Science has long stressed the urgency of climate action. The evidence is clear: melting glaciers and permafrost in the Arctic, devastating storms simultaneously battering the Atlantic coast, disappearing coastal cities amid rising sea levels, and the warmest decade on record all spell existential trouble. Without drastic changes, our future will be rife with mass migrations, food and water insecurity, mass extinction of species, and widespread state collapse.
To tackle climate change, we must execute swift, impactful transformations to our societal consumption choices, production systems and markets — including the implementation of carbon markets. With effective implementation, market-based mechanisms will limit greenhouse gas emissions.
Global challenges must be met with comprehensive solutions. Though in recent years, climate change awareness has been bolstered by protests sweeping the globe, calling for a revolution, a global carbon market is not a revolution. Rather, it is an incremental step toward a habitable future on Earth.
In 2015, the unprecedented Paris Agreement called for “holding the increase in the global average temperature to well below 2 °C above preindustrial levels and pursuing efforts to limit the temperature increase to 1.5 °C above pre industrial levels.” However, this goal can only be achieved with multilateral action on a global scale. International cooperation will increase national ambition by fostering a sense of responsibility for emissions and build fundamental trust between countries. In essence, a global carbon market guarantees a cap on emissions, assuring efficient climate action. Without a cap or price on carbon, the ruinous polluters will not pay for their wrongdoings.
Within the Paris Agreement, Article 6 covers the issue of international carbon markets. Under Article 6, countries who struggle to meet their nationally determined contributions (NDCs) can purchase emissions reductions from other countries who have reduced their emissions more than they had pledged. An international carbon market is beneficial for all parties involved: both countries achieve their commitments and the country with more ambitious policies gets financially rewarded.
At COP25, the United Nations 2019 Climate Change Conference, negotiators failed to reach an agreement, therefore leaving the Paris Agreement without an implementation tool for a global carbon market, and postponing the issue to COP26. The main goal of COP25 was to flesh out the unfinished aspects of the Paris Agreement rulebook, which would cultivate the success of international carbon markets. “However, developed countries prioritized their national interests over global common good and failed the world in finding a robust way forward that shows the urgency and commitment required to tackle the climate crisis,” said Sanjay Vashist, director of the Climate Action Network South Asia
It is important to recognize that though the Paris Agreement may not be perfect, it is an international agreement that lays the groundwork for a better future. To reach its full potential, a flawless international carbon market must include stable high prices, accurate demand predictions, standardized monitoring and verification processes, and legally binding commitments. Carbon trading within the global market must be transparent to ensure accurate calculations of emissions reductions, and compliant so no country has an excuse. The climate crisis is too urgent for voluntary, uncertain policies. International collaboration — and some level of coercion — leads to critical national action.
Some climate activists say creative accounting within carbon markets will not save us from disaster. Though this may be true, it’s a step in the right direction.
Ultimately, the world faces a difficult challenge when combining swift climate action with the slow-moving political cultures and the hesitation of countries throughout the world. Uncoordinated and piecemeal commitments from developed and developing countries alike will not be effective as a mitigation tool. These efforts, and especially the effort to create legitimate global carbon markets, need international support, as an incentive for all of humanity to tackle this emergency together.