Carbon credits, offsets are false solutions to climate change – Experts

Suleiman Hassan, environment minister

It is well documented that carbon markets have failed spectacularly in achieving their environmental

objectives and that many carbon offset projects have a devastating social impact.

  In spite of this

evidence, carbon markets remain the main policy tool to address climate change in Europe, based on the misguided hope that they will work “once the price is right”.

Yet, beyond the well-known issues of excess permits and frauds, it has also been demonstrated that carbon markets have major conceptual flaws that cannot be fixed, such as the inability to provide a

reliable price signali or the fact that the climate impact of offset projects is not calculable.

When carbon becomes a new asset class for investors, carbon markets will be much more vulnerable

than traditional financial markets to crashes and abrupt losses of confidence from investors, with a high risk of contagion to other asset classes and the wider economy.

Yet, new carbon markets are being created such as CORSIA, the carbon offset market for civil

aviation emissions, or the one mooted under article 6 of the UN Paris Agreement to be finalised at

COP25.

   These irremediable issues mean that carbon markets will never meet their environmental

and social objectives and should be abandoned for more robust alternatives.

Mandating a progressive phasing out from fossil fuels complemented by targeted tax policies aimed

at ensuring a fair sharing of the costs of a transition away from fossil fuel dependence would be far

simpler, fairer and incomparably more effective in addressing climate change. Binding regulations

have proven their effectiveness time and again, notably to address the hole in the ozone layer,

prevent river pollution by effluents or reduce lead emissions from cars.

   Such a plan would of course

be progressive and would mean finally starting to act, instead of continuing with the current inaction

fostered by carbon markets.

Binding environmental regulations would also incidentally make finance sustainable with regards to

climate change, as the risk-adjusted returns of all companies and economic activities would

automatically adjust to the new regulations and capital would shift accordingly.

   In turn, these

questions the current political focus softening financial regulation in exchange for a greening of bank balance sheets.

As carbon markets continue to prove their ineffectiveness while the incidence and amplitude of

natural catastrophes increase and renewable energy prices continue to drop, public pressure is likely to make the current focus on carbon markets, as the central pillar of EU climate policy, gradually

become politically untenable. Wasting another decade would only make the transition more abrupt with a far worse impact on climate and jobs.

We therefore call on policy makers to stop supporting new doomed carbon offset markets, notably at the COP25.

2

For more information read : ‘50 shades of green – the rise of natural capital markets and sustainable

finance’ available at www.greenfinanceobservatory.org

List of signatories:

Frédéric Hache, director, Green Finance Observatory

Nicolas Bouleau, Emeritus professor, Ecole des Ponts ParisTech

Gaël Giraud, Research Director CNRS, Professor Ecole Nationale des Ponts et Chaussées Paris Tech

Laurence Scialom, Professor of Economics, University Paris West

Jézabel Couppey-Soubeyran, Lecturer in Economics, University Paris 1 Panthéon-Sorbonne

Esther Jeffers, Professor of Economics, University of Picardie

Dominique Plihon, Emeritus professor, University Paris 13 Sorbonne Paris Cité

Clive L. Spash, Chair of Public Policy and Governance, WU Vienna University of Economics and

Business

Richard B. Norgaard, Professor Emeritus of Energy and Resources, University of California, Berkeley

Inge Røpke, Professor of Ecological Economics, Aalborg University, Copenhagen

Arild Vatn, Professor of environmental sciences, Norwegian University of Life Sciences

Ewald Engelen, Professor of Financial Geography, University of Amsterdam

Steve Rayner, James Martin Professor of Science & Civilisation, Institute for Science, Innovation &

Society, Professorial Fellow, Keble College, University of Oxford

Barbara Harriss-White, FAcSS, Emeritus Professor of Development Studies, Oxford University,

Emeritus Fellow of Wolfson College, Oxford

Kathleen McAfee, Professor, International Relations and Environmental Policy, San Francisco State

University

Patrick Bigger, Lecturer (Assistant Professor) of Economic Geography, Lancaster University

