UN Sec-Gen Ban Ki-Moon has ordered all UN agencies to toe the line supported by the banksters and WBCSD (the lobby of the big non-oil multinationals) -- to finance the "green economy" not by direct aid or by taxing international financial speculators, but by carbon markets (CDM, REDD, PES) without adequate safeguards on additionality, informed consent of vulnerable populations e.g. in UNDRIP, human rights guarantees, or an appeal procedure. This will create a carbon casino, a new bubble that will end in another economic bust -- while adding to poor countries' debt burden, and distorting "development".
By banksters, I mean the crowd who brought you the world-economy meltdowns of 2000 and 2007, the bailouts that your children and grandchildren will still be paying for, toothless "regulation" of international financial speculation in Basel III, the jobless recovery, and now expect to make a killing in unregulated carbon markets. A real killing: an estimated 300,000 die yearly from the impacts of climate change. The perps include the usual suspects: big banks, indistinguishable from vulture cap and OTC finance since the abolition of the Glass-Steagall law, the Bretton Woods institutions they control (IMF, World Bank), bound up together in the Washington Consensus that keeps the Third World in abject poverty. The same powers refuse direct aid to the world's poor -- when aid comes, it takes the form of debt that forces fire-sale prices of state assets and natural resources, or is "tied" to products and service of the donor country, i.e. just another subsidy to corporate lobbyists. The UN refers to the triple crisis of food, climate and fuel; phony "aid" worsens all three.
UNEP-RONA civil consultations Oct 13-15 (see our previous reports) are intended to get well-meaning NGOs and faith groups to back the UN's Rio+20 "green economy" deal -- without safeguards for indigenous peoples, with no appeal mechanism nor adequate MDG financing. Less than a week later the UNEP Finance Initiative will launch the carbon market scheme in Washington, pre-empting both Durban and Rio.
The climate deal with the banksters will be sealed before people even know about it.
Look at this sequence of events:
3-5 Sep UNEP Global Consultation with Major Groups and Stakeholders on Rio+20, September 1, 2011 and the 64th Annual UN DPI: NGOs Conference, Bonn where European NGOs called for: 1. A ‘green’ economic system [that] must promote social equity, gender equity and intergenerational equity. A truly sustainable ‘green economy’ [that] functions within the limits of the planet, and ensures a fair distribution of resources among all countries and social groups - as well as between men and women. We need an economy that provides incentives for zero-waste, low-carbon economies that enhance and restore the natural environment, while also providing new ‘green’ livelihoods, employment and entrepreneurial opportunities for women as well as men. That is why 10 YFP SCP implementation should be the basis of Green Economy policies.
2. In order to achieve a truly green economy, we need better regulation of international financial actors and financial flows. Specific instruments to achieve a greening of the economy were proposed ...
- New indicators for well-being. It is in the interest of youth and future generations,that bold steps will be taken towards a green economy in the context of sustainable development and
poverty eradication. In order to achieve the transition to green economies, the actual political
implementation of concepts such as new (set of) indicators for measuring development and the
internalisation of external costs must ensured and backed up by effective governance systems.
- Planetary boundaries to be assessed and made the basis of decision-making on the basis of best
available scientific knowledge, taking into account the precautionary principle
- The introduction of a global Financial Transaction Tax [on international transfers], to contribute to financing protection of our global commons and of sustainable development and investments in green and inclusive economies.
- Eco-efficiency instruments are important, but there is also a need for ‘sufficiency’ instruments(social innovation, caps on resource use, …), especially in the Northern countries to tackle the over-consumption of -- and excessive pressure on -- natural resources. 3. Independent Technology Assessment... 4. Nuclear and uranium lifecycle control...
These repeated NGO demands, beginning at COP-15 in Copenhagen, have been studiously ignored by the UN, WBCSD, G20 and Washington Consensus. By no coincidence, they would slow down speculation. Wall St, the City and the gnomes of Zurich hate the FTT and will do anything to stop it.
Oct 13-14 UNEP-RONA Regional civil society consultation for North America, Washington
Oct 19-20 UNEP Finance Initiative, Washington DC - its Global Roundtable. Look at the program and speakers for day 1 and day 2. If that ain't "the fix is in" I'm a lousy analyst. Confirmed participants include:
Accession International, Inc.
