Jonas Meckling, PhD., writes the first critical analysis demonstrating how various types of not-for-profit, governmental and for-profit coalitions over
the past couple of decades have led to the development of the global carbon market, valued in 2010 at US$ 142 billion. Through clear examples
explaining the impact of early chlorofluorocarbons (CFCs) and leaded gasoline USA phase out mechanisms in the 1970s and 1980s on current market based
mechanisms, the author shows how various governmental, business and environmental not-for-profit coalitions took these early successes and crafted
current carbon market solutions to mitigate climate disruption.
By presenting an exhaustive and accessible history of the three main climate change mitigation coalitions functioning roughly since 1990:
- The pro-command-and-control NGO coalitions,
- The pro-trading NGO-business coalitions, and
- The antiregulatory business coalitions
The author provides relevant lessons learned from this multi decadal experience.
The key empirical findings from 1990 to 2009 regarding corporate, governmental, and NGO policy entrepreneurs generally are put into the following
- Significant emitters as policy entrepreneurs – demonstrated through initial policy mechanisms proposed by large emitters with later proposals
including a broader coalition of interests.
- Private demonstration to public trading mechanisms – demonstrated through the process by which small scale demonstration projects may
demonstrate proof of concept leading to large scale mechanisms across a subnational, national or international political boundary.
- Transnational coalitions – demonstrated by thematic coalitions defined by political ideology across political borders.
- Intra-national policy crises driving new ideas – demonstrated by specific events such as Hurricane Katrina driving intra-national policy
What I find most interesting about Dr. Jonas Meckling’s analysis is what he comments indirectly on not being included in the history of these
carbon coalitions and their approach using cause and effect responses and compromise based solutions. Because the above
coalitions follow a pattern of functioning based on cause-and-effect and compromise, what is not included is the simple fact that if the 21 st Century is defined as a century of natural capital, regardless of whether legislation is developed or not developed based on
recommendations from the pro-command-and-control NGO coalitions, the pro-trading NGO-business coalitions, and the antiregulatory business coalitions,
natural capital will need to be accounted for financially under any mechanism – whether carbon tax, cap-and-trade, combined carbon tax and
cap-and-trade, and / or other another mechanism.
This means that while we have spent 20 years developing global carbon coalitions under various proposals that sometimes are diametrically opposed to
how any other proposal might function, the financial accounting inputs to any of these proposals are the same. This means that if we are going to
develop systematic approaches to climate change, financial accounting valuation of natural capital and carbon impacts need to be developed within a
simple format and applied to governments, businesses, and not-for-profits globally regardless of which climate change mitigation mechanisms is applied.
In summary, I highly recommend Jonas Meckling’s thought provoking, illustrative and accessible book on carbon coalitions while I hope that 20 years
hence in 2031, we are not still struggling with coalitions and instead looking at fundamental financial accounting valuation issues such that whichever
coalitions exists under which ever mechanisms are used, natural capital will be properly valued within a systematic, transparent and simple solution.
How to order:
Carbon Coalitions: Business, Climate Politics, and the Rise of Emissions Trading: Book Review
Paperback: 240 Pages, $22.00
Publisher: The MIT Press, 2011 (978-0-262-51633-4)
Authors: Jonas Meckling, PhD.
Gabriel Thoumi, CFA is a frequent contributor to Mongabay.com.
California finalizes cap-and-trade program
(10/24/2011) Bucking long-stalled efforts in the US to combat global climate change, California has approved final rules for a cap-and-trade program set to go into effect in 2013. The program will require large polluters in California to reduce emissions or to ‘trade’ emissions on the carbon market with another company or initiative that is sequestering carbon. The rules even allow companies outside the state to participate, creating clean energy incentives across the US.
(09/29/2011) Investors funneled $178 million into forest carbon projects intended to mitigate global climate change last year, according to a new report by Forest Trends’ Ecosystem Marketplace. By trading a record 30.1 million tons of carbon dioxide equivalent (MtC02e), the market saw a 48 percent rise over 2009—including a rise in private investors over non-profits as well as greater support for the global program Reduced Emissions from Deforestation and forest Degradation (REDD)—shows that the burgeoning market may be beginning to make good on its promise to provide funds to save forests for their ecosystem services with an initial focus on carbon.
(08/22/2011) Australia’s parliament passed the world’s first national carbon trading scheme for credits generated from farming and forestry, reports Reuters.