Here’s How Countries All Over the World Are Making Polluters Pay

By next year, nearly half of global GDP will be covered by cap-and-trade programs.

A coal-burning power plant in Gelsenkirchen, Germany.Martin Meissner/AP Photo


Solving climate change is essentially an economic problem: How do you force companies and consumers to pay for the damage caused by the fossil fuels they consume?

Let me explain: Without a price on carbon emissions, big polluters don’t pay for the greenhouse gases that they release into the atmosphere. The real cost of that pollution is borne by the planet in the form of global warming. So one of the most common strategies for reducing emissions is “cap-and-trade”: Polluters purchase or bid on a limited number of permits, which allow them to emit a certain amount of CO2. A regulated market is then created in which permits can be bought and sold. The cost of the permits—in other words, the carbon price—creates an incentive to reduce carbon pollution.

A new report out this week from the Berlin-based International Carbon Action Partnership shows that in the decade since the first major carbon trading program was adopted by the European Union, cap-and-trade systems have enjoyed remarkable popularity around the world—becoming the mechanism of choice for governments who want to act on climate change. The graphic below gives you a sense of just how widespread these markets have become:

What’s also remarkable is the economic clout that these jurisdictions carry, something that will continue to increase:

China’s national carbon program will start in 2016, but it already has several test programs up and running, together representing the world’s second largest carbon market, after the European Union:

Asia is fast becoming a global hub for carbon trading, as you can see from the maps below, which show the total number of programs around the world either in place, under consideration, or currently in development:

Each cap-and-trade program is different—there’s no one-size-fits-all approach, say the authors of the report. All of the programs cover CO2, but some take on other greenhouse gases, such as refrigerants. The programs also differ in the number of industries covered. Nearly all cover heavy industry, but only three cover aviation, for example. Here’s a snapshot of that diversity:

The report’s authors say that the fact that each country can tailor solutions to its own economy is one of the great strengths of cap-and-trade. “Flexibility is certainly one reason why emissions trading has become such an appealing tool for policy-makers,” said ICAP’s Co-Chairs—Jean-Yves Benoit, head of carbon markets at the Québec Environmental Ministry, and Marc Allessie, head of the Dutch Emissions Authority—in a statement.

But that means “harmonizing”—that is, joining the disparate trading systems into a global market—is now a big challenge. Quebec and California have already linked their systems, as have Tokyo and Saitama in Japan.

In the United States, President Barack Obama proposed a cap-and-trade system in 2009, but the plan died in the Senate. Efforts to develop a federal program have all but been abandoned in favor of regulations dished out by the EPA. There’s no sign of that changing any time soon. Still, some US states have adopted their own systems. In addition to California’s program, a group of northeastern states participate in the Regional Greenhouse Gas Initiative. And Washington state is actively considering a cap-and-trade program, as well.

Correction, Tuesday, February 17: The original version of our “Europe and the Americas” map above mislabeled Manitoba and Ontario in error. We’ve fixed it and updated the post.

More Mother Jones reporting on Climate Desk

WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We can’t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

Because the in-depth journalism on underreported beats and unique perspectives on the daily news you turn to Mother Jones for is only possible because readers fund us. Corporations and powerful people with deep pockets will never sustain the type of journalism we exist to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we need readers to show up for us big time—again.

Getting just 10 percent of the people who care enough about our work to be reading this blurb to part with a few bucks would be utterly transformative for us, and that's very much what we need to keep charging hard in this financially uncertain, high-stakes year.

If you can right now, please support the journalism you get from Mother Jones with a donation at whatever amount works for you. And please do it now, before you move on to whatever you're about to do next and think maybe you'll get to it later, because every gift matters and we really need to see a strong response if we're going to raise the $253,000 we need in less than three weeks.

payment methods

WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We can’t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

Because the in-depth journalism on underreported beats and unique perspectives on the daily news you turn to Mother Jones for is only possible because readers fund us. Corporations and powerful people with deep pockets will never sustain the type of journalism we exist to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we need readers to show up for us big time—again.

Getting just 10 percent of the people who care enough about our work to be reading this blurb to part with a few bucks would be utterly transformative for us, and that's very much what we need to keep charging hard in this financially uncertain, high-stakes year.

If you can right now, please support the journalism you get from Mother Jones with a donation at whatever amount works for you. And please do it now, before you move on to whatever you're about to do next and think maybe you'll get to it later, because every gift matters and we really need to see a strong response if we're going to raise the $253,000 we need in less than three weeks.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate