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Carbon Coalitions

Carbon Coalitions: Business, Climate Politics, and the Rise of Emissions Trading

Jonas Meckling
Copyright Date: 2011
Published by: MIT Press
Pages: 264
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  • Book Info
    Carbon Coalitions
    Book Description:

    Over the past decade, carbon trading has emerged as the industrialized world's primary policy response to global climate change despite considerable controversy. With carbon markets worth $144 billion in 2009, carbon trading represents the largest manifestation of the trend toward market-based environmental governance. In Carbon Coalitions, Jonas Meckling presents the first comprehensive study on the rise of carbon trading and the role business played in making this policy instrument a central pillar of global climate governance.Meckling explains how a transnational coalition of firms and a few market-oriented environmental groups actively promoted international emissions trading as a compromise policy solution in a situation of political stalemate. The coalition sidelined not only environmental groups that favored taxation and command-and-control regulation but also business interests that rejected any emissions controls. Considering the sources of business influence, Meckling emphasizes the importance of political opportunities (policy crises and norms), coalition resources (funding and legitimacy,) and political strategy (mobilizing state allies and multilevel advocacy).Meckling presents three case studies that represent milestones in the rise of carbon trading: the internationalization of emissions trading in the Kyoto Protocol (1989--2000); the creation of the EU Emissions Trading System (1998--2008); and the reemergence of emissions trading on the U.S. policy agenda (2001--2009). These cases and the theoretical framework that Meckling develops for understanding the influence of transnational business coalitions offer critical insights into the role of business in the emergence of market-based global environmental governance.

    eISBN: 978-0-262-29888-9
    Subjects: Political Science, Environmental Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Acknowledgments
    (pp. ix-x)
  4. 1 Introduction
    (pp. 1-24)

    On May 19, 1997, John Browne, then CEO of British Petroleum (BP), entered the stage at Stanford Business School to deliver what would become a landmark speech. Breaking ranks with his industry peers who opposed emissions controls, Browne said that the time for action on global climate change had come—and that BP was working with the U.S.-based group Environmental Defense to establish an internal emissions trading system to meet its own greenhouse gas (GHG) emissions reduction target.¹ BP launched its in-house pilot trading scheme one year later. And by 2000, that pilot grew to encompass the entire organization, effectively...

  5. 2 Business Coalitions in Global Environmental Politics
    (pp. 25-46)

    Business is an influential force in global environmental politics, not least because of its preponderance in economic resources. Firms have high stakes in the game, given that they are the primary entities regulated by environmental policy. Accordingly, they have a strong interest in influencing the rules of the game. They do so through lobbying, providing private governance, discursive activities, and technology investment, to name but a few dimensions of corporate political activities (Levy and Newell 2005; Falkner 2008; Fuchs 2008). The history of global environmental politics has taught us that the political behavior of firms has often turned out to...

  6. 3 The Political Economy of Carbon Trading
    (pp. 47-74)

    “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood,” John Maynard Keynes (1936, 383) once famously observed. Emissions trading is indeed an economic idea that has had tremendous influence on how governments, international organizations, companies, and consumers respond to the challenge of global climate change. Though nascent and fragmented, a global carbon market has been emerging over the last decade, with the prospect of significant growth in geographic scope and financial scale over the coming decade. This chapter draws the contours of the phenomenon of...

  7. 4 The Kyoto Protocol: Internationalizing a U.S. Regulatory Approach
    (pp. 75-102)

    At the second Conference of the Parties (COP 2) in Geneva in 1996, Timothy Wirth, the undersecretary for global affairs in the U.S. State Department and head of the U.S. delegation, said: “The US recommends that future negotiations focus on an agreement that sets a realistic, verifiable and binding medium-term emissions target … met through maximum flexibility in the selection of implementation measures, including the use of reliable activities implemented jointly, and trading mechanisms around the world (quoted in Grubb, Vrolijk, and Brack 1999, 54).” With these words, the United States put international carbon trading on the negotiation table of...

  8. 5 The European Union: From Foe to Friend of Carbon Trading
    (pp. 103-132)

    Governments, firms, and environmental groups in the EU were the leading skeptics of international greenhouse gas (GHG) emissions trading before Kyoto, and some time after it. The instrument was publicly perceived to be granting a license to pollute to industry and allowing industrialized countries to escape domestic emissions reductions. Yet in January 2005, the EU launched the EU ETS, the first cross-border trading scheme for GHG emissions permits. The scheme covers almost 11,500 entities, which amounts to 45 percent of the total CO2emissions in the EU (Egenhofer 2007). When the scheme was first proposed, then EU commissioner for the...

  9. 6 The United States: Reimporting Carbon Trading
    (pp. 133-166)

    As the cradle of emissions trading, the United States was the main driving force behind its internationalization. After its withdrawal from the Kyoto Protocol, however, the United States refrained from the international political project of developing a global carbon market, settling instead for voluntary climate initiatives. Yet by 2009, a regional emissions trading scheme was operational, a large number of states were developing regional trading schemes, and the House of Representatives passed the first market-based climate bill. Carbon trading was back on the agenda. While chapter 4, among other things, explored shifts in U.S. foreign policy in the run-up to...

  10. 7 Business and the Rise of Market-Based Climate Governance
    (pp. 167-202)

    In the decade following Kyoto, a new currency emerged in the global political economy: carbon credits. The diffusion of carbon trading across the Organization for Economic Cooperation and Development world and major developing countries occurred surprisingly quickly. It represents one of the most significant and most recent developments in the broader shift from command-and-control regulation to market-based forms in global environmental politics. Like no other environmental policy, carbon trading moves environmental policy into the heart of the world economy: the energy and financial systems. While to date carbon markets remain highly fragmented and a global reference price does not yet...

  11. Notes
    (pp. 203-210)
  12. References
    (pp. 211-238)
  13. Index
    (pp. 239-250)