Nathalie BERTA, Lecturer in Economics, University of Reims, Champagne-Ardenne

Gert Van Hecken, Assistant Professor (tenure track) in International Cooperation and Development,

Institute of Development Policy (IOB), University of Antwerp

Ozgur Gun, Lecturer in Economics, University of Reims, Champagne-Ardenne

Benjamin Neimark, Senior Lecturer in Human Geography and Political Ecology, Lancaster University

Sarah Knuth, Assistant Professor in the Department of Geography, Durham University

3

Erik Swyngedouw, MAE, Professor of Geography, University of Manchester

Daniela Gabor, Professor of Economics and Macro-Finance, UWE Bristol

Patrick Bond, Distinguished Professor of Political Economy, University of the Witwatersrand School

of Governance, Johannesburg

Tor A. Benjaminsen, Professor of Political Ecology, Norwegian University of Life Sciences (NMBU)

Vincenzo Bavoso, Lecturer in Commercial Law, University of Manchester

David Bassens, Assistant Professor, Vrije Universiteit Brussel

Irene van Staveren, Professor of Pluralist Development Economics, ISS, Erasmus University

Rotterdam

Gary Dymski, Professor of Applied Economics, Leeds University Business School

Charles Dannreuther, Lecturer in European Political Economy, School of Politics and International

Studies, University of Leeds

Philip G. Cerny, Professor Emeritus of Politics and Global Affairs, University of Manchester (UK) and

Rutgers University (USA)

Joscha Wullweber, University of Kassel

Nina Haerter, PhD researcher, Vrije Universiteit Brussel

Denis Dupré, Professor of Finance and Ethics, University Grenoble-Alps

Manuel B. Aalbers, Professor of Geography, KU Leuven, Belgium

Jesus Ferreiro, Professor of Applied Economics, University of the Basque Country UPV/EHU

Jens Friis Lund, Professor of Political Ecology, University of Copenhagen

Aurore Lalucq, Co-director, Veblen Institute

José Castro Caldas, Economist, researcher at the Centre for Social Studies, Coimbra University,

member of the Portuguese National Council of the Environment and Sustainable Development

Gilles Raveaud, Lecturer in Economics, University Paris 8 – Saint-Denis

Professor Peter Newell, Department of International Relations, School of Global Studies, University

of Sussex

Antoine Henrot, Professor of Mathematics, Ecole des Mines de Nancy, University of Lorraine

Thomas Lagoarde-Segot, Economist, KEDGE Business School and SDSN France

4

John R Porter, Professor of Climate and Food Security, University of Montpellier SupAgro, University

of Copenhagen, University of Greenwich, UK, Lincoln University, New Zealand

Peter Dietsch, Professor, Director of the Economics and Ethics theme, Université de Montréal

Malcolm Sawyer, Emeritus Professor of Economics, Leeds University

Andrea Lagna, Lecturer, School of Business and Economics, Loughborough University

Peter Karnøe, Professor | DIST – Center For Design, Innovation, and Sustainable Transition,

Copenhagen

Susse Georg, Professor, Aalborg University, Copenhagen

Genevieve Azam, Honorary Lecturer in economics, University Jean Jaurès, Toulouse

Elisa Van Waeyenberge, Senior Lecturer in economics, SOAS University of London

Kobil Ruziev, Associate Head of Department (Economics Programmes), Bristol Business School,

University of the West of England

Jan Kregel, Professor of Finance and Development, Tallinn University of Technology, director of

research, Levy Economics Institute, New York

Marco Veronese Passarella, Lecturer in Economics, Leeds University Business School

Joshua Farley, Professor, Community Development and Applied Economics Fellow, Gund Institute for

Ecological Economics, University of Vermont

Karen Maas, Academic Director, Impact Centre Erasmus, Erasmus University Rotterdam, Professor of

Accounting & Sustainability, Open University

Eric Clark, Professor of Human Geography, Lund University

Servaas Storm, Senior lecturer in Economics, Delft University of Technology, Delft, The Netherlands

Andrew Baker, Faculty Professorial Fellow and Professor in Political Economy. University of Sheffield

