by Emanuele Leonardi*
Market fundamentalism must be reversed if a politically sound solution to climate change is to be found. From this perspective, Cop 21 will not deliver.
As expected, there was much talk about the ongoing Cop 21 in Paris. Most of it concentrated on the geopolitical dimension of climate negotiations: for example, Jason Box and Naomi Klein stress the link between global warming catastrophic effects and wars. On a different but interrelated level, officials from the Global North accused China and India to block the process, whereas Chinese and Indian representatives stroke back arguing that the Global North is not taking into account its historical responsibility with regard to carbon emissions. Less discussed, and yet equally important, is the issue of climate governance through carbon trading. The reliance on carbon markets as an exclusive policy option is connected to what I call carbon trading dogma, which is to say an extremely entrenched political belief according to which climate change, although an historical market failure (since negative externalities were not represented into prices), can be viably solved only by further marketization. New, dedicated markets mean new, peculiarly abstract commodities which, in turn, foster a new, unprecedented wave of capital accumulation. From this perspective the concept of carbon trading dogma is compatible both with Erik Swyngedouw’s post-political ‘CO2 fetishism’ and with Steffen Böhm’s Marxist ‘carbon fetishism’.
climatic stability = reductions in CO2 emissions = carbon trading = sustainable economic growth
The strength of this dogma is demonstrated not only by the insistence with which climate policy makers invested in carbon markets despite their irrelevant – if not negative – ecological impacts, but also by the increasing difficulties encountered by market actors in justifying the narratives of green economy and sustainable growth. Yet, the circular structure of the carbon trading dogma makes any alternative unthinkable: as every religious belief, the confirmation of its truth-claims is already contained in its fundamental assumption: since there is no effective politics outside of the market, global warming is solvable only in so far as it is possible to make a profit out of it. ‘Climate stability equals surplus value production’ is treated as self-evident truth.
Against this background, I would like to make two points: a) for the carbon trading dogma to actually work, a very specific vision of the relationship between nature and value needs to be in place; and b) the productive failure enacted by carbon trading, namely the constitutive tension between its (putative) environmental goal and its (actual) monetary means, is the key to understand why it is still operational in spite of its ecological irrelevance.
As for the first point, it is useful to recall that the environment as a political issue hits the public arena in the 1960s and 1970s due to destabilizing antagonism on the part of ecological movements. In other words, capital originally perceives it as a block to valorization, as an additional cost for companies or, to use André Gorz’s appropriate terminology, as a crisis of reproduction. Nature, which used to be conceived as either free and infinite source of raw materials – at the beginning of the economic process – or as an equally free and infinite garbage bin – at its end – suddenly became scarce. The controversial notion of sustainable development was formulated in the 1980s precisely to politically deal with this crucial issue. In fact, its main tenet is that profits and environmental preservation can go hand in hand. More radically, the emergence of the green economy rhetoric on the 90s and 2000s represented a capitalist attempt to overcome the crisis of reproduction by incorporating the environmental limit as a new terrain for accumulation and valorization. Not only growth and environmentalism can be compatible; the latter is actually a key driver of the former. To grasp this passage from nature as limit to value to nature as driver of value it is sufficient to consider the historical trajectory of the European Union environmental policy: whereas the first Environmental Action Plan (1973-1977) was based on the so-called command and control approach, aimed at fixing ecological nuisances affecting industrial processes, the following plans – and in particular the Fourth (1987-1992) – endorse a pre-emptive approach in which the main policy tools are economic incentives and the fundamental goal is to directly integrate ecological objectives within industrial production. Progressively, environmental protection ceases to be seen as a necessary evil to become an opportunity for business. Neither the green economy nor the pre-emptive approach to environmental policy have halted the multiplication of ecological harms or the rise of carbon emissions. Yet, despite all this, they still represent the discursive background against which carbon trading can be properly assessed and critiqued.
