Keywords: carbon markets, carbon market development, carbon trading, emissions trading, new institutionalism, institutional change, regime formation, regime change, market–based instruments, flexible instruments, CDM, Kyoto Protocol, REDD+, , deforestation, sinks, forest degradation, developing countries
Explaining the construction of global carbon markets: REDD+ as a test case?
Market–based instruments increasingly shape international environmental governance. Against this background, this paper puts forward a conceptual framework on the development of regulated global carbon markets. Regarding the adoption of carbon trading as an instance of wider shifts in governance allows us to benefit from the rich literature on (international) institutional change. At the same time it enables us to integrate existing social science accounts of the construction of carbon markets into a more generic conceptualisation. An analytical framework is suggested that models a set of five (recursively interacting) factors as causes of and influences on the development of international carbon markets: actor interests; power distribution; discourses; institutional dynamics and interaction; and exogenous shocks. The framework is applied to the empirical example of the emerging UNFCCC mechanism for 'Reducing Emissions from Deforestation and Forest Degradation in Developing Countries' (REDD+). Finally, the generalisability of the findings is discussed.