Cashing in on Carbon Credits is an Acton commentary piece about the ill-conceived "cap and trade" system of reducing pollution touted by the Kyoto Protocol. It is often referred to as a market solution, but as Jordan Ballor shows, it is anything but. On the surface, it has some very appealing features. However, it actually penalizes some responsible nations while rewarding major polluters like Russia because of false assumptions about what constitutes a market.
The fundamental problem with cap and trade schemes is that they misapprehend the role of government. Governments do not create markets but rather provide the necessary framework within which markets can function. This framework consists of things like the consistent application of the rule of law and protection of property rights.
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Advocates of environmental stewardship are obliged to pay attention to the real-world results of governmental policy and not simply the good intentions in which programs may be grounded. As Russia profits from the Kyoto scheme, religious and political leaders need to get beyond the “market-based” rhetoric of cap and trade schemes and come to grips with the failure of such systems to justly provide rewards and punishments.
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