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Carbon trading: unethical, unjust and ineffective?

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  • Simon Caney
  • Cameron Hepburn

Abstract

Cap-and-trade systems for greenhouse gas emissions are an important part of the climate change policies of the EU, Japan, New Zealand, among others, as well as China (soon) and Australia (potentially). However, concerns have been raised on a variety of ethical grounds about the use of markets to reduce emissions. For example, some people worry that emissions trading allows the wealthy to evade their responsibilities. Others are concerned that it puts a price on the natural environment. Concerns have also been raised about the distributional justice of emissions trading. Finally, some commentators have questioned the actual effectiveness of emissions trading in reducing emissions. This paper considers these three categories of objections � ethics, justice and effectiveness � through the lens of moral philosophy and economics. It is concluded that only the objections based on distributional justice can be sustained. This points to reform of the carbon market system, rather than its elimination.

Suggested Citation

  • Simon Caney & Cameron Hepburn, 2011. "Carbon trading: unethical, unjust and ineffective?," GRI Working Papers 49, Grantham Research Institute on Climate Change and the Environment.
  • Handle: RePEc:lsg:lsgwps:wp49
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    File URL: http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2011/06/WP49_carbon-trading-caney-hepburn.pdf
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    Cited by:

    1. Spash, Clive L. & Theine, Hendrik, 2016. "Voluntary Individual Carbon Trading," SRE-Discussion Papers 5206, WU Vienna University of Economics and Business.
      • Clive L. Spash & Hendrik Theine, 2016. "Voluntary Individual Carbon Trading," SRE-Disc sre-disc-2016_04, Institute for Multilevel Governance and Development, Department of Socioeconomics, Vienna University of Economics and Business.
    2. Hennlock, Magnus & Löfgren, Åsa & Sterner, Thomas & Martinsson, Peter, 2018. "Emissions Trading Subject to Kantian Preferences," Working Papers in Economics 718, University of Gothenburg, Department of Economics.
    3. repec:eee:appene:v:209:y:2018:i:c:p:8-19 is not listed on IDEAS

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