I was recently contacted by a senior civil servant who asked me to provide a short comment on the concept of emissions trading schemes in general, and on the specifics of a particular application of trading within the UK.
Below is my response to the former.
To meet the Paris Agreement’s 1.5–2°C commitments and uphold the principle of equity (CBDR-RC), there is simply no headroom for carbon trading. Such mechanisms embody a technocratic framework that, while engaging experts, remains largely disconnected from the profound and real challenges posed by climate change. It perpetuates a false narrative that keeps the conversation focused on administrative solutions, rather than confronting the core issues of emergency emission reductions within a setting of global action.
For context, I refer to the Lamboll et al. (2023) assessment of remaining carbon budgets, which offers one of the most robust analyses in the literature, particularly considering aerosol impacts and the “zero emission commitment”. Based on Lamboll et al’s analysis, the remaining global carbon budget (from the start of 2026) is ~120 billion tonnes of CO2 (120 GtCO2) for a 50% chance of not exceeding 1.5°C, and ~520 GtCO2 for an 83% chance of not exceeding 2°C. To meet these budgets, global emissions would need to decrease by 20% year on year for 1.5°C and 8% for 2°C. To put this into perspective, each month, we consume approximately 2% of the remaining 1.5°C budget and 0.6% of the 2°C budget. It is also worth noting that the UK Met Office, using a concentration-based method rather than a budget framework, has concluded that global emissions would need to fall by at least 20% per year to have a 50% chance of staying below 1.5°C.
Before even considering the implications of equity or CBDR-RC, these rapid reduction rates leave no meaningful room for carbon trading. Every nation, sector, and company will face immense challenges in trying to meet the 8% annual reductions required for 2°C, let alone the 20% needed for 1.5°C. When equity considerations are factored in, the required reductions only intensify, particularly for high-emission countries like the UK and other industrialised nations.
In the face of this, the reliance on negative emissions technologies (NETs) and broader carbon dioxide removal (CDR) strategies – promoted by the IPCC (Working Group III), the UK’s Climate Change Committee, and other ‘leading’ mitigation groups – is deeply problematic. These strategies assume the capture of hundreds of billions of tonnes of carbon dioxide in the future, alongside increasing levels of temperature overshoot. I suspect that there is also an ongoing push to integrate solar radiation management (SRM) and other geoengineering techniques into future climate strategies, likely masked under shifting terminologies. Furthermore, the financialisation of carbon and the increasing complexity of these markets, risks embedding carbon trading as a core element of the problematic “net-zero” agenda, further diluting the already inadequate actions by governments, including the UK, to address the climate emergency.
At the heart of the carbon trading mechanism is the falsehood that green growth, coupled with the politics of business-as-usual, can align with the Paris temperature and equity commitments. This represents a large-scale deception, facilitated by a community of experts eager to maintain their prestige and an acquiescent media. It is a narrative that any informed observer can recognise as flawed. By remaining silent, we become complicit in delaying necessary action; in essence, the expert community is doing the work of corporations like Exxon, maintaining the status quo at the expense of genuine progress.
When all these factors are considered, detailed debates over carbon trading seem little more than a distraction, akin to Nero fiddling while Rome burns. The key difference in this case is that there are many little “Neros,” each content to receive accolades for their “fiddling.” Worse yet, it is not only Rome that risks destruction.