Lesson from EU: We Can't Finesse Nature With Accounting Tricks

Practical experience with carbon markets in the European Union raises a critical question: Will such systems ever work?  Backers of these markets, which involve setting limits on greenhouse gases and then allowing companies to buy and sell emission permits, see the approach as one of the cheapest and most effective ways to control the gases in advanced economies. Yet in Europe, which created the world’s largest carbon trading market three years ago, early evidence suggests the whole approach could fail.  


Easy fix.
Full Auction of Permits, No Offsets, Tradable, Bankable

And ideally use the proceeds to
1) Help out the low income people
2) Fund carbon fixation treaty projects enmasse Government-to-Government (like for instance funding huge swaths of protecting the Tropical RainForest)
3) Fund R&D for low carbon energy
4) Fund Financing for low carbon energy
5) Or whatever is needed to bribe Senators to vote for the thing

If anything, the whole purpose of a carbon pricing system isn’t to encourage green methods, it’s simply to discourage black methods.


On the side of actually encouraging green methods, specifically with renewable energy.

The Germany style FIT (Feed In Tariff)
Regardless what Economist you ask provides the largest/fastest expansion of renewables.
(Reducing the Risk of Investment)

Where as emissions trading “Renewable Energy Credits”, for the electricity market tends to favor larger market players, and often results in non-competitive markets.
(Attempting to reduce the capital cost of Investment)