Abstraction, developmental failures, and financialization of carbon markets

Abstract

Carbon markets are seen as an attractive policy mechanism for states to encourage the reduction of carbon emissions through the conventional neoliberal framework. They set a price on carbon to encourage polluters to reduce emissions, while providing flexibility mechanisms in the form of tradable credits and offsets. This paper argues that instead of promoting real emissions reduction, carbon markets allow polluters to avoid reducing emissions through the abstraction of reduction methods and the use of offsets that have negative impacts on the global South, while enabling a market for carbon-based financial products that create the conditions for another economic collapse.