Climate policy is undergoing a process of financialisation. The development of carbon markets around the world has seen the creation of new ranges of essentially financial products, the trading of which is purported to be an effective means to reduce carbon emissions. There are, however, good reasons to doubt the effectiveness of carbon markets in reducing carbon emissions. I highlight the distance between carbon traders and the ‘real’ environment, and the complexity of contemporary financial markets and products as particular problems. I conclude by considering two approaches to reform: through tighter regulation of carbon markets; and through changing the political framework in which markets operate.
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