Why carbon trading doesn't work

A positive of the recession is that because European economic growth has stalled, so has the increase in CO2 emissions. To such an extent that the market is now awash with worthless carbon credits. Hence, there is currently little incentive for businesses to invest in low-carbon technologies. There's also the problem that in a recession, businesses tend not to make as much capital investment.
In theory, if and when demand picks up, CO2 emissions will also pick up and there could be a shortage of carbon credits. By which time, it'll be too late! There will have been 4 or more wasted years in which investment in low-carbon technology has been too low, due to a combination of lack of incentives to invest and lack of money. What hasn't helped is that governments have spent money on scrappage schemes, propping up a failed car industry that is making too many cars that people don't want to buy, and failed to set the foundations for a green economy.

The carbon trading system as it is currently structured has at its heart a fundamental paradox: if you succeed in curbing CO2 emissions, then you reduce the incentive to further reduce them. Businesses that didn't invest in low-carbon technologies can pick up cheap carbon credits. In other words, businesses that did the right thing and invested in low-carbon technology are saddled with the capital costs but have little or no cost advantage over those who didn't. In even simpler terms, they didn't think this through. They didn't stress-test the carbon-trading model under a perfectly forseeable event - a recession. Eejits.