Can climate change be traded away?

Richard Wyatt writes on different approaches in the battle against climate change, and his view on market-based solutions such as carbon trading

the people who are driving climate change are the big corporations in the developed world

Recently I have been thinking about whether or not switching my light bulbs to energy efficient ones and recycling as much waste as possible is really enough to help tackle climate change. Individual action is a wonderful thing, but in terms of preventing global warming it is the equivalent of removing a couple of buckets of water from a rising sea. The reality of the situation is that political action from our governments is a far more effective and quicker way of tackling climate change than our individual efforts to live as lightly as possible. For example, if you changed the old style light bulbs in your house to energy efficient ones, you would save about 40kg of CO2 each year. But, if the government banned conventional bulbs altogether, up to 730,000 tonnes of CO2 a year could be saved.

The people who are driving climate change are the big corporations, backed by governments, in the developed world. Many corporations gain the bulk of their profits from the sale of environmentally damaging products, gas guzzling cars, for example, or genetically modified food. It's unrealistic to expect that they will be willing to stop producing and promoting their products, or to risk profit margins by producing their products by more environmentally friendly, but often more expensive means. It's important to remember that corporations also have an obligation to their shareholders to protect their profits against any regulation that might restrict them.

The role which corporations play in the fight against climate change is a controversial topic. Many argue that they will be at the forefront of the move towards a sustainable society, an argument which was highlighted by the 2006 Stern report. Solutions to the problem of climate change have, since the Stern Report, focused on market-based economics, and most significantly, an economic system of carbon trading. The idea is that the earth's carbon-cycling capacity is turned into property to be bought or sold in a global market. Carbon emissions are broken into units of carbon, and the government allocates a certain number of units, or credits, to each company. These permitted units can then be traded. If a company predicts that it will emit more carbon credits than allocated, credits can be bought from companies which have a surplus in credits. Carbon credits can also be generated from funding projects, usually in developing countries, which claim to work to reduce or avoid carbon emissions, or which are seen to help the development of the country in a way which will not be detrimental to the environment.

This answer to climate change claims to force businesses to address the issue by creating a system of commerce which relies on a careful control of carbon emissions.
Though I agree that the private sector has an important role to play in the fight against climate change, I tend to disagree with the carbon trading position. I believe that the trading system encourages the industries most dependent on coal, oil and gas, to delay shifting from fossil fuels. It also gives governments little incentive to lay down the long term framework needed to move towards a low carbon society based around renewable energy.

The key to tackling climate change is to create a system which puts the world's poor at its heart rather than corporate profit. A climate bill that binds the government to a significant cut in emissions is, in my view, the only real way of making this happen.