Stockholm Conference on Environmental
Law and Justice,  6-9 September 2006

Malou Larsson (Stockholm):
Trade in Emissions Rights: from Environmental Justice and Trade Justice to Climate Justice

Could carbon trade be considered as a human right? Rather the ability to trade; thus reducing poverty and safe-guarding the right to economic and environmental self-determination.

The main purpose of the carbon trade systems is to reduce emissions of carbon dioxide, but the operation of the systems needs to be evaluated from a broader perspective. After a brief overview of the design of the trade systems, the international system under the Kyoto Protocol and the EU Emissions Trading System (EU ETS), the carbon market will be discussed with the 2004 Durban Declaration on Carbon Trading in mind. The international carbon market is already claimed to be both unworkable and unjust and the EU offspring is labeled as an “exclusive club for the rich”, both with colonial and imperialistic features.

Both the Kyoto Market and the EU ETS are designed as open markets, but procedures for entering the marketplace – opening of accounts – indicates otherwise. Application could be discriminatory, reducing equal opportunities in access to the carbon market.

If entry into the markets is successful, financial resources and access to information are needed to be able to fully operate on the market. Once inside, the rules of the market should safe-guard free and fair trade in the meaning of competition with other actors honoring democratic rules of level playing-fields. The registers of transactions might by their design obstruct policies of transparency of the market.

The role of legal rules on a free market needs also to be considered. Can environmental purposes justify market regulation, in our context promoting climate justice? The carbon market is created due to an environmental agenda but it is to be operated as a mature non-paper market.

Whether the idea of carbon trading is liked or not – setting a price on natural resources – it is my opinion that the model will be further developed, but timing is not optimal. When the international negotiations are gaining pace visavi the situation post-Kyoto, the evaluation of trade systems has just begun. Emerging reports evaluating the EU ETS suggests that trade in itself still can be justified as an instrument to reduce climate change, but that the design of the systems could be improved from the view-point of climate justice. This could in turn mean that the element of trade might be obstructed to some extent, but – if climate justice is defined as a goal – that is perhaps a small price to pay in the final balance?




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