Carbon Markets: Rehabilitationg the Egalitarian Objection

Abstract

While carbon markets have been increasingly scrutinized for their moral merits, the egalitarian critique of carbon markets has been largely neglected. Many admit that emission-trading schemes (ETSs), in their actual form, reproduce pre-existing inequalities. However, this is often seen as a contingent, easily-fixed problem, as carbon markets can fulfill egalitarian goals as long as the initial allocation of permits is made according to an egalitarian ideal. The goal of this paper is to challenge this idealistic rejection of the egalitarian critique of carbon markets by underlying seven structural features of carbon markets that explain why, in all likelihood, ETSs will always reproduce pre-existing inequalities (without even curbing carbonemissions). First, carbon markets are bound to cover mainly the activities of wealthy and powerful corporations. Second, carbon markets are excessively complex and their operations typically lack transparency. Third, information asymmetries persist between public servants and private firms regarding ETSs. Fourth, target setting is a political, highly partisan process. These four features give private firms the power to manipulate at their advantage the rules of a carbon market. Three other features explain why the motivations of agents under an ETS will most of the time be corrupted: carbon markets trivialize the harm done by carbon emissions; they alter our perception of nature’s value; and they crowd-out our intrinsic motivations. Thus, influential private firms will have the power and willingness to bend carbon markets at their advantage.