Review

Collecting silences: creating value by assetizing carbon emission mitigations and energy demand reductions

  • Received: 07 December 2021 Revised: 09 February 2022 Accepted: 14 March 2022 Published: 22 March 2022
  • JEL Codes: Q4, Q5

  • This paper reviews circumstances where governance arrangements and organizational innovations assign value to carbon emission mitigations or energy demand reductions. The creation of such value hinges upon 1) the effective governance of financial mechanisms to create demand; and 2) the ability of organizations to assetize and supply carbon emission mitigations and energy demand reductions as commodified private goods. To analyse the political and organizational governance of such demand and supply systems, this paper uses insights from transaction cost economics. On the demand side, transaction costs are reduced through the innovative governance of markets at national level, such as white certificate markets for energy savings, and international level, such as baseline-and-credit systems for carbon emissions reductions. Strict rules regarding accountability, transparency, measurement, reporting, verification, and inclusion reduce transaction costs for organizations to assetize reductions and mitigations on the supply side. Despite limited success to date, these innovations provide the basis for international carbon emissions mitigation governance through climate clubs based on Article 6 of the Paris Agreement. This paper concludes that such clubs provide the basis for creating consistent demand for carbon emission mitigations and associated energy demand reductions through the positive pricing of mitigation actions.

    Citation: Colin Nolden. Collecting silences: creating value by assetizing carbon emission mitigations and energy demand reductions[J]. Green Finance, 2022, 4(2): 137-158. doi: 10.3934/GF.2022007

    Related Papers:

  • This paper reviews circumstances where governance arrangements and organizational innovations assign value to carbon emission mitigations or energy demand reductions. The creation of such value hinges upon 1) the effective governance of financial mechanisms to create demand; and 2) the ability of organizations to assetize and supply carbon emission mitigations and energy demand reductions as commodified private goods. To analyse the political and organizational governance of such demand and supply systems, this paper uses insights from transaction cost economics. On the demand side, transaction costs are reduced through the innovative governance of markets at national level, such as white certificate markets for energy savings, and international level, such as baseline-and-credit systems for carbon emissions reductions. Strict rules regarding accountability, transparency, measurement, reporting, verification, and inclusion reduce transaction costs for organizations to assetize reductions and mitigations on the supply side. Despite limited success to date, these innovations provide the basis for international carbon emissions mitigation governance through climate clubs based on Article 6 of the Paris Agreement. This paper concludes that such clubs provide the basis for creating consistent demand for carbon emission mitigations and associated energy demand reductions through the positive pricing of mitigation actions.