Acciona Energia Mexico
AE
ALIDE-Latin American Association of Development Financing Institutions
American University
APG Asset Management US Inc
Argo Insurance Group
ASN Bank
ASOBANCARIA
Aviva Investors
AXA Group
Banco Bradesco Banco do Brasil Banco Rabobank International Brasil S.A. Banco Santander Brasil BANCOLDEX S.A. BANCOLOMBIA Bank of America Merrill Lynch Bank of Montreal Banking Association South Africa Barclays PLC BECAUSE Bentall Kennedy (U.S.) LP Bernstein Center, Columbia University BICBANCO Bloomberg BNDES BNP PARIBAS BNY Mellon Brazilian Federation of Banks Brown & Co BSD Consulting BSR
Caisse des Depots, Québec CalPERS Calvert Investment Cambridge Programme for Sustainability Leadership Carbon Disclosure Project Carbon War Room cent.Force CO.,LTD Ceres, Inc. CFA Institute Change Logic LLC China Development Bank China Merchants Bank CIBC Citigroup ClearBridge Advisors Colonial First State Global Asset Management (Commonwealth Bank of Australia) Commercial Mortgage Alert Connexis Strategy Consultants Conservation International CREDIT ANDORRA Credit Suisse Cybaxx Enviromental Service Co. Ltd
DEG Deloitte Desjardins Group DEUTSCHE BANK Division for Sustainable Development, UN DESA DnB NOR DVFA
EarthSea EBF EBRD ECOFACT AG Econoler ecos Ecosystem Marketplace EFIC EIRIS Embassy of France Environmental Law Institute EPA Ethical Markets Media (USA and Brazil) Eurizon Capital EUROBANK EFG European Bank for Reconstruction and Development Evironmental Resources Management
F&C REIT Asset Management FD FGVces FirstRand Limited FirstRand Ltd FMO Forest Footprint Disclosure Project Fox School of Business, Temple University Fundaciao Social
GiCaP Products GIIRS Global Energy Assessment Global Leadership Interlink GLOBE Foundation GUARDIAN HOLDINGS LIMITED
Handelsbanken Harvard Business School Helm Group Hermes Focus Asset Management Ltd HSBC Bank plc
Indepedent Consultant Industrial and Commercial Bank of China Industrial Development Corporation Inflection Point Capital Management Infrastructure Leasing & Financial Services Ltd Insurance Australia Group Inter-American Development Bank Inter-American Development Bank Inter-American Development Bank International Finance Corporation International Institute for Sustainable Development IRRC Institute Itau Unibanco
Jones Lang LaSalle Incorporated JPMorgan
KfW KPA Pension KPMG
Macquarie Bank Manulife Financial MaRS Discovery District mecu Limited Ministry of Economic Affairs, Netherlands MINISTRY OF NIGER-DELTA, Nigeria Mizuho Corporate Bank, Ltd. MSCI, Inc. Munich Re Munich Reinsurance Company Mutualista Pichincha
National Academy of Sciences National Association of Insurance Commissioners, USA National Institute of Advanced Industrial Science and Technology, Japan National Round Table on the Environment and the Economy, Canada Nedbank Ltd
Oceanic Insurance Group OPIC
Pace Law School Pacific Institute Pax World Management LLC Portfolio 21 Investments Principles for Responsible Investment PROFONANPE PRUPIM
Rabobank Nederland Raiffeisen Zentralbank Austria AG RBC Capital Markets Renco Technologies Private Ltd. Royal Bank of Canada Royal instute of thecnologhy ROYAL MICROFINANCE OF ZAMBIA LIMITED
Samsung Fire and Marine Insurance Santam Santander Brazil Sarah Cleveland SEB Shell Oil Company Social Investment Organization Societe Generale Sovereign SSgA Standard Bank State Street Corporation State Street Global Advisors Sumitomo Mitsui Financial Group Sustainable Business Institute (SBI) Sustainable Prosperity Sustainalytics Swiss Re
TD Bank Group The Conference Board The Co-operators Group Ltd. The George Washington University Law School The Jervey Group The Northern Trust Company The Sumitomo Trust and Banking Co., Ltd. The Transition Group The World Bank Trillium Asset Management, LLC
U.S. Environmental Protection Agency U.S. General Services Administration U.S. Green Building Council U.S. House Natural Resources Committee
UBS UNDP UNFCCC UniCredit Uniethos United Nations Foundation University of Cambridge Programme for Sustainability Leadership University of Waterloo US Agency for International Development US Department of Energy
Village Corps Virgin Islands Legislature
Washington State Insurance Commissioner’s Office WestLB Willis World Economic Forum World Green Building Council World Resources Institute WWF China WWF US WWF-SA
XL Insurance
Zenith Bank PLC
And at the Jan 2012 Climate Finance & Carbon Markets Africa: Ariesta Ningrum, Team Lead, Sustainable Development Mechanisms, UNFCCC
Nelly Magubane, Director General, Department of Energy, South Africa
Adam Simcock, CEO, Carbon Check, South Africa
Geoff Sinclair, Head of Carbon Trading, Standard Bank, UK
Kevin Whitfield, Head, African Treasury and Financial Products Unit, Nedbank Capital, South Africa
Henk Sa, Managing Director, Ecometrix, South Africa
Antoine Degri, CEO, ADERCI, Ivory Coast
Ntombifuthi Ntuli, Business to Business Programme Officer, Danish Embassy, South Africa
Enoch Lerato Liphoto, Senior Advisor, Climate Change, Eskom Holdings, South Africa
Hussein Elhag, Executive Director, Africa Energy Commission, Algeria
Georges Bakaly, Managing Director, WESD Capital, DRC
Bubu Jallow, Chief Technical Adviser, Department of Water Resources, The Gambia
Amos Wafula Wekesa, Environmental and Climate Change Advisor, VI-Agroforestry Programme Eastern Africa, Kenya
Philippe Decq, Sales and Marketing Manager, South Europe,Africa and Middle East, DnV, France
Ciska Terblanche, Managing Director, CDM Africa, South Africa
Heba Rabie, Regional Manager, Africa and Middle East, The Gold Standard Foundation, Egypt
Carbon trading lies at the centre of global climate policy and is projected to become one of the world’s largest commodities markets, yet it has a disastrous track record since its adoption as part of the Kyoto Protocol's Clean Development Mechanism (CDM) administered by the UN.
Carbon Trading: how it works and why it fails (2009), by Oscar Reyes and Tamra Gilbertson, in Dag Hammarskjöld Foundation's Critical Currents series, shows the limitations of climate action within the assumptions of neoliberal economics. The EU Emissions Trading Scheme, the world’s largest carbon market, has failed to 'cap' emissions, while the Kyoto CDM routinely favours environmentally ineffective and socially unjust projects. Examples are given from CDM projects in Brazil, Indonesia, India and Thailand.
Cancún, the UN "green economy" and Rio+20 campaign, all propose ways of expanding the trading experiment -- with Copenhagen Accord pledges, REDD+, and PES. This report says it should be abandoned. There are many ways forward without carbon trading – subsidy shifting, energy efficiency, regulation and an FTT tax on financial speculation -- but there are no "market" short-cuts if climate change is to be addressed in a just and fair manner.
"Anyone who still thinks that creating a carbon casino can solve our climate crisis owes it to themselves to read this book. The most convincing and concise challenge to the green profiteers yet."Naomi Klein, author, The Shock Doctrine.
"Carbon markets are less about reducing emissions than making carbon cuts as cheap as possible for large corporations." – Maud Barlow, Blue Planet Project.
"The Copenhagen Accord effectively kills Kyoto, replacing it with voluntary commitments –- ineffective and dangerous. The Cancún text systematically excludes Cochabamba proposals of the World Peoples' Conference on Climate Change: full recognition of indigenous rights, rights for nature, an appeal tribunal. It gives a green light to REDD, rewarding those responsible for deforestation while dispossessing indigenous and forest dwellers." – Nick Buxton, Transnational Institute (TNI)
This is one of the best explanations I have seen of the dangers of "market mechanisms" such as REDD, lacking proper MRV monitoring, lacking safeguards for campesinos and indigenous peoples, lacking legal appeal or sanctions. The IPCCAis a partnership of UNPFII and a number of indigenous groups in Africa, Asia, South America and Europe. Project Word's mandate is to publish such stories, which the corporate media have persistently ignored. - Ed.
Forget any spin. In the end, the recent UN gathering on climate change in Cancún repeated Copenhagen’s failure in 2009. Again, the world’s industrial economies refused to set new binding reductions in greenhouse gas emissions, despite dire warnings by scientists. Instead, delegates again vaguely promised money for climate adaptation and mitigation: this time $30 billion to the developing world by 2012, and $100 billion more by 2020.
Once more, the industrialized countries appear to have pledged much of this money in a salvage measure dubbed “REDD’’ — Reduced Emissions from Deforestation and Forest Degradation in Developing Countries.
Established by wealthy nations, venture capitalists, the World Bank, and the United Nations, REDD would pay for the carbon absorbed in developing countries, to compensate for pollution caused by industrialized countries. The initiative would allow polluters to buy carbon credits from companies, communities, non-government organizations, or countries that promise not to destroy forests for a specific period. To polluters, setting aside money for carbon absorption in a REDD forest is far less costly than reducing emissions at tailpipes or smokestacks.
