Carbon Trading: How it works and why it fails


Richard Moore

New book on carbon trading – Carbon Trading: How it works and why it fails

Contributed by Dr Karabi Dutta
Added: 25 November 2009

The book reveals how carbon trading is only a very recent invention by business and political elites that undermines existing environmental legislation and diverts from planning a rapid transition away from current fossil fuel expansion.

The authors, Tamra Gilbertson and Oscar Reyes, are both researchers with Carbon Trade Watch. The project combines high quality research and integration with social movements worldwide which has made it a respected commentator on global climate policy since 2002. The new book is published by the Dag Hammarskjöld Foundation ( as part of its Critical Currents series.

The book discusses Carbon Trading: how it works and why it fails/ outlines the limitations of an approach to tackling climate change which redefines the problem to fit the assumptions of neoliberal economics. It demonstrates that the EU Emissions Trading Scheme (EU ETS), the world’s largest carbon market, has consistently failed to ´cap´ emissions, while the UN’s Clean Development Mechanism (CDM) routinely favours environmentally ineffective and socially unjust projects. This is illustrated with case studies of CDM projects in Brazil, Indonesia, India and Thailand.


  • Chapter 1 introduces carbon trading, how it works and some of the actors involved.
  • Chapter 2 explores the origins and key actors involved in building the architecture of emissions trading.
  • Chapter 3 examines the performance of the EU ETS and finds that it has generously rewarded polluting companies while failing to reduce emissions. Many of the scheme’s fl aws, from the overallocation of permits to pollute onwards, are found to be fundamental to the cap and trade approach more generally.
  • Chapter 4 outlines the performance of the CDM and looks at four case studies of CDM projects in Thailand, India, Indonesia and Brazil; it argues that off sets projects, even those that promote renewable energy, will not be a solution to climate change.
  • Chapter 5 outlines what could work and ways forward for political organising around questions of climate change.

To download the booklet click here

To request a printed copy, please contact: nina@…

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