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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

Carving new commodities out of Nature: Clarifying conceptual issues & overview of initiatives

This presentation was given by Jutta Kill at the European Cross Networking Meeting on the Global Crises in Brussels on 3 May 2012. It describes how Ecosystem financing can be seen as the creation of additional fictitious commodities out of those parts of Nature that have until now not been viewed, considered, treated and / or exchanged as commodities. These possible new "commodities" include intellectual property, carbon, species, ecosystem functions, natural beauty and water. 

Banking on carbon markets: Why the European Investment Bank got it wrong in the fight against climate change

This briefing provides an overview of the publicly documented involvement of the European Investment Bank (EIB) in support of failing carbon markets. It is based on a report by the organisations Counter Balance and Campagna per la riforma della banca mondiale (CRBM). The original report is available here.

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PDF iconBanking on carbon markets.pdf405.89 KB

Why carbon markets will not deliver for Southern governments, forests and people

Many governments believe that carbon trading will provide substantial funding to protect or sustainably manage forests in their countries via proposed schemes to Reduce Emissions from Deforestation and Degradation (REDD). This briefing, signed on to by 28 organisations explains why carbon markets will not deliver for Southern governments, forests and peoples.
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PDF iconcarbonleaflet_25nov.pdf326.76 KB

An end to forest offsets

This manual was put together by the partners of the Grundtvig Learning Partnership “Forests and climate protection – merging topics in environmental education”. It provides background information for developing new approaches in environmental education focusing on the intricate relation of forests and climate. For fully footnoted and referenced information about the problems with carbon trading and offsets please see Designed to fail.

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PDF iconAn-end-to-forest-offsets-final.pdf355.36 KB

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