5.3 Carbon markets

Leaving peak oil aside and returning to carbon reduction programmes, one of the key problems with many (such as REDD) is arguably that they are tied into commercial considerations through carbon markets.

Carbon markets allow companies or countries to trade emissions reductions, thus allowing emissions targets to be met (in theory) at least cost. They comprise two main types of scheme: cap-and-trade schemes (such as the EU emissions trading scheme (ETS)) and schemes which generate offset credits (such as the clean development mechanism). Although widely supported politically, environmental groups are wary of carbon markets, arguing that they simply enable industrialised nations to avoid the steep emissions reductions needed to avoid dangerous climate change. If relatively inexpensive carbon credits flow into carbon trading systems that are supposed to encourage movement towards lower carbon economies in industrialised countries, then they are likely to find it cheaper to purchase credits than genuinely reduce emissions. Even in the UK Government, the CCC states that a low-carbon energy system for the UK cannot be produced via the EU ETS alone, supporting the need for genuine domestic emissions reductions.

5.2 Changing the fossil fuel industry

5.4 Contraction and convergence