If there are unequal exchanges in a system of values and prices, there are differential problems of rent and commodities in carbon trading systems. The dominance of fossil-fuel lobbyists at COP26 demonstrated the corporate concern for maintaining profits in anticipation of increased regulation. The latest casino economy has been cap and trade where the air may be filtered but you’ll still need to supply your own oxygen.
There is an emphasis on existing emissions trading systems which are foundationally designed to support marginalized rather than transformative climate actions. The pricing of carbon market based solutions like Cap & Trade has unsustainable premises because the paradigm assumes market clearing prices, among other imperfections. The externality costs by definition assumes a net negativity that exponentially cannot be addressed by new technology in carbon capture or sequestration. As technocratically optimistic a capital market for carbon commodities assumes that substitutions are not simply perfect but speculatively profitable. The Bitcoin bubble’s environmental costs are a paradigmatic example of that delusion.
The material situation is not unlike other forms of capitalist corruption, the real relations are deeply flawed are not unlike the Keen critique of Nordhaus, who argues the global warming impact will be so small the cost of trying to prevent it will be far greater than the consequences of living with it. The reality is that capitalism destroys the climate because its logic of accumulation unbalances the exchange of matter by massively saturating the carbon cycle. OTOH renewable energy does allow for long-term reversal of rent relations.
For political economists, the fictitious capital of commodity markets requires an analysis beyond neo-ricardian rents, if only because the commodity market for offset credits is subject to distortion as either trades or taxes. Such rents signify asset bubbles because like measuring the informal economy and other corruption, bubbles are better seen as necessarily ex ante,
The most radical version of unearned income as economic rents is pyramid scheming: “Ponziandpyramidschemes are self-sustaining as long as cash outflows can be matched by monetary inflows.” The promise of such matching immediate fails when projected “climate income” is permanently negative in the formation of carbon offsets markets based on allowance trading or new technology.
Reformism and self-correcting policies without self-governance create chaos and catastrophes. Similarly, lawfare production is a political economy of contracts that function like commodities. Recent politics demonstrates the costly application of nuisance litigation that alters cost structures. For example, lukewarm-greenwashing and the failure of net-zero appears because the goal posts are designed to move the zero equilibrium marks.
As Paul Cockshott’s 1993 piece below suggests, more socialistic organization is necessary like not letting cartels set prices, but perhaps having a global standard price for carbon set by something like the UN. The latter is a source that one might not expect, namely the Chicago Fed.
This map shows countries (in green) where pyramid schemes are known to be illegal. en.wikipedia.org/...
Is Nature a “Central Marketing Authority” equivalent when engaging an ecological critique.…. “Towards a New Socialism is a 1993 non-fiction book written by Scottish computer scientist Paul Cockshott, co-authored by Scottish economics professor Allin F. Cottrell. “
But like all stock market bubbles, the 1920s bubble suddenly came to an end. Groucho lost everything in the crash of 1929, at the age of 40.
Tanuro in 2007 called for ecosocialists to examine their own commitment to the cause where:
To deserve the label “ecosocialist”—
firstly, we should banish the purely propagandist approach to ecological questions, based on a mere denunciation of capitalism. Instead, we should improve our knowledge of the problems, not only in their social but also in their scientific dimensions (the latter being partly independent of the first);
secondly, we should help to build broad mobilisations on ecological demands and learn from others. In my view, the absolute priority from this point of view is the building of a world mass movement in favour of social and equal solutions to stop climate change (and adapt to it because it is already here). Nonetheless, the challenge of climate change illustrates the adequacy of Marx’s concept: capitalism destroys the climate because its logic of accumulation unbalances the exchange of matter through a huge saturation of the carbon cycle.
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The “biggest market failure ever seen” should be addressed not as increased neoliberal solutions, but rather, that (a)nother response to climate change is necessary, a social and equitable one, with less market and more regulation, less competition and more collaboration. It implies the personal commitment of each of us, especially in the developed countries. It implies public initiatives to insulate dwellings, free publicly-owned passengers transport, public rail transportation instead of private road transportation, a battle against privatisation in the energy sector, massive deployment of renewables independently of the costs, nationalisation of renewable energy sources, land reform and the cancellation of the Third World debt, cancellation of unnecessary and energy-intensive activities like the production of weapons, etc.”
In his dissertation, Carbon markets and the production of climate change: Appropriating, commodifying and capitalising nature, Gareth Bryant states that “Case studies of carbon allowance and credit networks associated with energy utilities RWE and E.ON illustrate the potential for the largest polluters to exploit unevenness in the production of climate change by trading transformative for marginal climate actions. (2016)
Emissions trading works by setting a quantitative total limit on the emissions produced by all participating emitters. As a result, the price automatically adjusts to this target. This is the main advantage compared to a fixedcarbon tax. Under emission trading, a country or a polluter having more emissions is able to purchase the right to emit more. The entity having fewer emissions sells the right to emit carbon to other entities. As a result, the most cost-effective carbon reduction methods would be exploited first. ETS andcarbon taxesare a common method for countries to meet theirpledgesunder theParis Agreement.
