International carbon markets have grown quickly in recent years, but have also experienced serious problems and faced harsh criticism. This paper looks at the history of climate science, at how the economics of emissions trading developed, and at the formation of international institutions to address climate change. From this historical perspective it appears that climate change was a problem in need of a solution, and that emissions trading was a solution in search of bigger and bigger problems to solve. The political pressure to reach an international climate agreement was building rapidly in the 1990s, and the resulting marriage of climate change and carbon markets occurred before the quality of the match could be adequately assessed. Many of the problems with international carbon markets can, at a fundamental level, be traced to this imperfect match. This panoramic historical perspective draws attention to the fact that climate change is a very different kind of pollution problem than emissions trading was originally designed to remedy. This helps shed light on recent experiences, and on how international carbon markets must change to provide the benefits they promise
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