Skip to Content

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

Forestwatch issue 141

  • Obstacles on the road to sustainable bioenergy criteria
  • Climate haggling... to be continued
  • UK timber procurement: Help shape criteria
  • The Saami Council applauds breakthrough
DocumentSize
PDF iconOPEN179.99 KB

Forestwatch issue 140

  • Ilisu dam: teetering at the edge
  • Liberia’s dubious timber concessions
  • UK Environmental Audit Committee heeded
  • EU aid: must do better
DocumentSize
PDF iconFW 140.pdf176.55 KB
PDF iconBonn II meeting update.pdf131.11 KB

Forest Watch Issue 138

  • Billions of Euros available for afforestation
  • Forest activists win prize
  • Recession+ETS=few carbon reductions in the EU
  • Adapting to climate change?
  • Republic of Congo to sign a VPA with the EU
  • Special report from the UNFCCC forest climate meeting in Bonn
DocumentSize
PDF iconFW 138.pdf259.51 KB

Forest watch Issue 137

  • Fossil Fools day 2009 targets the G20
  • India: The hidden costs of free trade
  • Natura 2000 and CEPF
  • Urging recognition of forest peoples’ rights
  • Liberia negotiations begin
  • EU calendar online
  • FERN moves to Mundo-B
DocumentSize
PDF iconFW 137.pdf246.89 KB

Forestwatch Issue 136

  • Forests in EU-China bilateral agreements
  • Liberia received praise where due
  • Closer eye on EU finance?
  • EU illegal timber proposal strengthened
  • Climate Package disappoints
  • DG ENV boss shuns offsets
  • Reducing emissions or playing with numbers?
DocumentSize
PDF iconFW 136.pdf243.52 KB
PDF iconPlaying with numbers.pdf112.95 KB

FERN submission to UK Parliament

FERN submission to the UK Select Committee on Environment, spelling out FERN's vision on forest, climate, rights and carbon trading

DocumentSize
Microsoft Office document iconOPEN76.5 KB

Pages