This Changes Everything: Capitalism vs. The Climate

by Naomi Klein

But the biggest problem with this approach is that carbon markets have failed even on their own terms, as markets. In Europe, the problems began with the decision to entice companies and countries to join the market by handing out a huge number of cheap carbon permits. When the economic crisis hit a few years later, it caused production and consumption to contract and emissions to drop on their own. That meant the new emissions market was drowning in excess permits, which in turn caused the price of carbon to drop dramatically (in 2013, a ton of carbon was trading for less than €4, compared to the target price of €20). That left little incentive to shift away from dirty energy or to buy carbon credits. Which helps explain why, in 2012, coal’s share of the U.K.’s electricity production rose by more than 30 percent, while in Germany, as we have already seen, emissions from coal went up despite the country’s rapid embrace of renewable power.