But even if it works — itself a point of contention — this carbon-offsetting simply postpones any weaning off the fossil-fuel economy.
Perhaps the people least impressed by this half-measure are the ones who most urgently need a solution to climate disruption. From the Amazon basin to the African savannahs, traditional indigenous peoples depend directly on their local environment for sustenance, and so they are the most vulnerable to climate change. At Cancún, indigenous leaders again watched as REDD technocrats tried to “save’’ their territorial forests as global carbon sinks, instead of cutting their own countries’ emissions.
REDD can target the tropical forests exactly because indigenous communities have carefully preserved them for many thousands of years. But the initiative seems to have little use for the forest inhabitants themselves. The UN climate talks relegate indigenous peoples to “observer’’ status. At least eight national REDD plans funded by the World Bank would allow bans on the kind of small-scale, biodiverse farming that is practiced by many indigenous peoples and is misnamed “slash and burn.’’ At the same time, at least 19 of the plans explicitly contain provisions for tree plantations, which displace forest dwellers, degrade biodiversity, and cause high fire risk. Plantations are tolerated under the United Nations’ definition of forests. They satisfy carbon investors who like precise measurement and predictability — not messy, biodiverse forest habitat.
This mentality inspires what critics call “fortress conservation’’: non-government organizations and national authorities cordon off land to protect species and institute carbon-offset projects, driving out of their forests the indigenous stewards, who become “conservation refugees.’’ John Nelson, Africa policy adviser for the Forest Peoples Program, estimates that some 150,000 to 200,000 people in the Congo basin alone have suffered this fate.
“Imagine waking up one day,’’ he says, “to find a boundary outside your village — with armed paramilitary guards telling you that you cannot enter the forest.’’ If people cannot go there, they cannot teach their children how to live in the traditional ways, and these ways, with all they might have to teach the larger world about storing carbon and repairing forest ecosystems, will be lost. “Mitigation policies of the developed world,’’ Ramiro Batzin, a Keqchikel Maya from Guatemala, recently told the World Bank, “will kill us before climate change does!’’
Despite their long residence in the forests, many indigenous peoples have fought for decades to establish legal title to the land. But nothing at Cancún required REDD programs to establish or secure those rights, or to obtain genuine consent for projects in indigenous communities.
This neglect, and the fortress conservation it allows, is not only an injustice but also a missed opportunity. Studies have shown that traditional land management, when title is secured, sinks carbon far more effectively and cheaply than conventional efforts favored by REDD.
The Emberá of Panama, like the Ogiek of Kenya, have been the stewards of the land for millennia. But at best REDD would promise them compensation — and a dubious dependence on a cash economy, which tends to erode traditional culture. Especially in an age of climate chaos, the erosion of such stewardship is unacceptable. And in any case, nobody should mistake the initiative for a real solution to a changing climate. That remains what it was in Kyoto, and what it will be later this year in Durban: cut greenhouse gas emissions.
Patrick Bond is a South African ecojustice activist, director of the Centre for Civil Society at the University of KwaZulu-Natal. His publications here. This TED video was recorded 24 May 2010.
Below is a reprint of his article in Pambazuka News14 Oct 2010, to be included in his forthcoming The Politics of Climate Justice.
Patrick Bond: Let us accept Pat Mooney’s six theses about damaging new world trends: Loss of diversity; the threat of shock-therapy bio-engineering; the profusion of state-subsidised technological fixes (mainly unworkable); the disempowerment of those promoting ecologically- and socially-preferable alternatives; amplified state-corporate control over body politics and individual bodies implied by many of these fixes; and ‘corporatist’ politics at global and national scales directly linking state resources to crony-capitalist private profit.
Accepting these premises and turning our attention to Africa, the questions posed in this article are: How do such zany schemes get funded by global capital and multilateral financial institutions? Can we derail the techie agenda with a defunding strategy, by cutting off the financial lifeblood? And following logically: If lack of finance is a barrier to achieving alternative visions, how then might we break that barrier? The most challenging case, in which the money will flow fastest and most inappropriately – and where the need for an alternative, fair and just financing arrangement is most acute – is the climate crisis.
Financing ebbs and flows
Setting aside hard-to-predict Chinese flows or the purchase of vast swathes of African land by other countries (India, South Korea, Saudi Arabia), it does seem that elites lack solid commitments for external financing to make possible both private sector speculative projects and public sector infrastructural investment in Africa. In some periods there is an overflow of such finance, such as the mid/late-1970s, mid/late-1990s and late 2000s, when bubbly Northern markets pushed credit into the pockets – and often the overseas bank accounts – of Africa’s venal rulers, to be repaid by the impoverished masses mainly through intensified mineral and cash crop exports, with structural adjustment programmes as the banker’s squeezing technique.
