The political economy of carbon trading
Donald MacKenzie, professor of sociology at Edinburgh University and a prominent sociologist of economics, has written an article reviewing the political economy of carbon emissions trading, available from his web-page here. The article is a gentle introduction to the history and structure of the emissions trading, for anyone reading this who is new to the subject.
“There’s a sense in which the first phase of European carbon trading was always meant as an experiment rather than as a tool of substantial emissions reductions. Over the months to come, however, the fate of the second phase (2008-12) of carbon trading will be decided – and that phase has to lead to big cuts in emissions, if the market isn’t to be judged a failure. The National Allocation Plans for the second phase, currently being considered in Brussels, again seem in general to
be over-generous, and it remains to be seen whether the political will is there to tighten them adequately.. . .
Nevertheless, if we can get the nuts and bolts of carbon trading right, and in particular find the political will to keep the caps tight enough, such trading could become a genuinely useful tool of the effort to slow global warming. We shouldn’t pretend, though, that we yet have a good grasp of the emerging political economy of carbon trading . . .”
Source: Donald MacKenzie, November 2006: “Where’s the Ratchet? The Political Economy of Carbon Trading”, essay for London Review of Books.