TUED Working Paper #6: Carbon Markets After Paris

Trading in Trouble

TUED Working Paper #6: Carbon Markets After Paris2019-06-30T23:21:41+00:00

Sean Sweeney

March 2016

The need to “put a price on carbon” in order to drive and incentivize low-carbon investment patterns and industrial practices has stood at the heart of neoliberal climate policy since the early 1990s. It is time to take a critical look at this core policy commitment, particularly emissions trading, and how unions have responded to it.

A lot is expected from carbon markets in the years ahead. The 2015 Paris Agreement has endorsed the expansion of carbon markets via the so-called “Sustainable Development Mechanism” and the Intended Nationally Determined Contributions (INDCs) that have been incorporated into the agreement. Moreover, a full ten years has passed since the 2005 launch of the European Union Emissions Trading Scheme (EU ETS), the largest of its kind in the world. Upon its launch, the scheme immediately became the designated flagship of what was expected to become, over time, a much larger and perhaps global carbon market. Similarly, 2016 is the tenth anniversary of the landmark Economics of Climate Change, known as the Stern Review, which also identified carbon trading and carbon pricing in general as perhaps the primary policy mechanism to reduce emissions. So enough time has passed to examine the hopes and expectations of ten years ago in the light of what has actually been achieved since.

In this context, an examination of trade union debates around this issue is needed. These debates have taken place mostly (but not entirely) within the European Union, but they could be a precursor to a broader trade union discussion if, as seems likely, there are attempts to expand carbon markets in the years ahead. There is every possibility that concerns about “carbon leakage” — which have been openly expressed by unions for over a decade — could conflict with trade union efforts to urge governments to raise their level of ambition in terms of reducing emissions.

Download the full paper here.