5 june 2019

[4C Note: The following letter, signed by about a hundred environmental economists and scientists, was sent to us by Lili Fuhr of the Heinrich Boell Stiftung, via the "talk" email list of the Climate Action Network. The letter was circulated by the Green Finance Observatory and is intended to discourage the launching of a new carbon market at the next UN climate summit.. ]


Addressing climate change requires sound environmental policies, not more failed carbon markets

It is well documented that carbon markets have failed spectacularly in achieving their environmental objectives and that many carbon offset projects have a devastating social impact. In spite of this evidence, carbon markets remain the main policy tool to address climate change in Europe, based on the misguided hope that they will work “once the price is right”.

Yet, beyond the well-known issues of excess permits and frauds, it has also been demonstrated that carbon markets have major conceptual flaws that cannot be fixed, such as the inability to provide a reliable price signali or the fact that the climate impact of offset projects is not calculable.

When carbon becomes a new asset class for investors, carbon markets will be much more vulnerable than traditional financial markets to crashes and abrupt losses of confidence from investors, with a high risk of contagion to other asset classes and the wider economy.

Yet, new carbon markets are being created such as CORSIA, the carbon offset market for civil aviation emissions, or the one mooted under article 6 of the UN Paris Agreement to be finalised at COP25.

These irremediable issues mean that carbon markets will never be able to meet their environmental and social objectives and should be abandoned for more robust alternatives.

gressive phasing out from fossil fuels complemented by targeted tax policies aimed at ensuring a fair sharing of the costs of a transition away from fossil fuel dependence would be far simpler, fairer and incomparably more effective in addressing climate change. Binding regulations have proven their effectiveness time and again, notably to address the hole in the ozone layer, prevent river pollution by effluents or reduce lead emissions from cars. Such a plan would of course be progressive and would mean finally starting to act, instead of continuing with the current inaction fostered by carbon markets.

Binding environmental regulations would also incidentally make finance sustainable with regards to climate change, as the risk-adjusted returns of all companies and economic activities would automatically adjust to the new regulations and capital would shift accordingly. In turn, this questions the current political focus softening financial regulation in exchange for a greening of bank balance sheets.

As carbon markets continue to prove their ineffectiveness while the incidence and amplitude of natural catastrophes increase and renewable energy prices continue to drop, public pressure is likely to make the current focus on carbon markets, as the central pillar of EU climate policy, gradually become politically untenable. Wasting another decade would only make the transition more abrupt with a far worse impact on climate and jobs.

We therefore call on policy makers to stop supporting new doomed carbon offset markets, notably at the COP25.

For more information read : ‘50 shades of green – the rise of natural capital markets and sustainable finance’ available at

List of signatories:

Frédéric Hache, director, Green Finance Observatory

Nicolas Bouleau, Emeritus professor, Ecole des Ponts ParisTech

Gaël Giraud, Research Director CNRS, Professor Ecole Nationale des
Ponts et Chaussées Paris Tech

Laurence Scialom, Professor of Economics, University Paris West

Jézabel Couppey-Soubeyran, Lecturer in Economics, University Paris 1 Panthéon-Sorbonne

Esther Jeffers, Professor of Economics, University of Picardie

Dominique Plihon, Emeritus professor, University Paris 13 Sorbonne Paris Cité

Clive L. Spash, Chair of Public Policy and Governance, WU Vienna University of Economics and Business

Richard B. Norgaard, Professor Emeritus of Energy and Resources, University of California, Berkeley

Inge Røpke, Professor of Ecological Economics, Aalborg University, Copenhagen

Arild Vatn, Professor of environmental sciences, Norwegian University of Life Sciences

Ewald Engelen, Professor of Financial Geography, University of Amsterdam

Steve Rayner, James Martin Professor of Science & Civilisation, Institute for Science, Innovation & Society, Professorial Fellow, Keble College, University of Oxford

Barbara Harriss-White, FAcSS, Emeritus Professor of Development
Studies, Oxford University, Emeritus Fellow of Wolfson College, Oxford

Kathleen McAfee, Professor, International Relations and Environmental Policy, San Francisco State University

Patrick Bigger, Lecturer (Assistant Professor) of Economic Geography, Lancaster University

Nathalie BERTA, Lecturer in Economics, University of Reims, Champagne-Ardenne

Gert Van Hecken, Assistant Professor (tenure track) in International Cooperation and Development, Institute of Development Policy (IOB), University of Antwerp

Ozgur Gun, Lecturer in Economics, University of Reims, Champagne-Ardenne

Benjamin Neimark, Senior Lecturer in Human Geography and Political Ecology, Lancaster University

Sarah Knuth, Assistant Professor in the Department of Geography, Durham University

Erik Swyngedouw, MAE, Professor of Geography, University of Manchester

Daniela Gabor, Professor of Economics and Macro-Finance, UWE Bristol

Patrick Bond, Distinguished Professor of Political Economy, University of the Witwatersrand School of Governance, Johannesburg

Tor A. Benjaminsen, Professor of Political Ecology, Norwegian University of Life Sciences (NMBU)

Vincenzo Bavoso, Lecturer in Commercial Law, University of Manchester

David Bassens, Assistant Professor, Vrije Universiteit Brussel

Irene van Staveren, Professor of Pluralist Development Economics, ISS, Erasmus University Rotterdam

Gary Dymski, Professor of Applied Economics, Leeds University Business School

Charles Dannreuther, Lecturer in European Political Economy, School of Politics and International Studies, University of Leeds