To introduce the second point, let me briefly define carbon trading in a slightly more technical way. The starting point is the Kyoto Protocol (KP), signed during Cop 3 in 1997. The KP is the first legally binding agreement on climate change and provides that the 37 Annex I countries (or the so-called developed nations) commit themselves to a reduction of six GHGs (5.2% on average in the 2008-2012 period, using 1990 as a baseline year), and all members (including Annex II countries, i.e. the so-called developing nations) give general commitments. Although the KP is intended to achieve emissions reductions through a variety of approaches, its crucial innovation is carbon trading, namely the idea that allocating and exchanging carbon commodities is the most efficient solution to the climate crisis. In fact, under the powerful political pressure exercised by the US delegation – led by then Vice-President Al Gore – the parties agreed to structure both the design and the implementation of the KP around three market-led approaches called flexibility mechanisms: i) Emissions Trading (ET): a cap-and-trade system in which governmental authorities set emission caps and private companies exchange permits and credits; ii) Joint Implementation (JI): a regulative system for exchanges amongst Annex I countries; and iii) Clean Development Mechanism (CDM), whose function is to indirectly include Annex II countries in global carbon markets. The fundamental economic rationale offered for such mechanisms is that trading emissions permits and credits on dedicated markets would simultaneously reduce the aggregate cost of meeting the targets, foster sustainable development in non-industrialized countries, and create profitable opportunities for green business.
As already anticipated, none of these desirable outcomes has materialized after ten years of full implementation (the KP entered into force in 2005). So it is legitimate to pose the following question: why are policy makers so reliant on carbon markets when empirical evidence suggests they do not work? In fact, their peculiar failure can be expressed through a curious paradox: from an environmental point of view – the one that carbon trading is supposed to satisfy (through the reduction of GHGs emissions to slow down global warming) – it is fair to say that carbon markets are useless when not nefarious. Quite simply, they do not achieve the expected results or, worse, actually prevent such achievements from occurring. Yet, from an economic perspective such markets represent a gold mine for financial traders (and often heavy polluting companies too). These markets function through a logic which is similar to the one Foucault discerned in the classical age French prison system: with Lohmann’s brilliant paraphrase, it is possible to conclude that carbon trading “has always been offered as its own remedy: the reactivation of its techniques as the only means of overcoming its perpetual failure […] the supposed failure is part of its functioning”.
Moreover, there seems to be a manifest disconnect between the environmental goal and the economical means of carbon trading. In fact, although no ecological improvement has been made, a huge amount of value has been created and then transferred to fossil fuel-intensive companies through the production of what can be called climate rent. It is probably more accurate, therefore, as well as more empowering to say that carbon trading is environmentally irrelevant, rather than claiming that it simply does not work, since its economical impact has been significant. Such friction between environmental irrelevance and rent production makes fully appreciable the profound entrenchment of the carbon trading dogma: although the ecological inconsistency of carbon markets has been empirically proved innumerable times, the assumption of a harmonic compatibility between climate stability and sustainable growth keeps orienting policy makers as well as market actors.
This is why Cop 21 could not but fail: nobody in that setting was willing to question the basics of what has been called climate capitalism. And this is also why the only solution to global warming comes from climate justice movements which are disseminated throughout the planet. As aptly argued by Steffen Böhm: “Climate justice is not something that should come after us accepting climate capitalism. A proper just climate can only be brought about if we don’t shy away from questioning the fundamental logic of carbon fetishism and the logic of the market that attempts to appropriate, commodify and financialize nature”.
The true step forward, then, is not to be found in yet another state-centred climate deal – supposedly “the world’s greatest diplomatic success”. It is, rather, a task that radical political ecologists have recognized many years ago and that climate justice movements should embrace too: that of liberating political imaginations from the status quo.
* Emanuele Leonardi is a Post-Doc Researcher at the Center for Social Studies of the University of Coimbra (CES/UC). His research interests include the intersection between the Foucauldian notion of biopolitics and the field of political ecology, the financialisation of the environmental crisis, carbon trading and climate justice movements, and job blackmail and working-class environmentalism.