Markets, especially those for ‘fictitious’ commodities, are not the simple result of the gradual extension of exchange relations but social and political constructs. This paper discusses the socio-historical development of carbon markets and their application in the EU against the background of a Polanyian ‘double movement’: the reembedding of labour, money and land into social ties in the post-war decades was followed by a ‘counter-counter movement’ in the form of transnationalisation processes in production and investment, and, particularly, the liberalisation of financial markets. The paper analyses history and procedures of the EU Emissions Trading System (EU ETS) as a climate change (CC) mitigation means and in analogy to financialisation processes. First, it outlines three methods in environmental regulation of capitalist markets: direct regulation, Pigouvian taxation and commodification or emissions trading, and then it empirically assesses the EU ETS highlighting inherent flaws such as over-allocation of certificates, carbon-price volatility and the significant bureaucracy and costs. The paper demonstrates that actual carbon markets have as yet opened up new investment opportunities particularly for finance capital and a range of new career paths but contributed next to nothing to CC mitigation. To avoid dangerous CC other policy means would need to be applied as soon as possible.
|Journal||Real-world Economics Review|
|Publication status||Published - 2014|
Subject classification (UKÄ)
- Social Work