CarbonETS are in operation inChina, theEuropean Unionand other countries.[2]However, they are usually not harmonized with any definedcarbon budgets, which are required to maintainglobal warmingbelow the critical thresholds of 1.5°C or "well below" 2°C. The existing schemes only cover a limited scope of emissions. TheEU-ETSfocusses on industry and large power generation, leaving the introduction of additional schemes for transport and private consumption to the member states. Though units are counted intonnesofcarbon dioxide equivalent, other potent GHGs such asmethane(CH4) ornitrous oxide(N2O) fromagricultureare usually not part these schemes yet. Apart from that, an oversupply leads to low prices of allowances with almost no effect on fossil fuel combustion.[3]In September 2021, emission trade allowances (ETAs) covered a wide price range from 7€/tCO2in China's new national carbon market[4]to 63€/tCO2in the EU-ETS.[5]Latest models of thesocial cost of carboncalculate a damage of more than $3000 per tonCO2as a result of economy feedbacks and falling globalGDPgrowth rates, while policy recommendations range from about $50 to $200.[6]
The term "bubble", in reference tofinancial crisis, originated in the 1711–1720 BritishSouth Sea Bubble, and originally referred to the companies themselves, and their inflated stock, rather than to the crisis itself. This was one of the earliest modern financial crises; other episodes were referred to as "manias", as in the Dutchtulip mania. The metaphor indicated that the prices of the stock were inflated and fragile – expanded based on nothing but air, and vulnerable to a sudden burst, as in fact occurred.
Some later commentators have extended the metaphor to emphasize the suddenness, suggesting that economic bubbles end "All at once, and nothing first, / Just as bubbles do when they burst,"[1]though theories of financial crises such asdebt deflationand theFinancial Instability Hypothesissuggest instead that bubbles burstprogressively,with the most vulnerable (most highly-leveraged) assets failing first, and then the collapse spreading throughout the economy.
Prices are messages about conditions in the economy, and provide motivation for acting on this information.
People take advantage of rent-seeking opportunities when competitive markets are not in equilibrium, often profiting by setting a price different from what others are setting.
This rent-seeking process may eventually equate supply to demand.
Prices in financial markets are determined through trading mechanisms and can change from minute to minute in response to new information and changing beliefs.
Price bubbles can occur, for example in markets for financial assets.
Governments and firms sometimes set prices and adopt other policies such that markets do not clear.
Emissions trading is spreading globally with 8 systems currently in force and a further 4 scheduled for implementation and 9 being considered: Emissions trading schemes (ETS) have been established in multiple countries around the world as a market-based solution for reducing carbon emissions. An ETS is a form of cap and trade since the program caps the total amount of emissions while allowing the emitting entities to trade emission allowances between them. This market-based approach has proven to be very successful at reducing emissions at the lowest cost. The cap on total emissions is reduced each year to provide environmental certainty of achieving emission reduction goals while allowing the market to set the price of CO2 that can be traded between participants. Conversely, a tax ensures the the price of carbon is certain whilst allowing the quantity emitted to fluctuate.
Typically, emitting companies must purchase (or be allocated) carbon allowances, with each allowance normally allowing the holder the right to emit 1 tonne of CO2 emissions, and these rights able to be traded freely. There are a number of emissions trading systems around the world and multiple additional countries are preparing to launch their own schemes. The EU ETS was the world’s first and is by far the largest system, covering 11,000 emitting entities in 31 countries and 1.8 billion tonnes of annual CO2 emissions. China is planning to launch its own national ETS in 2019 and this would then be the largest in the world. The International Carbon Action Partnership (2018) provides a summary of current and planned schemes around the world. www.carbon-cap.com/...
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Commodities traders see carbon becoming a bigger market than crude oil https://t.co/4stRQZzLiK
Our preferred policy solution to the climate crisis is to put a price on carbon pollution and allocate the proceeds directly to the people via a monthly dividend check, to spend as they see fit. Since 2009, Citizens’ Climate Lobby (CCL) USA has been advocating for this policy under the name “Carbon Fee and Dividend” and now it also known as “Climate Income”.
Climate Income is the policy that climate scientists and economists alike say is the best first-step to reduce the likelihood of catastrophic climate change from global warming. Adopting carbon fee and dividend will solve most of the climate crisis, reduce inequality, improve health and have a positive impact on gender inequality.
"Polluters buy up emissions reductions known as carbon credits to balance out their own emissions...This might mean planting new trees, or building a solar project. The trouble is whether those are actually new reductions or painting green a business model that hasn’t changed."https://t.co/mF5ZqndRek
….Speaking at an event last week at the International Emissions Trading Association, or IETA, pavilion, current and former BP executives had something on their minds other than a free lunch: bad press.
