Champions of emissions trading schemes (ETS) argue that creating a price for carbon
emissions in the most cost-e ective way to achieve deep reductions in global greenhouse
gas emissions. Using the European Union ETS as an example, discuss possible
arguments for and against this assumption.
Considering deep reductions in global greenhouse gas (GHG) emissions an issue of cost-
e ectiveness, achievable through a price for carbon set by emissions trading schemes
(ETSs), is both reductionist and paradoxical. It relies on a culturally-speci c market
fundamentalism, which appropriates the global atmospheric commons for private pro t.
Moreover, it negates the need for deep structural change and denies the role of the state
in such transformations. In doing so, it runs the risk that the energy transition will extend
beyond the Paris Agreement timespans, reducing the capacity for it to be a just and
equitable transition. In order to achieve deep emissions reductions, a multitude of policies
that account for di erent worldviews are necessary, in which a price for carbon set by
ETSs can be at best one of many mechanisms provided by the state.
In order to substantiate these claims, this essay will begin by unpacking why climate
change is a ‘super wicked’ problem that can be viewed through di erent culturally-
informed lenses. This will help identify the subjectivities in the following assessment of
arguments made by advocates of ETS carbon pricing. The key arguments against these
mechanisms will then be discussed, namely the di culties of market fundamentalism in
addressing GHG abatement and the need for deep structural change. Finally, these
debates will be contextualised by examining the successes and failures of the EU ETS.
Overall, it will be suggested that deep emissions reductions necessitates a
comprehensive and complementary state- and market-based approach.
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, Cultural Lenses
Prior to assessing the cost-e ectiveness of a price for carbon, it is important to bring
attention to the way worldviews inform policy responses. Climate change exhibits the four
key facets of a ‘super wicked’ problem: time is running out; the perpetrators of the
problem seek to redress it; central authority to co-ordinate action is lacking; and the
future is irrationally discounted by policy (Levin, 2012, 123). This necessitates
transformation within the practical, political and personal realms (O’Brien, 2018, 155).
However, such change encounters positionalities about the relationship between the
state, market and regulation. In turn, this in uences where such transformation occurs. In
the case of ETSs, a carbon price is a supply-side policy, and thus debate surrounding its
cost-e ectiveness is in uenced by two principle worldviews. An individualist worldview
prizes the rational, self-interested actor and technological innovation; whilst the
hierarchicalist places faith in government regulation and expert knowledge (Chuang,
2020, 4034). An awareness of these con icting approaches is essential when dealing with
global commons issues such as GHG emissions, since they regard the role for the market
and state in curbing emissions di erently. The result is distinct regulatory models
characterised by their principal ideological focus: economic e ciency, private property,
and command-and-control (Bogojevic, 2009, 443). The latter of these is associated to the
hierarchicalist worldview, whilst the other two are individualist in orientation.
The culturally-speci c nature of cost-e ectiveness as the currency of success is the
product of both neoliberal hegemony and the oundering success of the state to enforce
environmental legislation. It represents the reorganisation of both nature and
environmental law in favour of capitalist accumulation (Lohmann, 2019, 56). Speci cally,
the cost-bene t-analysis of ETSs imposes a narrow set of policy objectives which lack
the ‘applied forward reasoning’ required to stimulate the behavioural changes needed to
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