    加载中


    [1] Adams G, Converse B, Hales A, et al. (2021) People systematically overlook subtractive change. Nature 592: 258-271. https://doi.org/10.1038/s41586-021-03380-y doi: 10.1038/s41586-021-03380-y
    [2] Aldrich E, Koerner C (2018) White certificate trading: A dying concept or just making its debut? Part 1: Market status and trends. Elec J 31: 52-63. https://doi.org/10.1016/j.tej.2018.03.002 doi: 10.1016/j.tej.2018.03.002
    [3] Anderson T, Parker D (2013) Transaction Costs and Environmental Markets: The Role of Entrepreneurs. Rev Env Econ Policy 7: 259-275. https://doi.org/10.1093/reep/ret011 doi: 10.1093/reep/ret011
    [4] Aspers P, Beckert J (eds) (2011) The Worth of Goods: Valuation and Pricing in Markets, Oxford: Oxford University Press.
    [5] Barrett J, Pye S, Betts-Davies S, et al. (2021) The role of energy demand reduction in achieving net-zero in the UK, Oxford: Centre for Research into Energy Demand Solutions.
    [6] Birch K (2017) Rethinking Value in the Bio-economy: Finance, Assetization, and the Management of Value. Sci Technol Hum Val 42: 460-490. https://doi.org/10.1177/0162243916661633 doi: 10.1177/0162243916661633
    [7] Bertoldi P (2011) Assessment and Experience of White Certificate Schemes in the European Union. European Commission, Directorate General, Joint Research Centre. Available from: https://www.iea.org/media/workshops/2011/aupedee/Paolo_Bertoldi.pdf.
    [8] Bertoldi P, Rezessy S (2006) Tradable certificates for energy savings (white certificates)-theory and practice. EUR 22196 EN. Luxembourg: Institute for Environment and Sustainability, JRC, European Commission.
    [9] BMF (2021) Steps towards an alliance for climate, competitiveness and industry-building blocks of a cooperative and open climate club. Available from https://www.bundesfinanzministerium.de/Content/EN/Downloads/Climate-Action/key-issues-paper-international-climate-club.pdf?__blob=publicationFile&v=4.
    [10] Böhm S, Dabhi S (2009) Upsetting the Offset: The Political Economy of Carbon Markets. London: MayFly.
    [11] Böhm S, Misoczky M, Moog S (2012) Greening Capitalism? A Marxist Critique of Carbon Markets. Organ Stud 33: 1617-1638. https://doi.org/10.1177/0170840612463326 doi: 10.1177/0170840612463326
    [12] Böll H (1963) Murke's Collected Silences. London: Redwood Press.
    [13] Born R (2018) Distributed Ledger Technology for Climate Action Assessment. Zürich: Climate-KIC.
    [14] Bowers J (1997) Sustainability and Environmental Economics: An Alternative Perspective. London: Longman.
    [15] Boscan L, Poudineh R (2016) Flexibility-Enabling Contracts in Electricity Markets. Oxford Energy Comment, July 2016. Available from: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2016/07/Flexibility-Enabling-Contracts-in-Electricity-Markets.pdf.
    [16] Boza-Kiss B, Bertoldi P, Economidou M (2017) Energy Service Companies in the EU-Status review and recommendations for further market development with a focus on Energy Performance Contracting. Luxembourg: Publications Office of the European Union.
    [17] Calel R (2013) Carbon markets: a historical overview. WIREs Clim Change 2013: 107-119. https://doi.org/10.1002/wcc.208 doi: 10.1002/wcc.208
    [18] CEER (2020) CEER Paper on DSO Procedures of Procurement of Flexibility-C19-DS-55-05. Brussels: Council of European Regulators.
    [19] Christidis K, Devetsikiotis M (2016). Blockchains and Smart Contracts for the Internet of Things. IEEE Access 4: 2292-2303. https://doi.org/10.1109/ACCESS.2016.2566339 doi: 10.1109/ACCESS.2016.2566339
    [20] Clark J, Knox-Hayes J (2011) An Emerging Geography of Intangible Assets: Financialization in Carbon Emission Credit and Intellectual Property Markets, School of Public Policy Working Papers, Georgia Institute of Technology.
    [21] Clemens H, Bailis R, Nyambane A, et al. (2018) Africa Biogas Partnership Program: A review of clean cooking implementation through market development in East Africa. Energy Sustain Dev 46. https://doi.org/10.1016/j.esd.2018.05.012 doi: 10.1016/j.esd.2018.05.012
    [22] Coase R (1959) The Federal Communications Commission. J Law Econ 2: 1-40.
