On the borders of the market: EU emissions trading, energy security, and the technopolitics of 'carbon leakage'

The difficulties of organizing emissions trading in line with the principles of economics have led economic sociologists to interrogate the significance of political compromises and technical conditions to the performance of markets. This article argues that sociological studies of 'techno-politics' should be complemented with a geographical perspective concerned with how such market experiments are territorialized in relation to wider socio-technically distributed practices. Focusing on the setup of a regionally concentrated and integrated European market for carbon, it investigates a particular compromise made between climate and energy policies in the post-2012 trading rules for the electricity sector: a nexus created between the risks of energy insecurity, competitive disadvantage, and 'carbon leakage'. The resistance of EU border states to carbon pricing has enabled 'carbon leakage' to be re-conceptualized as a threat of transferring electricity generation to non-market suppliers, which reinforces state-centred strategies of carbon-intensive production. This case evidences three fundamentally spatial predicaments of technopolitics, contributing to geographical studies of marketization. Firstly, the politics of allocating emissions allowances is exacerbated by the territorial premises of the market that bring neoliberal forms of governing climate change into conflict with state sovereignty claims. Secondly, the technical aspects of calculating carbon exchange cannot be dissociated from other transboundary modes of circulation in the market region, such as electricity transmission networks. Thirdly, experiments with carbon marketization can have spatially differentiated effects, challenging the enclosure of market territory and creating a contentious 'frontier region' with distinct trading rules on the borders of the market.