Carbon markets: a historical overview

Abstract

The global carbon trade has in a short space of time grown into a market worth over $175 billion a year. The history of carbon markets is a great political success story, and today they form an integral part of international climate change policy. Yet we only have a very limited understanding of how well these markets work in practice. Studying the incoming evidence and piecing it together with past emissions trading experiences can teach us a lot about how carbon markets work, and how they can fail. This article reviews the history of emissions trading and the rise of carbon markets as a basis for better understanding what is happening now. Viewing these markets in a historical light reveals that many of the current problems have precedent, and that we are perhaps not learning enough from past experiences. If carbon market policies were more geared toward systematic evaluation, and more open to incorporating past lessons into new policy, carbon markets would stand a greater chance of helping achieve the transition to a low-carbon economy.

China׳s carbon-emissions trading: Overview, challenges and future

“…11 "Notice of carrying out carbon emissions trading pilot work"(Beijing) 2013. 12 "Guangdong carbon emission quota allocation and program of work for the first time (Trial)" 2013. 12 "Tianjin carbon trade management Interim Measures" 2014.…”

“…However, the international carbon-trading market has enormous room for growth. Calel [12] concluded that the global carbon trade could quickly grow into a market worth over $175 billion a year. Calel [12] noted how carbon markets work and how they can fail by studying incoming evidence and piecing it together with past emissionstrading experiences.…”

“…Calel [12] concluded that the global carbon trade could quickly grow into a market worth over $175 billion a year. Calel [12] noted how carbon markets work and how they can fail by studying incoming evidence and piecing it together with past emissionstrading experiences. Lane [13] investigated the 'promiscuous history' of the efficiency of emissions-trading markets.…”

“…In 2008, New Zealand launched its own emissions trading scheme (NZ ETS). The program expanded in 2010 to cover additional economic sectors and is scheduled to expand further to become a nearly economy-wide program by 2015 [12]. Australia, Japan and South Korea are also actively preparing for the regional carbon-trading system.…”

The transformative potential of emissions trading

“…The relevant literature has been identified through a strategic snowballing approach, starting out with articles providing a meta analysis of the impacts and effects of the EU ETS (Laing et al 2014;Calel 2013;Branger et al 2013;Venmans 2012;Wråke et al 2012;Bailey 2010;Convery 2009;Clò 2009). In order to cover also the more specific aspects of our analysis, this was complemented with parameterized snowballing from three additional reference points: innovation (Borghesi et al 2015;Schmidt et al 2012;Kemp and Pontoglio 2011), investments (Jong, Couwenberg, and Woerdman 2014;Löfgren et al 2013;Grubb 2012), institutions (Voß and Simons 2014;Hildén 2014;LaBelle 2012), and integration (Lehmann and Gawel 2013;Schlomann and Eichhammer 2014;Gawel, Strunz, and Lehmann 2014).…”