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What is carbon trading?

Carbon trading is the process of buying and selling permits and credits to emit carbon dioxide. It has been a central pillar of the EU’s efforts to slow climate change. The world’s biggest carbon trading system is the European Union Emissions Trading System (EU ETS). It is beset with problems and corruption and yet countries such as Brazil and China continue to pursue carbon trading as a way to tackle rising emissions.

Carbon trading is increasingly criticised, not least because carbon dioxide emissions in industrialised countries are not declining at the necessary rate to avert catastrophic climate change.

For more information about carbon trading, see Fern’s beginners guide Trading Carbon. How it works and why it's controversial, or the 20 page version 20 page version Designed to fail.

Fern and many scientists, economists and NGOs believe that carbon trading is a dangerous distraction from the need to end fossil fuel use and move to a low carbon future. We do not have time to wait for a high price on carbon: we must shift to a low carbon energy, agriculture, transport and industrial world now. The best way to do this is through direct regulation.

Fern’s initial interest in carbon trading came about because trees were seen as a way of offsetting carbon cheaply, while simultaneously providing money to protect trees. What are offsets explains why you can never offset carbon by protecting or planting trees. There is also no evidence that carbon trading has lived up to the promise of providing money.

Despite the flaws inherent in pollution trading, the concept continues to appear in proposals to reduce environmental harm. For more information visit our campaign on biodiversity offsetting.

Campaigns: 

Most recent publications

Comment on the COP21 - a forest perspective

Forests barely feature in the draft text, but runaway climate change could devastate the forests which more than a billion people directly rely on for their survival. Forests also play a crucial role in regulating the climate. Whichever way you look at it, the outcome of the Paris agreement is also an outcome for forests.
 
Kate Dooley  is in Paris, tracking the developments in the UN climate summit. She has written this overview of the talks from a forests perspective for Fern. Check back later in the  week for  further perspectives from Kate and other contributors.

New research shows risk of including land use and forests in EU’s emissions target

Two days before the European Union closes its consultation on the role that land use, land use change and forestry (LULUCF) should play in EU climate effort, new research reveals that including this sector in emissions reductions plans would cause havo

Impacts on the EU 2030 climate target of including LULUCF in the climate and energy policy framework

The European Union (EU) has a target to reduce emissions by at least 40 per cent by 2030. This is an economy-wide target and therefore includes the Land Use, Land Use Change and Forestry (LULUCF) sector. This study looks at how to integrate LULUCF into the EU’s 2030 Climate and Energy Framework.

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PDF iconLULUCF_2030_revised_b696.06 KB

Fern’s response to EU LULUCF Consultation

Fern's response to this consultation concludes that the challenge of limiting global warming to two degrees is so great that effort should be made in all sectors. By maintaining Land Use, Land Use Change and Forestry (LULUCF) separately, the EU avoids reducing its ambition and gives itself the opportunity to create real ambition to maintain carbon stocks and reduce emissions in LULUCF.

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PDF iconLULUCF consultation_Fern.pdf243.17 KB

Who takes the credit? REDD+ in a post-2020 UN climate agreement

This briefing note addresses the risks that could arise if Reduced Emissions from Deforestation and forest Degradation (REDD+) were to be included in an international climate agreement. Specifically, it looks at ‘double-counting’, where two countries claim the same emission reduction.

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PDF iconWho takes the credit.pdf749.05 KB

Double-counting forest emissions threatens global climate agreement

As officials from more than 190 nations gather in Bonn to prepare the ground for a future global climate agreement, new research draws attention to the risk that accounting for tropical deforestation could mean actual emissions are higher than those reported to the UN.

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PDF iconWho takes the credit_Final.pdf307.17 KB

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