A characteristic of a long debate, and especially one where views are passionate, is that issues get linked, often by default, and muddled. This is happening in the debate around emissions reduction.
The political classes, well supported by journalists mostly trained in the arts, speak too often about greenhouse emissions reduction and emissions trading schemes in the same breadth. They seem to necessarily link them when they aren't linked and shouldn't be. Indeed the debate about say, carbon reduction, is in danger of being hijacked by all the talk of emissions trading. One might be a good idea but the other is very probably, a very bad idea.
Whatever your views on whether grenhouse gases cause climate change, everyone agrees that the less man made rubbsh we put into the atmosphere, the better. So reducing greenhouse gases is a good idea. Emissions trading is a mechanism, one mechanism, to change behaviour, to reduce emissions. Unlike other mechanisms, like an environmental tax, it involves creating a new commodity through a licensing system that creates value, trading that commodity and, hopefully, using the cost of that commodity to change behaviour. As the commodity will be traded internationally, and different countries will have different emissions reduction caps (on the basis that one country has polluted to much and fancifully, another too little), this will mean that value is very likely to transfer from one country to another. Indeed the Clean Development Mechanism sponsored by the IPCC and the UN envisages this. Emissions trading schemes therefore may well be just another form of aid and, in what is an unrepaired and unreformed financial market that does not really know how to regulate or measure this new commodity, another type of toxic asset.
Copenhagen will be a haggle about emissions reduction targets. The developing world will want them high because it increases the probability of further receipts to them from the developed world. The developed world will want them lower. That will cloud and fracture debate. We can reduce emissions without a trading scheme in the developed world by the introduction a system of targets and penalities. We do not need a new commodity and certainly not one which will be left to the vagaries of a market that is clueless about its regulation and toothless about the enforcement and recovery of "lost or unfulfilled carbon credits". Unfortunately, the targets and trading are now linked because there is a view that trading will encourage developing nations to also reduction their emissions. But that won't happen. India's needs, as anyone knows who has travelled there, are much more immediate. Once the aid is in place through a CDM approved project, other matters will be more pressing: population; poverty; infrastructure. With the aid in place excuses will follow and holders of carbon credits will be left to the perils of courts where judges will know as much about carbon credits as they do about software.
Emissions reduction and emissions trading don't mix. But when will the political classes wake up?
