Carbon Markets: Inherent Limitations and Complementary Policies (Symposium‪)‬

Over the last two decades, carbon pricing--particularly the use of carbon markets--has become a prominent environmental policy option for controlling greenhouse gas emissions. Orthodox economic theory suggests that carbon markets are the least-cost method of achieving emission reductions, and governments in Europe, New Zealand, and now Australia have introduced carbon pricing schemes with faith that this will transform their economies and meet global emission targets. A number of other states and countries are also considering or developing their own national schemes including California, China, Japan, South Korea and Brazil. While the introduction of carbon pricing schemes has, without exception, involved protracted and fierce controversy, the rhetoric and motivation of both sides of the debate have been greatly clouded by special interest groups and political opportunism that have, to a large degree, crowded-out more considered critiques of the appropriateness of using a market logic to reduce greenhouse gas emissions. The purpose of this symposium has been to collect critical perspectives on the limitations of carbon pricing and carbon markets, including analyses of some of the implications of the disjuncture between the text-book model of carbon pricing and the actual schemes that emerge as compromises under various lobbying and political pressures. The symposium also addresses the role of complementary policy instruments under a carbon pricing regime--why they may be necessary and how we may successfully select the best suite of policy instruments.