Philip G. Cerny, Professor Emeritus of Politics and Global Affairs, University of Manchester (UK) and Rutgers University (USA)

Joscha Wullweber, University of Kassel

Nina Haerter, PhD researcher, Vrije Universiteit Brussel

Denis Dupré, Professor of Finance and Ethics, University Grenoble-Alps

Manuel B. Aalbers, Professor of Geography, KU Leuven, Belgium

Jesus Ferreiro, Professor of Applied Economics, University of the Basque Country UPV/EHU

Jens Friis Lund, Professor of Political Ecology, University of Copenhagen

Aurore Lalucq, Co-director, Veblen Institute

José Castro Caldas, Economist, researcher at the Centre for Social Studies, Coimbra University, member of the Portuguese National Council of the Environment and Sustainable Development

Gilles Raveaud, Lecturer in Economics, University Paris 8 - Saint-Denis
Professor Peter Newell, Department of International Relations, School of Global Studies, University of Sussex

Antoine Henrot, Professor of Mathematics, Ecole des Mines de Nancy, University of Lorraine

Thomas Lagoarde-Segot, Economist, KEDGE Business School and SDSN France

John R Porter, Professor of Climate and Food Security, University of Montpellier SupAgro, University of Copenhagen, University of Greenwich, UK, Lincoln University, New Zealand

Peter Dietsch, Professor, Director of the Economics and Ethics theme, Université de Montréal

Malcolm Sawyer, Emeritus Professor of Economics, Leeds University

Andrea Lagna, Lecturer, School of Business and Economics, Loughborough

Peter Karnøe, Professor | DIST - Center For Design, Innovation, and Sustainable Transition, Copenhagen

Susse Georg, Professor, Aalborg University, Copenhagen

Genevieve Azam, Honorary Lecturer in economics, University Jean Jaurès, Toulouse

Elisa Van Waeyenberge, Senior Lecturer in economics, SOAS University of London

Kobil Ruziev, Associate Head of Department (Economics Programmes), Bristol Business School, University of the West of England

Jan Kregel, Professor of Finance and Development, Tallinn University of Technology, director of research, Levy Economics Institute, New York

Marco Veronese Passarella, Lecturer in Economics, Leeds University Business School

Joshua Farley, Professor, Community Development and Applied Economics Fellow, Gund Institute for Ecological Economics, University of Vermont

Karen Maas, Academic Director, Impact Centre Erasmus, Erasmus University Rotterdam, Professor of Accounting & Sustainability, Open University

Eric Clark, Professor of Human Geography, Lund University
Servaas Storm, Senior lecturer in Economics, Delft University of Technology, Delft, The Netherlands

Andrew Baker, Faculty Professorial Fellow and Professor in Political Economy. University of Sheffield

Enno Schröder, Assistant Professor, Delft University of Technology, Delft, The Netherlands

Paul Langley, Professor of Economic Geography, Durham University

Jon Cloke, Senior Researcher Geography Department, Loughborough University

Ismail Ertürk, Senior Lecturer in Banking, Director for Social Responsibility and Engagement, Alliance Manchester Business School

Giorgos Kallis, ICREA Professor, Social & Behavioural Sciences, Universitat Autònoma de Barcelona (UAB)

Matthias Schmelzer, , Konzeptwerk Neue Ökonomie and Postdoctoral researcher at the University Jena

Oliver Picek, Researcher, European Trade Union Institute

Grégoire Wallenborn, Physicist, Professor of the History of Sciences, Université Libre de Bruxelles

Fabrice Flipo, Professor of Social and political philosophy and Epistemology, Institut Mines-Télécom

Pablo Servigne, Independant Researcher, Agronomist and Doctor of Sciences

Rémi Beau, Associate Researcher in Philosophy, Université Paris 1 Panthéon-Sorbonne.

Matthieu Meerpoël, Lecturer in Law, Université Catholique de Lille

Ewan Sonnic, Research Associate in Geography and Spatial Planning, Ecole Nationale Supérieure d'Architecture de Bretagne

Julien Vastenaekels, PhD candidate and teaching assistant in environmental sciences, Université libre de Bruxelle

Elena Hofferberth, Postgraduate Researcher, Leeds University Business School

Joerg Bibow, Professor and Chair of Economics, Skidmore College, Saratoga Springs, NY

Michel ROCCA, Professor of Economics, Université Grenoble Alpes
Sophie Béreau, Professor of Finance and quantitative methods, University of Namur

Dominique Bourg, Professor, Institute of Geography and Sustainability, University of Lausanne

Sophie Swaton, Lecturer, Institute of Geography and Sustainability, University of Lausanne

Sébastien Mabile, Doctor in Public Law (thesis in environmental law), lawyer at the Paris Bar

Victor Lefèvre, PhD student in Philosophy of Ecology, Paris I Panthéon-Sorbonne University

Emmanuel Prados, Researcher in Applied Mathematics, Computer Science and Computational sustainability, Director of the STEEP research group at INRIA, Grenoble

Elke Pirgmaier, Research Fellow in the School of Earth and Environment, University of Leeds

Aviel Verbruggen, Professor emeritus Energy and Environmental Economics, University of Antwerp

Ivan Ascher, Associate Professor of Political Science, University of Wisconsin-Milwaukee

Paola D’Orazio, Postdoctoral researcher, Chair of Macroeconomics, Faculty of Economics and Management, Research Fellow, Research Department Closed Carbon Cycle Economy, Universität Bochum

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