Nicholas Institute for Environmental Policy Solutions
This article in Law and Contemporary Problems explores the contrast between the movement toward environmental markets, characterized by the emergence of new carbon markets across the globe, and the renewed opposition to markets manifested in the pope’s encyclical and the views of some environmental advocates. It considers the arguments raised by these latter critics, explores alternative views of their concerns, and examines how market-based climate policies could be designed to alleviate these concerns. Others have examined the moral and ethical dimensions of market-based climate policies, but this article contributes to the literature by providing a contemporary examination of the papal encyclical’s prominent questioning of the use of markets to address climate change. It also speaks to issues that more than 190 countries now face under the Paris Agreement and that forty-eight U.S. states face under the Clean Power Plan as they decide what role, if any, market-based instruments will play in their pursuit of the greenhouse gas reductions. And it explores options for designing a market-based instrument to address climate change in ways that could ease some of the moral criticisms, and discusses some of the tradeoffs involved in those design choices. Part 2 reviews how market-based mechanisms are being designed for climate change policy. Part 3 examines the pope’s encyclical and the moral issues it raises regarding carbon markets. Part 4 assesses in more detail the moral objections to using market-based mechanisms for climate change policy and offers counterpoints to these arguments. Part 5 discusses possible ways to reconcile these viewpoints by designing market-based climate policies in ways that resolve or reduce the critics’ concerns and discusses the tradeoffs associated with each approach. Part 6 offers specific insights into the decisions faced and tradeoffs presented by market-based climate policies.