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Carbon Trading: Unethical, Unjust and Ineffective?

Published online by Cambridge University Press:  22 September 2011

Simon Caney  and
Cameron Hepburn
Simon Caney
Affiliation:
Magdalen College, Oxford
Cameron Hepburn*
Affiliation:
New College and Smith School, Oxford
*
*Corresponding author.E-mail address:[email protected]
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Extract

Cap-and-trade systems for greenhouse gas emissions are an important part of the climate change policies of the EU, Japan, New Zealand, among others, as well as China (soon) and Australia (potentially). However, concerns have been raised on a variety of ethical grounds about the use of markets to reduce emissions. For example, some people worry that emissions trading allows the wealthy to evade their responsibilities. Others are concerned that it puts a price on the natural environment. Concerns have also been raised about the distributional justice of emissions trading. Finally, some commentators have questioned the actual effectiveness of emissions trading in reducing emissions. This paper considers these three categories of objections – ethics, justice and effectiveness – through the lens of moral philosophy and economics. It is concluded that only the objections based on distributional justice can be sustained. This points to reform of the carbon market system, rather than its elimination.

Type
Papers
Information
Royal Institute of Philosophy Supplements , Volume 69 , October 2011 , pp. 201 - 234
Copyright
Copyright © The Royal Institute of Philosophy and the contributors 2011

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References

1 United Nations Framework Convention on Climate Change (UNFCCC): 1992, Article 2, text available at http://www.unfccc.int.

2 We focus on carbon dioxide emissions given their sheer volume and contribution to climate change but we should note, of course, that carbon dioxide is not the only greenhouse gas.

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21 This table captures, we hope, the logical possibilities but it obviously does not describe all the kinds of issues that might arise under the various headings. For excellent discussion of the kinds of issues that arise and the relevant normative consideration see Satz, Debra, Why Some Things Should Not Be for Sale: The Moral Limits of Markets (New York: Oxford University Press, 2010)CrossRefGoogle Scholar.

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31 We are grateful to Luc Bovens for raising this objection.

32 Note, incidentally, that this argument does not object solely or even primarily to the ‘trading’ of permits. Rather its concern seems to be with a system which distributes ‘rights to use the atmosphere’ whether or not they are tradeable.

33 Michael Sandel has given this kind of argument. See ‘Should we Buy the Right to Pollute?’, 95. Sandel's argument against emissions trading is a part of a more general civic republican concern about the role of markets and the way they encroach into many domains in human life. See Sandel, Michael J.Justice: What's the Right Thing to do? (London: Penguin Books, 2009), 84–91Google Scholar and his discussion of ‘republican citizenship’ in Sandel ‘What Money Can't Buy: The Moral Limits of Markets’, The Tanner Lectures on Human Values delivered at Brasenose College, Oxford, May 11 and 12, 1998, 107ff. This is available at: http://www.tannerlectures.utah.edu/lectures/documents/sandel00.pdf (last accessed on 8 September 2010). See also his first Reith Lecture (‘Markets and Morals’) at http://www.bbc.co.uk/programmes/b00kt7rg (last accessed on 8 September 2010).

34 For further discussion see Caney ‘Markets, Morality and Climate Change’, 208.

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36 We are grateful to Luc Bovens for raising the objection presented in this paragraph and the example we use to illustrate it.

37 Sandel ‘Should we Buy the Right to Pollute’, 95. See also Goodin's discussion of the related, but distinct, argument that it is wrong to have a scheme that allows ‘some but not all’ to be exempt from some burden or to enjoy some benefit, ‘Selling Environmental Indulgences’, 584–585. How objectionable we find such schemes will depend heavily on whether the allocation of the scarce good is fair.

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39 We are grateful to Luc Bovens for pressing us on this point.

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44 What about states that do not deny their subjects the emissions needed for a decent standard of living but which nonetheless distribute them unjustly? This raises a number of complex issues that we cannot hope to resolve here. Much depends on factors such as (i) whether emissions trading with this unjust state improves or worsens the condition of the unjustly treated within that state at all, (ii) whether withholding trade incentivises the unjust government to engage in reform or whether, by contrast, engaging in trade is a more effective way of encouraging improvements, and (iii) how much weight we accord to self-determination as compared with securing an internally just distributions. See, further, Caney Justice Beyond Borders, chapter 5 and 7.

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46 Sandel ‘Should we Buy the Right to Pollute?’, 94.

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