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The Economist this week published a cover story called “The World’s Lungs,” about the transition to a forest-preserving rather than forest converting world ( The article mentions REDD, but reduces it to “pay(ing) people in developing countries to leave trees standing.” That’s not inaccurate, but it misses the critical point about how the payment occurs: As part of regional and global markets for GreenHouse Gas (GHG) emission reductions. The Kyoto Protocol had begun to institute global cap-and-trade markets, with various instruments representing various kinds and locations of emissions reductions. Kyoto hadn’t yet embraced deforestation abatement, but other regional systems (such as Europe’s) began to allow such off-sets into their own markets. In the wake of the disappointing Copenhagen convention, which had been hoped to advance what Kyoto had started, it is beginning to look like the world will be progressing in the form of regional and national GHG emissions abatement markets, linking together through such things as developing country REDD off-sets.

I am one of those rare birds who is a big fan of carbon markets, not because they are in all or most cases currently the best approach, but because they offer the best long-term promise to give us one more powerful tool with which to tackle a variety of public goods and public bads, across national boundaries. As strange as it may sound now, and as technically challenging as it would be, we could conceivably, in the somewhat distant future, create violence abatement markets, and human rights violations abatement markets, and goodwill credit markets…, whatever we can imagine as public goods and bads that we want to promote or discourage (see Political Market Instruments).

Buy my e-book A Conspiracy of Wizards

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