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Mapping Wild Cards

Inspired by: FP7 » Individual and collective trading of pollution credits

version: 4 / updated: 2010-10-16
id: #992 / version id: #284
mode: VIEW

Originally submitted by: Rafael Popper
List of all contributors by versions (mouse over)
Last changed by: Rafael Popper
WI-WE status:
submitted unpublished archived

Source of inspiration

European Commission Framework Programme for RTD (FP7)

Theme/activity of inspiration

Theme 8 - Socio-economic Sciences and the Humanities

Sub-theme/area of inspiration

Socio-economic development trajectories

Optional reference/s to FP7 project/s

Use the following format: Project Acronym (Project Reference No.). Use commas if more than one project is associated to this Wild Card, for example: ALFA-BIRD (213266), SAFAR (213374), LAPCAT-II (211485)
SMILE (217213), CONSENSUS (217239) http://cordis.europa.eu/fetch?CALLER=FP7_PROJ_EN&ACTION=D&DOC=1&CAT=PROJ&QUERY=0125138d2a8a:47bb:1303bbd1&RCN=88426 http://cordis.europa.eu/fetch?CALLER=FP7_PROJ_EN&ACTION=D&DOC=33&CAT=PROJ&QUERY=0125138da708:3783:44bad383&RCN=88441

Headline

(max. 9 words)

Individual and collective trading of pollution credits

Description

(approx. 150 words)
Please describe the Wild Card (approx. 150 words)
Carbon footprint allowance (including tax) is allocated to individuals and business organisations. This policy results in the poor (and vulnerable) selling their allowance to businesses and those who are better off. Consequently, segregation based on carbon allowance quickly emerges in many areas, with regard to transport, housing location, and local renewable energy development. A group of brokers, agents form and the system of pollution credit trading becomes institutionalised. This event in itself is not seen as very wild, as it would not be rapid and sudden change, but rather a causal change. The wildness would manifest itself in the aftermath as increasing segregation between rich and poor. The poor, by selling their credits, would be even worse off and would be denied opportunities for social mobility as limitations would be put on their transport, businesses, etc. Another wild feature would possibly be complete geopolitical restructuring by pollution zones and increased polarisation of nations in terms of pollution. Poorer nations/regions would be tempted to sell their credits on to richer nations, which consequently could mean that polluting industries and jobs would be moved to richer nations. This could lead to consequent tension between nation states, or even regions within the same state. The system of trading which would be established would also demonstrate the complete privatisation of the handling of public goods. This would need to be preceded by the development of sophisticated enough data to capture for universal carbon credit cards and associated permission from European populations.

Keywords

pollution, carbon, allowance, individual, environment, tax, business

Mini-description

(max. 250 characters)

Carbon footprint allowance (including tax) is allocated to individuals and business organisations. This policy results in the poor (and vulnerable) selling their allowance to businesses and those who are better off.

Likelihood

Closest timeframe for at least 50% likelihood
Please use one of the following options:
now-2050

Type of event

Human planned (e.g. terrorist attack or funded scientific breakthrough)

Type of emergence

please select (if any) describe related trend or situation
An extreme extension of a trend/development/situation
(e.g. Increased global warming leads to a total ban on fossil fuels) 		Pay-as-you-pollute policies

Type of systems affected

Human-built Systems - E.g. organisations, processes, technologies, etc.

Classification

Uncertain

Importance

please specify:
please select
Level 3: important for the European Union Climate change poses a threat to Europe as well as rest of the world and it is imperative that new, environmentally friendly ways are developed to answer increasing need for energy and that pollution is kept to a minimum. Current systems of carbon credit trading will not alone control emissions and pollution and it is vital that other avenues are explored to combat climate change. These include environmental education and awareness raising, use of environmentally friendly energy sources and reducing of energy consumption.

Early indicators

(including weak signals)

There are several signals warning us about the probability of occurrence of such a wild card. There are already active trading programs in several air pollutants. For greenhouse gases the largest is the European Union Emission Trading Scheme. In the United States there is a national market to reduce acid rain and several regional markets in nitrogen oxides. Markets for other pollutants tend to be smaller and more localized. Carbon emissions trading has been steadily increasing in recent years. According to the World Bank's Carbon Finance Unit, 374 million metric tonnes of carbon dioxide equivalent (tCO2e) were exchanged through projects in 2005, a 240% increase relative to 2004. In terms of monetary value, the World Bank has estimated that the size of the carbon market was 11 billion USD in 2005, 30 billion USD in 2006,and 64 billion in 2007. The Marrakesh Accords of the Kyoto protocol defined the international trading mechanisms and registries needed to support trading between countries, with allowance trading now occurring between European countries and Asian countries. However, while the USA as a nation did not ratify the Protocol, many of its states are now developing cap-and-trade systems and are looking at ways to link their emissions trading systems together, nationally and internationally, to seek out the lowest costs and improve liquidity of the market. Critics have pointed out various flaws in this, which may be read as weak signals indicating what is ahead: carbon-trading schemes are no substitution for reducing emissions overall. Emissions trading can result in perverse incentives. If, for example, polluting firms are given emission permits for free, this may create a reason for them not to cut their emissions. Critics of emissions trading include environmental organizations, economists, labour organizations and those concerned about energy supply and excessive taxation. It has been argued that trading pollution allowances should be avoided because they result in failures in accounting, dubious science and the destructive impacts of projects upon local peoples and environments.