    [23] Coase R (1960) The Problem of Social Cost. J Law Econ 3: 1-44.
    [24] Coase R (1998) The New Institutional Economics. Am Econ Rev 88: 72-74.
    [25] Coulon M, Stua M (2015) A Dynamic Mechanism for Transparent and Equitable Distribution of Global Emissions Reductions. SSRN. http://dx.doi.org/10.2139/ssrn.2665100
    [26] Creutzig F, Roy J, Lamb W, et al. (2018). Towards demand-side solutions for mitigating climate change. Nat Clim Chang 8: 260-271. https://doi.org/10.1038/s41558-018-0121-1 doi: 10.1038/s41558-018-0121-1
    [27] Das K (2015) Climate clubs: carrots, sticks and more. Econ Polit Wkly 50: 24-27. https://www.jstor.org/stable/24482588
    [28] De Serres A, Murtin F, Nicoletti G (2010) A Framework for Assessing Green Growth Policies. Organisation for Economic Co-operation and Development Economics Department Working Papers no. 774.
    [29] Dreyfuss R, Frankel S (2015) From Incentive to Commodity to Asset: How International Law is Reconceptualising Intellectual Property. Mich J Int Law 36: 557-602.
    [30] EC (2021) Questions and Answers-Emissions Trading-Putting a price on carbon. European commission. European Commission. Available from: https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_3542.
    [31] Ecosystem Marketplace (2021) EM Insights on Voluntary Carbon Markets. Available from: https://www.ecosystemmarketplace.com/articles/whos-buying-carbon-offsets/.
    [32] EU (2019) Directive (EU) 2019/944 of the European Parliament and of the Council. Official Journal of the European Union L158/125.
    [33] Eyre N, Killip G (eds.) (2019) Shifting the focus: energy demand in a net-zero carbon UK. Oxford: Centre for Research into Energy Demand Solutions.
    [34] Fawcett T, Killip G (2018) Re-thinking energy efficiency in European policy: Practitioners' use of 'multiple benefits' arguments. J Clean Prod 210: 1171-1179. https://doi.org/10.1016/j.jclepro.2018.11.026 doi: 10.1016/j.jclepro.2018.11.026
    [35] Giraudet LG, Bodineau L, Finon D (2012) The cost and benefits of white certificates schemes. Energy Effic 5: 179-199. https://doi.org/10.1007/s12053-011-9134-6 doi: 10.1007/s12053-011-9134-6
    [36] Grubler A, Wilson C, Bento N, et al. (2018) A low energy demand scenario for meeting the 1.5C target and sustainable development goals without negative emission technologies. Nat Energy 3: 515-527. https://doi.org/10.1038/s41560-018-0172-6 doi: 10.1038/s41560-018-0172-6
    [37] IEA (2017a) Market-based Instruments for Energy Efficiency-Policy Choice and Design. Paris: International Energy Agency.
    [38] IEA (2017b) Energy Efficiency 2017. Paris: International Energy Agency.
    [39] Imbault F, Swiatek M, de Beaufort R, et al. (2017) The green Blockchain-Managing decentralized energy production and consumption. IEEE. https://doi.org/10.1109/EEEIC.2017.7977613 doi: 10.1109/EEEIC.2017.7977613
    [40] IPCC (2014) AR5 Synthesis Report: Climate Change 2014. Geneva: Intergovernmental Panel on Climate Change.
    [41] IPCC (2018) Global Warming of 1.5 ℃. Geneva: Intergovernmental Panel on Climate Change.
    [42] Karltorp K, Guo S, Sanden B (2017). Handling financial resource mobilisation in technological innovation systems-The case of Chinese wind power. J Clean Prod 142: 3872-3882. https://doi.org/10.1016/j.jclepro.2016.10.075 doi: 10.1016/j.jclepro.2016.10.075
    [43] Kitchin R (2014) The Data Revolution: Big Data, Open Data, Data Infrastructures and their Consequences. London: Sage.
    [44] Knox-Hayes J (2010) Creating the Carbon Market Institution: Analysis of the organizations and relationships that build the market. Compet Change 14: 176-202. https://doi.org/10.1179/102452910X12587274068277 doi: 10.1179/102452910X12587274068277
    [45] Kondziella H, Bruckner T (2016) Flexibility requirements of renewable energy based electricity systems: a review of research results and methodologies. Renew Sust Energ Rev 53: 10-22. https://doi.org/10.1016/j.rser.2015.07.199 doi: 10.1016/j.rser.2015.07.199
    [46] Kornberger M, Justesen L, Koed Madsen A, et al. (Eds.) (2015) Making Things Valuable. Oxford: Oxford University Press.