They were gathered to discuss the voluntary carbon market, the system that underpins the rash of “net-zero” commitments that companies and governments have released in the last year. The theory is pretty simple: Polluters buy up emissions reductions elsewhere—known as carbon credits—to balance out their own emissions at home, whether now or in the future. This might mean planting new trees, purchasing swathes of land to keep them from being logged, or building a solar project. The trouble is whether those are actually new emissions reductions or painting green a business model that hasn’t fundamentally changed. Ananalysisby the nonprofit ActionAid, for instance, has found that Royal Dutch Shell’s net-zero commitment entails a land area to plant trees that would be three times the size of The Netherlands. Needless to say those trees haven’t been planted, and the path to doing so is neither clear nor uncomplicated.
Investigative reporting fromBloomberg,ProPublica, andThe Guardian,among others, has cast doubt on the integrity of the products being traded in carbon markets, showing that certain credits are actually adding to greenhouse gas emissions rather than subtracting from them or balancing them out. For instance, ProPublica and the think tank Carbon Plan found that through accounting tricks, and by packaging tracts of land that didn’t need to be protected, California’s carbon-offset program had greenlit emissions equivalent to putting 8.5 million cars on the road. Such revelations place corporate net-zero commitments in a vulnerable spot. If their credits really are “meaningless,” as Bloomberg has noted, then companies will have to ramp down emissions much more quickly.
That tension was in the room at the IETA panel last week. “As this market scales up, the attacks will come even more so from the Greenpeaces,Guardian,” said attendee Ed Hewitt, who used to work at BP and now is the managing director of “natural climate solutions” for Respira, a company that looks to enlist capital markets in carbon-offset markets and conservation efforts. “I used to loveThe Guardian,but it’s a powerful source of spreading a certain agenda. I genuinely think it’s the biggest risk to our sector, because once people … if there’s more reputational risk associated with buying carbon credits for [corporations] instead of good news for doing it, then no one’s going to do it, and the whole thing’s going to go pop.”
Swartz and Abrahams have plenty of company at COP26. There aremore delegatesfrom the fossil fuel industry than from any country. According to ananalysisof the COP26 attendance list by the nonprofit Global Witness,503 badges have been issued toattendees with links to fossil fuel companies.
“Instead of really transforming to cut emission, most of these net-zero pledges contain massive amounts of carbon offsetting, which means corporations can carry on with business as usual and claiming that they are carbon neutral,” ActionAid executive director Teresa Anderson told me in Glasgow. “There isn’t enough land on the planet to meet all of the carbon-offsetting targets announced by these thousands of companies. But there is desperation.”
Abrahams had spoken earlier about the challenges posed by critical news coverage. “The risk of acting and being criticized for not following somebody’s view of the rules is so high,” Abrahams said. “Especially when you’re a large company and falling within the large emitter category. So this is really problematic, and you’ve seen a lot of this.” She explicitly referencedcoverageof “carbon-neutral” liquefied natural gas, which fossil fuel companies have flocked to in recent years. BP has beendevelopingits own allegedly carbon-neutral LNG offset project in its Asia-Pacific region. “I would argue,” said Abrahams, “that there’s probably a number of those emissions” from carbon-neutral LNG, highlighted by reporters “that have been according to what are the rules of the road right now. Yet it’s raised a lot of criticism, and nobody wants that, especially when you’re trying so hard to do the right thing.”
The scrutiny reporters have applied to carbon offsetting comes at a sensitive time for major polluters. As their social license to operate as major oil and gas producers has waned, many have leaned on investments in clean energy or carbon offsetting as a means of cleaning up their image. To hear panelists tell it, a similar threat to what they face on fossil fuels now faces their plan to keep them going: They don’t want offset systems to lose their social license to operate, and they don’t want the public to turn against offsets. The sheer number of net-zero commitments that have been announced in the last year, moreover, heralds a vast expansion of offset markets, at a time when the ability of such projects to help reduce emissions faces additional scrutiny.
Swartz, at the IETA event, compared the growth of carbon offsets to—of all things—a pyramid.“We’re building a pyramid,” he said, “but we’re still trying to cover the stones. So we know that it’s coming, and we need it. But we just want to make sure that it looks good after you’ve built it, and while we’re building it, too.” What carbon offsets actually look like, in other words, remains subject to Wild West standards and regulations. But corporations are planning to grow demand for them as fast as they can in any case.
Recognising large-scale environmental destruction as an international crime would bring two corollary effects. First, laws provide clear, long-term guidelines for financial decision-making and international aid. That something is morally questionable usually doesn’t hinder investment. Laws provide boundaries and sanctions for investment, as no company or organisation – such as the World Bank – would want to invest in something potentially criminal. Second, laws can lead to a shift in social norms. Criminalising ecocide at the highest level would bring public, corporate and governmental understanding that the protection of the biosphere – the thin and fragile layer of life that supports our societies – must be a top priority for all nations.
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Ecocide must be listed alongside genocide as an international crime
<< Still not entirely sure about this but it is certainly a debate worth having https://t.co/gNqnyMMTUK
— Anti-Fascism & Far Right 🥤 (@FFRAFAction) June 22, 2021
