Carbon flows, carbon markets, and low-carbon lifestyles:reflecting on the role of markets in climategovernance

Abstract

The role of carbon markets in governing global carbon flows triggers substantial debates among policymakers, social movements and social scientists. The present debate on carbon markets is different from the earlier debate on market-based instruments in environmental politics. Carbon markets represent both more radical and more risky forms of governing global carbon flows, as illustrated by an analysis of both regulatory and voluntary carbon markets operating on the global and personal level. To make use of their environmental potential and to prevent them from generating perverse consequences, carbon markets are to be regulated by state, market and civil society authorities. Embedding carbon markets in civil society means connecting carbon flows to the households and the lifestyles of citizen-consumers in a direct and meaningful manner, which can increase legitimacy and foreground climate change politics among citizen-consumers.

Keywords:

• carbon governance
• carbon markets
• ecological modernisation
• low-carbon transitions
• domestic consumption practices

Notes

1. Our analysis of carbon markets builds upon the works of sociologists and political scientists – Stephan and Paterson (2012), Newell and Paterson (2009, 2010), Bailey etal. (2011), MacKenzie (2009), Newell and Bulkeley (2010) and Lovell et al. (2009), amongst others.

2. Ecosecurities and CantorCO₂-e are global companies ‘running’ hundreds of CDM-projects in more than 30 countries.

3. Newell and Paterson (2010), Bloomberg/Ecosystem Marketplace (2011) and Mol (2012) note that, among others, Gold Standard and SOCIALCARBON certified VERs have a significantly higher price than VERs without NGOs support.

4. The carbon disclosure project discloses GHG emissions and climate strategies of 3000 organisations in some 60 countries on behalf of 551 institutional investors, holding US$71 trillion in assets under management and some 60 purchasing organisations such as Dell, PepsiCo and Walmart.

5. As Helleiner and Thistlethwaite (2012, p. 13) comment: ‘a number of corporate interests joined the push for tighter regulation because of their worries about the impact of volatile carbon markets on other commodity derivatives markets’.

6. Personal carbon markets are markets where allowances allocated to individuals are capped and traded. There is a variety of schemes available (Tradable Energy Quota (TEQ) Personal Carbon Trading (PCT) and Personal Carbon Allowances (PCA)), which we lump together under ‘personal carbon markets’. See for more details the instructive special issue of Climate Policy, edited by Fawcett and Parag (2010).