Will failure to strike a post-Kyoto deal in Durban signal the end of the carbon market?

Abstract

We wrote this during the opening days of the latest round of United Nations climate change negotiations in Durban, South Africa. It is probably safe to say that the general mood of the international climate change community is rather bleak with respect to the potential for a treaty to add a second commitment period to the Kyoto Protocol. We actually feel safe in saying, absent some earth-shattering natural disaster, that the probability is near zero that the Durban conference will produce a bold new international climate regime. By the time you read this editorial, you will know whether we were correct. It being almost certain that we are approaching the end, at least temporarily, of a comprehensive global regime to address the anthropogenic climate change problem, many are asking a more basic question. What will this international failure mean for the future of greenhouse gas (GHG) emissions trading (i.e. the carbon market)? This question, as with so much of climate policy – and particularly the acronym-thick jargon of the UN process – has to be answered in pieces with numerous caveats. The intention of this editorial is to break down this question into its component parts. AlthoughGHGmeasurement andmanagement, as a field, is not limited to activities within the carbon market, the future of the policies and programmes that enable market-based approaches to GHG mitigation will clearly affect the practice.