    [47] Kragh-Furbo M, Walker G (2018) Electrictiy as (Big) Data: Metering, spatiotemporal granularity and value. Big Dat Soc 5: 1-12. https://doi.org/10.1177/2053951718757254 doi: 10.1177/2053951718757254
    [48] Leonelli S (2014) What difference does quantity make? On the epistemology of Big Data in biology. Big Dat Soc 1: 1-11. https://doi.org/10.1177/2053951714534395 doi: 10.1177/2053951714534395
    [49] Lohmann L (2012) Financialization, commodification and carbon: The contradiction of neoliberal climate policy. Soc Regist 48: 107.
    [50] Lütken S (2017) Foreword, In: Stua M., From the Paris Agreement to a Low-Carbon Bretton Woods, Cham: Springer, ix-xii. https: //doi.org/10.1007/978-3-319-54699-5
    [51] Luttrell C, Loft L, Fernanda Gebara M, et al. (2013) Who should benefit from REDD+? Rationales and realities. Ecol Soc 18: 54. http://dx.doi.org/10.5751/ES-05834-180452
    [52] MacKenzie D (2009) Making things the same: Gases, emission rights and the politics of carbon markets. Account Org Soc 34: 440-455. https://doi.org/10.1016/j.aos.2008.02.004 doi: 10.1016/j.aos.2008.02.004
    [53] Marcantonini C, Teixido-Figueras J, Verde S, et al. (2017) Low-carbon Innovation and Investment in the EU ETS. Florence School of Regulation Policy Brief 2017/22. Florence: Florence School of Regulation.
    [54] Mears A, Martin J (2020) Fully Flexible Loads in Distributed Energy Management: PV, Batteries, Loads and Value Stacking in Virtual Power Plants. Eng London 6: 736-738. https://doi.org/10.1016/j.eng.2020.07.004 doi: 10.1016/j.eng.2020.07.004
    [55] Mehling M, van Asselt H, Das K, et al. (2018) Beat Protectionism and Emissions at a Stroke. Nature 559: 321-324. https://doi.org/10.1038/d41586-018-05708-7 doi: 10.1038/d41586-018-05708-7
    [56] Meyer A (2000) Contraction and convergence: The global solutions to climate change. Cambridge: Schumacher Briefings Paperback.
    [57] Michaelowa A (Ed.) (2012) Carbon Markets of Climate Finance? Abingdon: Routledge.
    [58] Morris S (2012) Armstrong DLW GmbH vs Winnington Networks Ltd. EWHC 10 (Ch). Available from: http://www.bailii.org/ew/cases/EWHC/Ch/2012/10.html.
    [59] Nolden C, Sorrell S, Polzin F (2016) Catalysing the energy service market: The role of intermediaries. Energ Policy 98: 420-430. https://doi.org/10.1016/j.enpol.2016.08.041 doi: 10.1016/j.enpol.2016.08.041
    [60] Nolden C, Stua M (2020) Carbon and Climate, In: Parker M (ed.), Life After COVID-19-The Other Side of Crisis, Bristol: Bristol University Press, 135-144.
    [61] Nordhaus W (2015) Climate clubs: Overcoming free-riding in international climate policy. Am Econ Rev 105: 1339-1370. https://doi.org/10.1257/aer.15000001 doi: 10.1257/aer.15000001
    [62] North D (1990) Institutions, institutional change and economic performance. Cambridge: Cambridge University Press.
    [63] Palmer PI, O'Doherty S, Allen G, et al. (2018) A measurement-based verification framework for UK greenhouse gas emissions: An overview of the Greenhouse gAs Uk and Global Emissions (GAUGE) project. Atmospheric Chem Phys 18: 11753-11777. https://doi.org/10.5194/acp-18-11753-2018 doi: 10.5194/acp-18-11753-2018
    [64] Parag Y, Butbul G (2018) Flexiwatts and seamless technology: Public perceptions of demand flexibility through smart home technology. Energy Res Soc Sci 39: 177-191. https://doi.org/10.1016/j.erss.2017.10.012 doi: 10.1016/j.erss.2017.10.012
    [65] Pei Q, Liu L, Zhang D (2013) Carbon emission right as a new property right: rescue CDM developers in China from 2012. Int Environ Agreem P 13: 307-320. https://doi.org/10.1007/s10784-012-9191-0 doi: 10.1007/s10784-012-9191-0
    [66] Penasco C, Diaz Anadon L, Verdolini E (2021) Systematic review of the outcomes and trade-offs of ten types of decarbonization policy instruments. Nat Clim Chang 11: 257-265. https://doi.org/10.1038/s41558-020-00971-x doi: 10.1038/s41558-020-00971-x
    [67] Peskett L, Brodnig G (2011). Carbon rights in REDD+: exploring he implications for poor and vulnerable people. Washington DC: World Bank and REDD-net.
    [68] Pigou A (1932) The Economics of Welfare. London: Macmillan.
