The Ethics of Emissions Trading

Why do some researchers ethically object to emissions trading?
Image Credit: Megan Sutherland

One of the most widespread strategies aimed at mitigating climate change is emissions trading. Also referred to as cap-and-trade or carbon trading, it has been the subject of much debate, drawing criticism ranging from claims that the resulting changes will be too modest, to claims that the system will result in job losses. Some researchers, however, have taken issue with emissions trading because they view them, at best, as ethically nebulous and, at worst, ethically defunct. Today’s post examines some of the ethical objections to emissions trading.

At its heart, emissions trading is a market-based approach wherein a central authority (usually a government) sells or provides a limited number of permits that allow companies to emit a specified amount of pollution. If a company doesn’t need all its permits, it can sell them to companies who anticipate they will require additional permits, thus creating consequences for polluting and incentives toward reduction. Whether or not the market should be used to solve certain problems, though, is at the heart of much of the ethical debate.

Michael Sandel, a political philosopher and lecturer at Harvard, argues precisely this in his book What Money Can’t Buy: The Moral Limits of Markets. Sandel’s argument is that there are many things which should not be bought and sold, one of them being the right to pollute the environment. Environmental protection, he says, is inherently vested in “civic values” and the introduction of market choices cause a “corrosive effect” to the underlying ethical values they are meant to protect. For Sandel, placing a monetary value on the environment is wholly inappropriate and “undermines the spirit of shared sacrifice that may be necessary to create a global environmental ethic.”¹

Other researchers have voiced similar objections, holding that commodification undermines the ethical obligation citizens have to protect the planet by allowing the market to create a space where wealthy countries or businesses can “buy their way out of the duty not to despoil the environment.”² That is, by treating the atmosphere as a commodity to be sold, businesses and people begin to focus less on the ethical offense of pollution and think of paying for additional permits as “the cost of doing business.”³