on reducing global carbon emissions

Rachel Smokler and Gary Houser are no fans of carbon cap and trade. They outline their objections in an opinion piece for CommonDreams.org.

There are two leading theories on how best to compel a reduction of global carbon emissions. The direct approach would be to levy a tax on carbon emissions. The idea behind this is to set a minimum price for pollution. Some progressives see a carbon tax as an opportunity to shift the tax burden or to increase revenues without raising income taxes.

A cap and trade system relies on market forces to reduce emissions. Every corporation whose factories emit carbon waste (essentially, every corporation) is assigned an emissions cap — an amount of carbon it is allowed to release into the air in a year. The company receives permits for this amount of carbon. A company that reduces emissions below its cap is allowed to sell the excess permits to companies that aren't able to reach their caps.

Unlike a carbon tax, a cap and trade system allows companies to profit from good environmental stewardship. This appears to be Smokler and Houser's first objection to carbon markets:

Many of these people, representing some of the most powerful institutions and industries in the world, will get together this week to see just how (and how much) they can squeeze out of the Earth's impending woes. On January 12th and 13th - within the conference rooms of the Embassy Suites Hotel in New York City - the Second Annual Carbon Summit will convene, bringing together representatives from industry, finance, government, and the corporate environmental groups.

Inside the summit, these monied interests will be enthusiastically discussing how to best take advantage of the emerging carbon markets.

I am just shocked, shocked to learn that representatives of for-profit institutions would gather to talk about making money. Who could have imagined such a scene?

But Smokler and Houser have a much more serious objection to cap and trade:

Unfortunately, theory and practice in carbon markets simply do not jive. We have plenty of evidence that marketing carbon doesn't work to reduce emissions.

Their evidence, though, is not so plentiful as they suggest.

The EU experiment with a carbon trade system has been soundly declared a failure.

Well, yes, it has been declared a failure — by advocates of carbon taxes. When the system was introduced in 2005 officials weren't sure at what level to set the emissions caps, so they started with a level that should have been achievable by most companies. Unfortunately, since most companies finished the first year under their limits, they were not able to sell the excess carbon permits as they expected.

What's more, between 2005 and 2007, more than half of the participating nations saw a net increase in their emissions. The caps were so permissive that companies were able to release more carbon and still meet their quotas. During these two years, the E.U. as a whole increased its emissions by nearly 2 percent.

Meanwhile, global emissions increased by more than 3% each year during this span, about 6.7% over the two years. Compared to the rest of the world, the EU under the cap and trade system exhibited much better restraint on emissions increases.

Compared to the status quo, then, cap and trade can't be considered a failure in carbon reduction. And compared to a carbon tax, a cap and trade system offers the tangible benefit of having been implemented.

Nonetheless, Smokler and Houser favor the tax. Yet the strongest argument they can muster is:

The issue of justice is central to the opposition to carbon markets. Protestors on the streets in Copenhagen called for "climate justice now" and "system change not climate change". With the gross inequities that leave billions starving in dire poverty, while a small portion of humanity gobbles resources and spews greenhouse gases, it seems unlikely that marketing carbon will resolve the problems. The power structures that have created those inequities, and made such a mess of our planet must be challenged if we are to have a chance at a liveable future. We will have to address the roots of the problem.

Granted, carbon cap and trade will not solve the problems of global inequality. But what it can do is give us a non-punative way to enforce reductions in global emissions. It will leave us with an economy that is strong enough that we will have resources for tackling other problems. Overturning the existing power structures would likely lead to greater poverty all around.

Nontheless, Smokler and Houser are optimistic about the prospects for a carbon tax:

We cannot spend, or consume, or manipulate our way out of this mess; We must take account of our behavior and make the radical shifts that the problem demands. As you will see exhibited again this week in New York, there is increasingly more wisdom, knowledge, and maturity outside on the cold streets than exhibited in the warm conference rooms of the world.

But don't hold your breath. A poll by the Pew Reserach Center in October showed that 1/3 of all U.S. residents don't even acknowledge the world is getting warmer. Don't look for radical shifts of behavior here. If carbon tax advocates join climate deniers in sinking cap and trade legislation, we'll have no mechanism for curbing carbon emissions. And if we don't cut emissions soon, we're going to have a host of other problems demanding our attention.