The climatic consequences of the way we live may be the greatest challenge humanity has ever faced. The challenge does not necessarily lie in the immense actions that need to be concerted to confront it, but rather in how difficult it is to grasp. Although by now most have realized that something is wrong with the weather, the real consequences of the dramatic shifts in the climate, which are being warned against by climate scientists in ever more alarming phrasing, still seem like science fiction. Moreover, while we can calculate – and have calculated – the cost of inaction, and realize that it may be cheaper to prevent the problem, we are much better at accommodating the costs of natural disasters that require immediate relief, rather than replacing perfectly functional, even brilliantly engineered, technology that just is not compatible with a zero-emission future. In all likelihood, therefore, we may have to depend on our eminent adaptation skills when faced with the clear and present dangers – dangers that will only become clearer as emissions continue to grow.

Structured negotiations on meeting the climate challenge have been on-going since 1992. Compared to the amount of time it has taken to build the carbon-based economy, that is not very long – particularly when considering that what is fundamentally being negotiated is the dismantling of this carbonbased economy. With hydrocarbons deeply entrenched in the economic system, and promises of wealth still embedded in exploration in a growing number of developing countries, having 200 countries arrive at a consensus to forego such promises of wealth takes more than a science-fiction-like warning.

In this respect, negotiations have brought about a rather swift pricing of carbon emissions. The Kyoto Protocol in 1997 managed to set a cap on emissions, however limited, and allowed trading in emission allowances, thus effectively taxing hydrocarbons. The flagship of the Kyoto Protocol, the Clean Development Mechanism (CDM), even brought the carbon price to developing economies promising rents from developed countries’ carbon market if emissions were reduced on a project-by-project basis. Project-based carbon accounting systems were established, trading models were developed and a whole new industry was created in the process. In those 17 short years the global challenge was faced, a global architecture was established, a market mechanism was developed and operated – and wrecked.