The following Environment guidance note Produced in partnership with Navraj Singh Ghaleigh of Senior Lecturer in Climate Law, University of Edinburgh provides comprehensive and up to date legal information covering:
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Carbon markets operate within the ‘science’ of economics, the study of the allocation of scarce resources between competing ends (Lionel Robbins, An Essay on the Nature & Significance of Economic Science (2nd edn, revised and extended, 1949), Ch 1.3).
Within this framework, a decent environment is just such a scarce resource. The core claim of carbon markets is that by assigning property rights to greenhouse gas emissions (‘putting a price on carbon’), market actors can allocate the use of this property in a cost-effective way. Accordingly, a given emissions objective (say, reducing emissions by 90% by 2050) is achieved at the lowest cost.
By putting a price on carbon, markets generate climate-friendly incentives such as discouraging the use of carbon-intensive activities, and encouraging investment in the low-carbon economy such that when actors are faced with the social cost of their high-carbon goods and services, they will switch to low-carbon
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