Enno Schröder, Assistant Professor, Delft University of Technology, Delft, The Netherlands

Paul Langley, Professor of Economic Geography, Durham University

Jon Cloke, Senior Researcher Geography Department, Loughborough University

Ismail Ertürk, Senior Lecturer in Banking, Director for Social Responsibility and Engagement, Alliance

Manchester Business School

Giorgos Kallis, ICREA Professor, Social & Behavioural Sciences, Universitat Autònoma de Barcelona

(UAB)

5

Matthias Schmelzer, , Konzeptwerk Neue Ökonomie and Postdoctoral researcher at the University

Jena

Oliver Picek, Researcher, European Trade Union Institute

Grégoire Wallenborn, Physicist, Professor of the History of Sciences, Université Libre de Bruxelles

Fabrice Flipo, Professor of Social and political philosophy and Epistemology, Institut Mines-Télécom

Pablo Servigne, Independant Researcher, Agronomist and Doctor of Sciences

Rémi Beau, Associate Researcher in Philosophy, Université Paris 1 Panthéon-Sorbonne.

Matthieu Meerpoël, Lecturer in Law, Université Catholique de Lille

Ewan Sonnic, Research Associate in Geography and Spatial Planning, Ecole Nationale Supérieure

d’Architecture de Bretagne

Julien Vastenaekels, PhD candidate and teaching assistant in environmental sciences, Université libre

de Bruxelle

Elena Hofferberth, Postgraduate Researcher, Leeds University Business School

Joerg Bibow, Professor and Chair of Economics, Skidmore College, Saratoga Springs, NY

Michel ROCCA, Professor of Economics, Université Grenoble Alpes

Sophie Béreau, Professor of Finance and quantitative methods, University of Namur

Dominique Bourg, Professor, Institute of Geography and Sustainability, University of Lausanne

Sophie Swaton, Lecturer, Institute of Geography and Sustainability, University of Lausanne

Sébastien Mabile, Doctor in Public Law (thesis in environmental law), lawyer at the Paris Bar

Victor Lefèvre, PhD student in Philosophy of Ecology, Paris I Panthéon-Sorbonne University

Emmanuel Prados, Researcher in Applied Mathematics, Computer Science and Computational

sustainability, Director of the STEEP research group at INRIA, Grenoble

Elke Pirgmaier, Research Fellow in the School of Earth and Environment, University of Leeds

Aviel Verbruggen, Professor emeritus Energy and Environmental Economics, University of Antwerp

Ivan Ascher, Associate Professor of Political Science, University of Wisconsin-Milwaukee

Paola D’Orazio, Postdoctoral researcher, Chair of Macroeconomics, Faculty of Economics and

Management, Research Fellow, Research Department Closed Carbon Cycle Economy, Universität

Bochum

6

Peter Sturm, Research Director, Deputy Scientific Director for Perception, Cognition and Interaction,

Inria Grenoble Rhône-Alpes

François Gemenne, FNRS Senior Research Associate, University of Liège, Executive Director of the

Interdisciplinary Research Program “Earth Policy”, Sciences Po

Ivar Ekeland, FRSC, Former President, University of Paris-Dauphine, Former Director, the Pacific

Institute for Mathematical Sciences

Pierre-Yves Longaretti, Researcher, CNRS, Institute of Planetology and Astrophysics Grenoble (IPAG),

Sustainability Team, Territories, Energy, Economy, Environment and Local Policies (STEEP), INRIA.

Julien Milanesi, Senior Lecturer in Economics, University Toulouse 3, Researcher at the CERTOP

laboratory, TERNOV research axis

i Carbon markets rely on the idea that a rising price of the permits to pollute will incentivise polluters to curb their

emissions of greenhouse gases and switch from fossil fuel to renewable technologies. Yet It has been demonstrated that

the wild fluctuations in prices make it impossible to observe any trend in prices and derive any useful information enabling

7

industries to plan a technology switch. The inexistence of a price signal means that carbon markets will never be able to

incentivise a change in technology and behaviour.

admin:
Related Post