What we don’t talk about when we talk about carbon markets

Oscar Fitch-Roy (University of Exeter & Warwick Business School), Jenny Fairbrass (University of East Anglia) & David Benson (University of Exeter)

By Oscar Fitch-Roy, Jenny Fairbrass & David Benson

As witnessed at the recent session of the climate change Conference of the Parties in Madrid (COP25), carbon markets dominate discussion about climate change policy.

At times, it can seem difficult to talk about anything else.

But if everyone is talking about carbon markets, what are they not talking about? In our article “Ideas, coalitions and compromise: reinterpreting EU-ETS lobbying through discursive institutionalism” published in the Journal of European Public Policy, we examine an episode of reform of the EU emissions trading system in order to reveal the role of policy discourse in shaping advocacy strategies.

We argue that between 2012 and 2015, reforms to the EU-ETS in order to avert its collapse were aided by environmentalists’ efforts to mobilise businesses in favour of tighter rules. By skilfully creating new norms of collaborative working, a diverse and influential coalition of interests was assembled which appears to have contributed to bringing about the reforms.

However, the article goes on to make a case that this ‘policy entrepreneurship’ was only possible by framing the potential failure of the EU-ETS as the overriding problem faced by EU climate policy, a departure from the typical scepticism about carbon markets within the environmental movement. The article highlights that the ‘win’ of tighter EU-ETS rules came at the ‘cost’ of accepting and amplifying the ‘technology-neutral’ narrative of climate change mitigation favoured by fossil-fuel interests in which decisions are ‘left to the market’. Finally, we point out that further entrenching the idea of ‘technology-neutrality’ within the policy discourse may have implications beyond the original campaign. One of these is to weaken the position of advocates for technology-specific policies such as renewable energy targets or energy efficiency. This observation is especially pertinent given the notable failure of carbon markets to bring about the change needed to tackle the climate crisis to-date and ongoing doubts about their ability ever to do so.