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The currencies of carbon: carbon money and its social meaning

2012; Taylor & Francis; Volume: 21; Issue: 4 Linguagem: Inglês

10.1080/09644016.2012.688356

1743-8934

Philippe Descheneau,

Sustainability and Climate Change Governance

Abstract Following the rapid development of carbon markets, little attention has been devoted to what precisely is being traded. Some authors have speculated that carbon can be considered as a form of money (Button; House and Victor). Not only is making money from carbon possible via several market devices but this process has also enabled the construction of carbon as a form of money. The importance of the social underpinnings of the commodification of carbon is highlighted and, following arguments about the performativity of economics (Callon), it is shown that carbon can perform functions similar to those of money. Following Actor–Network Theory, market devices such as registries or exchange platforms are explored to show how the market is constructed through them. Using the work of Zelizer and others on the sociology of money, it is argued that the construction of carbon money should be seen as a fundamentally social (rather than 'merely' technical) process. Keywords: carbon marketscarbon currenciesmarkets devicessociology of money Notes 1. The concept of carbon is used here as synonymous to tCO2e (tonnes of carbon dioxide equivalent), a construction that is itself part of the symbolic transformation (see Paterson and Stripple 2012). 2. For a different way of characterising these moments, see Paterson and Stripple (2012). 3. Those three moments are part of a larger PhD project. Only monetisation is treated here in larger detail. 4. The debates on whether carbon should be treated as an intangible asset or as a financial product has led to the directive IFRIC 3 (International Financial Reporting Interpretations Committee) that is not followed by everyone: 'it remains permissible to treat carbon in this way: as inside an economic frame, but in a sense invisibly so, since no accounting recognition is needed if the above conditions are met. Some market participants seem to do just that' (MacKenzie 2009a, p. 449). 5. 'Romania's ruling on EUAs threatens OTC', Carbon Market News, 24 February 2010. 6. For another case study exploring these micro-dynamics, focused on the commodification of wetlands, see Robertson (2007). 7. Except for the Regional Greenhouse Gas Initiative (RGGI), which uses the short ton, the metric tonne of carbon is the main unit in circulation. 8. It is relative as a store of value, because the value of a credit may expire after a certain time. 9. The distribution of CERs varies according to non-disclosed contracts. For an example see the template CERSPA Certified Emission Reductions Sale and Purchase Agreement (2nd version) (CERPSA 2011). 10. MacKenzie (2006, p. 17) calls Bayesian performativity the 'practical use of an aspect of economics [which] makes economic processes more like their depiction by economics'. 11. Hungary raised HUF 1 billion ($5.1 million) from selling CERs surrendered by ETS companies taking advantage of higher AAU prices. See 'Hungary sells "recycled" CERs', Point Carbon, 11 March 2011. 12. Europol estimate the money lost to €5bn over the past 18 months (ENDS 2009, p. 8). 13. A critical aim for IETA's remains the linking of trading regimes among Annex I countries, and its significance for the GHG market (IETA 2010a). 14. There has been an exchange of 100 GtCO2e between the EU ETS and CCX (2006), which looked more like a public relations deal than a commitment to fungibility between the systems, but the CCX has since been shut down. 15. It would be too long and outside the scope of this article to try to present those views, but the reification of money is a common theme. See for example Zelizer (1994), Simmel (2007). 16. See also Lederer (2012). 17. 'Carbon Expo is the "Global Carbon Market Fair & Conference", where around 3000 carbon traders, investors, lawyers, project developers, market infrastructure developers, consultants, and policy-makers meet annually' (see Descheneau and Paterson 2011, p. 667). 18. Although there is a strong correlation between the secondary CER and the EUA mainly because of the demand in EU. 19. Special Drawing Rights are an alternative unit of account introduced by the International Monetary Fund. Their value is defined by a weighted basket of four currencies; the Euro, the US dollar, sterling, and the Japanese Yen (IMF 2011). 20. The Waxman-Markey Bill did contain such regulation for controlling financial speculation.