‘Because in Chile [carbon] markets work!’ Exploring an experimental implementation of an emissions trading scheme to deal with industrial air pollution in Santiago

Abstract

Emissions trading schemes have gained an important degree of momentum in recent years, rapidly becoming mainstream solutions to deal with the negative environmental consequences of human activity such as pollution and global warming. However there is still little empirical knowledge about what specific kind of work emissions trading schemes do. Using the analytical tools provided by science and technology studies, especially developments studying markets and economic practices, this paper looks to contribute to filling this void by exploring three kinds of work that emissions trading schemes might do: performing a textbook market of emissions permits, performing a civilized market in which a multitude of heterogeneous actors participate and as exemplars of the validity of certain economic knowledge. In order to explore the usability of this conceptualization the paper will then analyze one of earliest concrete implementations of this device: an emissions trading scheme introduced to deal with industrial air pollution in the city of Santiago (Chile) in the early 1990s. Through a historical genealogy, it will show this emissions trading scheme working not mainly as a textbook market, but as a civilized one and as a powerful exemplar that helped to mobilize both command-and-control regulation and neoliberal environmental economics to/from Chile and elsewhere.

Keywords:

• emissions trading
• air pollution
• work
• textbook market
• civilized market
• exemplar
• Chile

Acknowledgements

The underlying project ‘Innovation in Governance’ (grant number 01UU0906) from which this publication derives is funded by the Federal Ministry for Education and Research (BMBF), Germany. Responsibility for the contents of this publication lies entirely with the author. I acknowledge the very helpful comments on early drafts of this paper by Jan-Peter Voß, Arno Simons, José Ossandon and the three anonymous referees from Economy and Society.

Notes

1 All the names of the people interviewed for this study have been changed to protect their anonymity.

2 During the dictatorship such an approach was also going to be applied to other natural entities such as water resources (Bauer, 1997, 2004; Budds, 2004), fisheries (Schurman, 1996) and forests (Silva, 2004), although not by ODEPLAN. For a general analysis of the process see Carruthers (2001) and Silva (1995).

3 Besides posing serious doubts about the quality of the commensurations available, the research concluded that at the time the main cause of air pollution in the city was unpaved streets, a source that cannot be taxed.

4 After some years of growth, an acute economic crisis started in 1982, making the government quite reluctant to consider any kind of economic regulation that could affect employment.

5 At the time the only applications had been the ‘Bubbles’ and ‘Offset’ policies carried out by the EPA since the mid-1970s, and even these do not apply to the trading of emissions in full (Voß, 2007).

6 It is important to note that emissions trading was not the only instrument considered by the members of the CEDRM. For pollution coming from other sources (such as vehicles or small industries) or with higher levels of intensity (defined as critical) other policy instruments were developed, several of them of the traditional command-and-control kind.

7 A neoliberal think-tank established in 1990 with an agenda (and name) quite similar to Libertad y Democracia, the one created by De Soto in Peru (see Mitchell 2005, 2007).

8 As was demonstrated in 2003 when the draft of a law proposing ETS as a nation-wide mechanism to deal with environmental issues was overwhelmingly rejected, especially by the Concertación congressmen.

9 In this sense it should be seen as much closer to EPA's offset policy rather than a fully developed ETS such as the one implemented by the European Union in 2003.

10 Whose members focused their attention after that almost exclusively on drafting the Framework Law for the Environment (No. 19.300), finally approved in 1994.

11 Some years later the programme was also associated with the massive adoption by industries of natural gas coming from Argentina, linked with further reductions on total emissions.

Additional information

Notes on contributors

Sebastián Ureta

Sebastián Ureta is assistant professor in the Departamento de Sociología at Universidad Alberto Hurtado (Chile). Previously he was a researcher at the Governance Research Group, Department of Sociology/Center for Technology and Society at the Technical University of Berlin (Germany), where most of the research included in this paper was carried out. He is working on the study of public policy from a science and technology studies perspective. Currently he is finishing a book on transport policy and technologies of subjectification in contemporary Chile.