Latent phase

Obstacles for early indentification

information/communicational filters (media/editorial interests, language, reasoning)
institutional filters (rules, laws, regulations)
scientific filters (knowledge/technology access)
political filters (party or ideological interests)

Manifestation phase

Type of manifestation

In a probably pervasive way (contagious or transmittable)

Aftermath phase

Important implications
Emergence of a new system (e.g. new technologies, new paradigms)
Transformation of a system (e.g. new applications, change in stakeholders relations/influence)

Comments

Emergence of a new pollution credits trading system. Transformation of our current tax (and benefits) systems.

Key drivers or triggers

Provide up to 2 possible drivers or triggers of HIGH importance. Click on HELP to see examples:
please describe
Driver / Trigger 1 		please describe
Driver / Trigger 2
Social Alternatives to high polluting activities like air travel will be adopted/imposed on disadvantaged groups.
Economic The rule of the financial markets is seen as a solution to emission control and climate change. Failure of current mitigation and adaptation strategies to climate change.
Environmental Emergence of a new environment psychology.
Values/Ethical/Cultural Energy/resource and environmental initiatives are seen as a private choice/luxury rather than a matter of social education/regulation. Lifestyles have become even more individualised.

Potential impacts (risks & opportunities)

Timeframe options
Risks Opportunities
immediate
(within 1 year after the Wild Card manifests) 		Inequality is maintained – poor people find ways of circumvent the new system thus pollution remains stable and is still an immense challenge.
short term
(1 to 5 years after the Wild Card manifests) 		Unfair taxes for citizens leading to slow, inefficient and expensive solutions.
medium term
(5 to 10 years after the Wild Card manifests) 		Innovative ways of evading and avoiding penalties, new crimes and criminals, legitimacy crises. Weaker environmental awareness in poor neighbourhoods. Sharpening of geographical differences in pollution patterns.
long term
(more than 10 years after the Wild Card manifests) 		More pollution in poorer countries, which leads to increasing pressure for identifying new models.

Potential stakeholders' actions

before
it occurs 		after
it occurs
Policy actors (at the international, European and national levels) To make environmental issues more visible (e.g. including environmental education in the curriculum); to focus on developing renewable energy solutions; to continue focusing on reducing emissions; To provide real and practical solutions to problems such as inequality and increasing pollution. To avoid radical changes in legislation; monitoring and regulating of credit trade schemes and initiatives; monitoring impact of this scheme and intervene should rising inequality present itself.
Business actors (incl. SMEs) To promote corporate environmental responsibility; To use business power to promote environmental issues and reducing of emissions by other means. To continue promoting the above and making sure that carbon credit trading does not.
Academic/Research sector To promote research on current carbon credit trade schemes, environmental discourse and analysis of environmental attitudes; To increase research on the current and future effects of carbon credit trading; To research how the schemes may be used without causing increased inequality between people, regions and nation states. To identify and analyse the financial application to carbon credit trading. Research on the impact this would have on reducing emissions and pollution. Continued research focus on the issues named above. Research community would need to continue presenting research findings that would promote understanding of environmental regulation, the carbon credit trade system and impacts on society and the environment.

Relevance for Grand Challenges

where? please justify:
particularly relevant Europe world
Behavioural change
Sustainability and climate change

Relevance for thematic research areas

please justify:
particularly relevant
Energy
Environment (including Climate Change)
Science in society

Pan-European strategies potentially helping to deal with the wild card

please justify:
particularly relevant
Facilitating and promoting knowledge sharing and transfer
Fostering and facilitating coherent international cooperation in science and technology

Relevance for future R&D and STI policies

Note: RTD = research and technology development; STI = science, technology and innovation
To be better prepared for such a wild card it may be necessary to support RTD on the effects of renewable energy technologies on energy supply in Europe. Research could focus on tracking current developments of renewable energy technologies and how populations across Europe are responding to these. In some instances there has been evidence of local resistance towards the placement of wind farms and biomass plants. Research could thus focus on understandings of these debates and how best to work with locals to avoid delays in the implementation of renewable energy technologies. Research could also focus on forecasting how much impact renewable energy technologies will have on increasing energy need in the future. Research could also focus on unveiling whether reducing energy consumption could be a faster way of combating climate change than the production of more energy. Research could also focus on public awareness and how best to educate the public to make energy saving a daily practice.