broader emissions trading program for acid rain control was implemented, pursuant to the Clean Air Act Amendments of 1990 (CAAA-1990). The 1990 law allowed emissions trading as an economically-efficient alternative to installing point-source emissions controls. Regulated entities could comply with technology and performance standards and/or trade emissions to achieve compliance. Again, the concepts of "baseline" and "additionality" did not and do not apply: regulated entities can engage in emissions trading if they want to, or they can pay more to comply with the stack emissions standards.[2]
Pursuant to signing the UNFCCC in the 1990s, a financial mechanism was sought to spur investment in GHG reductions, which would be complementary to the Global Environment Facility (GEF). In 1997, the Kyoto Protocol introduced Emissions Trading, Joint Implementation, and the Clean Development Mechanism (CDM). Kyoto looked like cap and trade but had only a partial cap and there was no regulatory foundation such as CAA-1970 and CAAA-1990, so in effect there was no cap and only trading. Carbon trading under the UNFCCC remains in some suspense as the new rules pursuant to Article 6 of the Paris climate accords are still being clarified.
No one can claim that the UNFCCC process has been a success, because it has been a series of failures by design. The Paris accord is another episode in this saga, as the targets of 450 ppm atmospheric CO2 and 1.5 C are the death penalty for the world’s tropical coral reefs. In layman’s terms, the Paris targets are a bit like an athlete who decides that amputation of both legs will aid in winning a future marathon.
The experience in global carbon markets brings to mind a couple of quotes, one for the educated elite and one for the masses:
“We are all born ignorant, but one must work hard to remain stupid.”
- Benjamin Franklin
“Life is hard. It’s even harder if you’re stupid.”
- John Wayne
📢 The science is clear: carbon offsetting is not reliable for tackling the climate crisis.
We've joined 80 civil society organisations to call on climate target-setting bodies including @sciencetargets to stick to science.
Read our joint statement: https://lnkd.in/dmA_5mRs