ABSTRACT
Climate politics are increasingly conducted by, through and for markets. Business and financial actors have become central in the construction and management of an elaborate and increasingly intermeshed system of climate governance. Central to these are a series of markets, constructed to facilitate investment in carbon abatement and to create incentives for states and firms to limit their carbon emissions. Emissions trading systems, the Kyoto flexibility mechanisms, voluntary carbon offset projects and projects by investors to get other companies to disclose their carbon emissions are the key elements in this governance system. All amount to the creation of what is sometimes called the carbon economy; they all subject climate change to a market logic. They do this by allocating property rights to carbon emissions, by getting firms to incorporate their carbon emissions into their routine calculations of profit and risk, and by subjecting firms to a logic of transparent information by which investors and consumers can make decisions through the market that are compatible with the goal of reducing greenhouse gas emissions. This way of responding to climate change is increasingly hegemonic, gaining
a taken-for-granted character. Two things are worth noting, though, which we address in this chapter. First, that as with all forms of hegemony, it is highly contested: many people object fundamentally to the idea of ‘commodifying the atmosphere’, and those involved in carbon markets thus have to work hard to legitimize their practices. This contestation and response is fundamental to the politics of the carbon economy, as we show later on. Second, the hegemony of these ways of dealing with climate change (or any other environmental problem) is only a recent phenomenon. Had climate change become seen as an acute problem in 1950 rather than from the late 1980s onwards, anyone proposing emissions trading as the principal means to deal with it would have been subject to ridicule. Even in the late 1980s, as the international community was responding to ozone depletion, market-based policies only played a minor role in the response. The rise of the carbon economy, as one manifestation of a broader trend towards the ‘marketization’ of environmental governance (Newell 2005), evolves alongside and is a product of the entrenchment of neo-liberal politics throughout the 1990s (Harvey 2005).
