Plan to use financial markets to halt climate change is ‘doomed’


Environment Editor


A leading scientist has dismissed the United Nations’ call for governments to use the world’s financial markets as the central weapon against climate change as being “doomed to failure and a dangerous distraction”.

Rajenda Pachauri, the chairman of the UN Intergovernmental Panel on Climate Change (IPCC), said that the markets were humanity’s only hope to combat global warming as he unveiled the panel’s latest landmark report on Friday.

He urged policymakers to look at ways of using the markets to put a price on carbon emissions that was so high that producers and consumers would be forced to rely on much greener energy. “An extremely effective instrument is to put a price on carbon. It is only through the market that you can get a large enough and rapid enough response,” he said on Friday.

He was referring to the limiting of global warming to 2C, the temperature beyond which the consequences are predicted to become increasingly devastating. However, Kevin Anderson, professor of energy and climate change at the University of Manchester, criticised Dr Pachauri, saying his emphasis on the markets would be counter-productive, diverting attention away from more effective methods of tackling the problem.

He also argued that even climate scientists have failed to appreciate the true scale of the challenge the world faces in containing global warming.

“I disagree strongly with Dr Pachauri’s optimism about markets and prices delivering on the international community’s 2C commitments. I hold that such a market-based approach is doomed to failure and is a dangerous distraction from a comprehensive regulatory and standard-based framework,” he said.

“I get the impression that many scientists engaged in climate change seriously misunderstand the mitigation challenge,” added Professor Anderson, who is also deputy director of the Tyndall Centre for Climate Change.

He is in favour of a “standard-based” framework that would put a lid on the maximum amount of CO2 that could be produced in various activities. This could stipulate how much carbon an energy generator could emit in the production of a kWh of electricity or a car engine could produce per kilometre, Professor Anderson explained.

Rajenda Pachauri, chairman of the UN Intergovernmental Panel on Climate Change (Getty) Rajenda Pachauri, chairman of the UN Intergovernmental Panel on Climate Change (Getty)  

These limits would be reduced over time as technological innovation improved efficiency, he said. He argued that while a market-based approach can be effective when it comes to “small changes in the system”, the scale of the overhaul needed to drastically reduce emissions would require such a high carbon price that it would completely distort the market. This would push the price of goods and services up by so much that it would put them beyond the reach of large swathes of the global population while the wealthy could carry on more-or-less as normal, Professor Anderson argued.

Such price increases could also destroy the value of many companies producing high carbon emissions by making them less profitable.

The EU Emissions Trading Scheme (ETS) was launched in 2005 and is by far the most ambitious of the handful of carbon trading schemes that have been tried across the world, but it has been largely ineffective.

COMMENT: Difficult political actions are the only real solution

Tom Bawden

Although the prospect of letting the markets sort out climate change has raised plenty of eyebrows, most would argue that IPCC chairman Rajendra Pachauri’s recommendation was rooted in the real world. By contrast, the IPCC’s decision to include a short section on “geoengineering” for the first time in its climate change report was a surprise. The measures, which have the strong support of Russia, include such techniques as cooling the Earth by spraying sulphate aerosols into the stratosphere to reflect sunlight, or fertilising the oceans with iron to create carbon-capturing algal blooms.

The inclusion of geoengineering will help to legitimise the kind of solutions that many believe are both unfeasible and dangerous – the manipulation of sensitive planetary systems in one area could result in drastic, unintended consequences somewhere else, such as radically disrupted rainfall. These are the kind of arguments given against GM crops – but on a much bigger scale.

Geoengineering is seductive because it implies a magic wand that can wave your troubles away – a bit like taking a pill that sorts out your personal issues without having to go through hours of painful analysis. But the sheer scale of these projects and their technical ambition makes them seem pie-in-the-sky. Still, the fact the IPCC is taking geoengineering seriously shows just how desperate the need is to do something drastic to tackle greenhouse gas emissions.

Club legend Paul Scholes is scared United could disappear into 'the wilderness'
A model of a Neanderthal man on display at the National Museum of Prehistory in Dordogne, France
Dawkins: 'There’s a very interesting reason why a prince could not turn into a frog – it's statistically too improbable'
newsThat's Richard Dawkins on babies with Down Syndrome
Malky Mackay salutes the Cardiff fans after the 3-1 defeat at Liverpool on Sunday
footballFormer Cardiff boss accused of sending homophobic, racist and messages
Have you tried new the Independent Digital Edition apps?
Rodgers showered praise on Balotelli last week, which led to speculation he could sign the AC Milan front man
Life and Style
life – it's not, says Rachel McKinnon
Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
Arts and Entertainment
Arctic Monkeys headline this year's Reading and Leeds festivals, but there's a whole host of other bands to check out too
music(who aren't Arctic Monkeys)
Lizards, such as Iguanas (pictured), have a unique pattern of tissue growth
Anna Nicole Smith died of an accidental overdose in 2007
Life and Style
food + drink
Arts and Entertainment
'The Great British Bake Off' showcases food at its most sumptuous
tvReview: Bread-making skills of the Bake Off hopefuls put to the test
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Software Developer - Newcastle - £30,000 - £37,000 + benefits

£30000 - £37000 per annum + attractive benefits: Ashdown Group: .NET Developer...

Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Digital Project Manager/BA

£300 Per Day: Clearwater People Solutions Ltd: An experienced Digital/Ecommerc...

Creative Content Executive (writer, social media, website)

£30000 - £35000 Per Annum + 25 days holiday and bonus: Clearwater People Solut...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home