State versus market in California climate policy

Authors: Kathleen McAfee*, San Francisco State University
Topics: Cultural and Political Ecology, Environment, Global Change
Keywords: climate, carbon trading, California, PES, REDD
Session Type: Paper
Day: 4/5/2019
Start / End Time: 3:05 PM / 4:45 PM
Room: Delaware A, Marriott, Lobby Level
Presentation File: No File Uploaded

California’s climate policy is steeped in neoliberal discourse, yet government regulations, not market mechanisms, are mainly responsible for the modest progress made toward reducing the state’s greenhouse-gas emissions. California’s cap-and-trade and offset provisions have undercut the effectiveness of these regulations, but alternatives have been ruled out as not ‘cost-effective’ or as threats to business competitiveness. While cap-and-trade and offsetting are favored by state technocrats and economic advisors in the name of economic growth and efficiency, the prices of carbon credits are set not by the market but administratively, through political compromise with fossil-fuel, construction, and other business and labor interests. In this sense the program resembles putatively market-financed PES or REDD projects in which prices paid to generators of carbon credits are determined not by the supply-and-demand of carbon credits but by governments, donors, NGOs. Adding to the ironies, California’s proposed new jurisdictional carbon-trading program would link the state’s cap-and-trade system directly to subnational states in the global South. Credits purchased by emitters of GHGs in California could offset part of their pollution, generating funds to be paid to jurisdictions in the forested tropics and used to administer conservation programs through REDD/PES schemes, subsidies to landholders, etc. To many advocates, such jurisdictional carbon-credit programs are a step toward a global emissions-trading regime, in which the contradictions between market rhetoric and state, multilateral, or NGO management are likely to be amplified.

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