    [69] Pihl H (2020) A Climate Club as a complementary design to the UN Paris agreement. Pol Design Pract 3: 45-57. https://doi.org/10.1080/25741292.2019.1710911 doi: 10.1080/25741292.2019.1710911
    [70] Pirlot A (2021) Carbon Border Adjustment Measures: A Straightforward Multi-Purpose Climate Instrument? J Environ Law. https://doi.org/10.1093/jel/eqab028 doi: 10.1093/jel/eqab028
    [71] Ringinus A, Torvanger A, Underdal A (2002) Burden sharing and fairness principles in international climate policy. Int Environ Agreements 2: 1-22. https://doi.org/10.1023/A: 1015041613785 doi: 10.1023/A:1015041613785
    [72] Rinkinen J, Shove E, Marsden G (2021) Conceptualising Demand-A distinct approach to consumption and practice. Abingdon: Routledge.
    [73] Rosenow J, Cowart R, Thomas S (2019) Market-based instruments for energy efficiency: a global review. Energy Effic 12: 1379-1398. https://doi.org/10.1007/s12053-018-9766-x doi: 10.1007/s12053-018-9766-x
    [74] Schneider L (2011) Perverse incentives under the CDM: an evaluation of HFC-23 destruction projects. Clim Pol 11: 851-864. https://doi.org/10.3763/cpol.2010.0096 doi: 10.3763/cpol.2010.0096
    [75] Sergson K (2013) Price Instruments, In: Shogen J (ed.), Encyclopedia of Energy, Natural Resource, and Environmental Economics, Elsevier, 3: 185-192.
    [76] Shove E (2018) What is wrong with energy efficiency? Build Res Inf 46: 779-789. https://doi.org/10.1080/09613218.2017.1361746 doi: 10.1080/09613218.2017.1361746
    [77] Sirkis A, Hourcade JC, Dasgupta D, et al. (2015) Moving the trillions: A debate on positive pricing of mitigation actions. Rio de Janeiro: Brasil No Clima.
    [78] Sorrell S (2007) The economics of energy service contracts. Energ Policy 35: 507-521. https://doi.org/10.1016/j.enpol.2005.12.009 doi: 10.1016/j.enpol.2005.12.009
    [79] Stavins R (2001) Experience with Market-Based Environmental Policy Instruments. Washington DC: Resources for the Future.
    [80] Steinberger J, van Niel J, Bourg D (2009) Profiting from negawatts: Reducing absolute consumption and emissions through a performance-based energy economy. Energ Policy 37: 361-370. https://doi.org/10.1016/j.enpol.2008.08.030 doi: 10.1016/j.enpol.2008.08.030
    [81] Stua M (2013) Evidence of the clean development mechanism impact on the Chinese electric power system's low-carbon transition. Energ Policy 62: 1309-1319. https://doi.org/10.1016/j.enpol.2013.07.039 doi: 10.1016/j.enpol.2013.07.039
    [82] Stua M (2017) From the Paris Agreement to a Low-Carbon Bretton Woods. Cham: Springer International Publishing. https://doi.org/10.1007/978-3-319-54699-5
    [83] Stua M, Nolden C, Coulon M (2022) Climate clubs embedded in Article 6 of the Paris Agreement. Resour Conserv Recycl 180: 106178. https://doi.org/10.1016/j.resconrec.2022.106178 doi: 10.1016/j.resconrec.2022.106178
    [84] UK Government (2018) Smart meters: a guide. Available from: https://www.gov.uk/guidance/smart-meters-how-they-work.
    [85] UNEA (2019) The Case for a Digital Ecosystem for the Environment: Bringing together data, algorithms and insights for sustainable development. Nairobi: United Nations Environment Assembly and Science Policy Business Forum.
    [86] UNEP (2018) Emissions Gap Report 2018. Nairobi: United National Environment Programme.
    [87] UNFCCC (2015) The Paris Agreement. Bonn: United Nations Framework Convention on Climate Change.
    [88] Weischer L, Morgan J, Patel M (2012) Climate clubs: Can small groups on countries make a big difference in addressing climate change? RECIEL 21: 177-192. https://doi.org/10.1111/reel.12007 doi: 10.1111/reel.12007
    [89] Williamson O (1985) The Economic Institutions of Capitalism. New York: Free Press.
    [90] World Bank (2018) Blockchain and Emerging Digital Technologies for Enhancing Post-2020 Climate Markets. Washington DC: World Bank.
  • Reader Comments
  • © 2022 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0)
通讯作者: 陈斌, bchen63@163.com
  • 1. 

    沈阳化工大学材料科学与工程学院 沈阳 110142

  1. 本站搜索
  2. 百度学术搜索
  3. 万方数据库搜索
  4. CNKI搜索

Metrics

Article views(1358) PDF downloads(185) Cited by(1)

Article outline

Figures and Tables

Tables(4)

Other Articles By Authors

/

DownLoad:  Full-Size Img  PowerPoint
Return
Return

Catalog