The problems of markets: science, norms and the commodification of carbon

Market-based approaches to commons problems have attracted considerable interest and claim various successes in managing environmental issues. Yet in order to apply market-based approaches to environmental problems we need to have both a good understanding of the dynamics of the system which we are commodifying, and a good, or at least shared, understanding of the criteria against which the policy is to be evaluated. In many settings within natural resource economics these are often taken for granted, or assumed to be relatively straightforward to obtain. Yet, as illustrated by the development of carbon markets in the context of climate change, structural problems can arise from a limited scientific understanding of system dynamics or of resource fluxes, or from inadequate framings of complex problems.