Then came the 2008-09 economic meltdown, when within a six-month period, half the value on the world’s stock markets disappeared. Credit for even profitable firms became hard to get in the North, much less Africa. Other factors that dried up African financing included the mid-2008 commodity price crash (still nowhere near recovery), ongoing military strife in key sites, and worsening austerity conditions in the many rich donor countries which are cutting bilateral aid. While South Africa has received large financial inflows through emerging-market speculative funds, few private investors would put money into the rest of the continent.
Soon, however, a surplus of official multilateral credit became available, albeit with tight strings attached. Led by the International Monetary Fund (IMF), whose member states granted the institution more than US$750 billion in new lending capacity in 2009, the multilateral banks were financially re-empowered by the crisis. This was highly inappropriate, for their liberalising ideology was a central cause of the contagion, especially the 1990s command to drop capital controls and trade restrictions.
The World Bank, too, has a surplus of monies for investment, hence found it acceptable in April 2010 to dump US$3.75 billion into the largest coal-fired power station on the continent, the Medupi project in South Africa, in spite of myriad problems. But does new-found Bretton Woods Institution wealth translate into African credit-worthiness? The multilateral financiers would like us to accept their affirmative answer, yet the evidence is mixed.
"Africa is growing again"
Judging by a raft of reports in 2009-10, as well as some offhanded comments by the World Bank’s leading economist for Africa, Shanta Devarajan, the neoliberal bloc is promoting a curious argument: Africa’s ‘growth has accelerated since the 1990s’ because ‘these countries adopted exactly the Washington Consensus policies in the mid-1990s… out of their own accord, out of domestic political consensus, rather than imposed from Washington or Paris or London. And I think that’s the point that people are not recognizing, that the actual policies that are generating the growth, are actually very similar to what was criticized in the structural adjustment era’. It is easy to argue with Devarajan – because the ‘growth’ is mythical, since GDP does not record the extraction of non-renewable resources. Once one makes this correction, as even the World Bank did in 2006, the net wealth associated with most African countries’ economies is negative (see Bond vs Devarajan 2010, Devarajan vs Bond 2010).
It is also easy to rebut the hubristic argument that in Africa the Washington Consensus ideology was adopted by ‘domestic political consensus’. And it’s easy to show how ‘growth’ has been so distorted in Africa – accompanied by rising inequality and macroeconomic imbalances – as to be untenable for anything more than building neocolonial rail lines, roads, ports and energy systems aimed solely at extracting more minerals, petroleum and cash crops. Backward-forward linkages and indigenous manufacturing were generally not on any financier’s agenda, and few if any African elites (aside from SA industry minister Rob Davies) have made efforts to balance their economies in a sensible way. As an ideology and political bloc stretching from Washington to the technocrats and politicians who manage every African capital, neoliberalism has simply been impervious to its own recent and soon-to-reappear crises.
Africa's environmental credits
For most foreign investors, Africa has always been a compliant site for not only mineral / petroleum extraction, but also abuse of the continent’s ‘ecological space’. Being on-grid for resource extraction and environmental exploitation in this manner is a curse. The looting of Africa’s environmental resources, the lack of industrial development and the role of the great central African rainforest as a prolific sink for the North’s CO2 emissions, together give rise to the argument that the industrialised powers owe Africa – and many other South sites – a formal debt for using too much ecological space, and for ripping out non-renewable resources in an unsustainable manner.
According to the Ecuador-based advocacy group Accion Ecologica (2000): ‘ecological debt is the debt accumulated by Northern, industrial countries toward Third World countries on account of resource plundering, environmental damages, and the free occupation of environmental space to deposit wastes, such as greenhouse gases, from the industrial countries.’
The leading scientist in the field, Autonomous University of Barcelona’s Joan Martinez-Alier (2003), calculates ecological debt in many forms: ‘nutrients in exports including virtual water, the oil and minerals no longer available, the biodiversity destroyed, sulphur dioxide emitted by copper smelters, the mine tailings, the harms to health from flower exports, the pollution of water by mining, the commercial use of information and knowledge on genetic resources, when they have been appropriated gratis (‘biopiracy’), and agricultural genetic resources.’ As for the North’s ‘lack of payment for environmental services or for the disproportionate use of environmental space,’ Martinez-Alier criticises ‘imports of solid or liquid toxic waste, and free disposal of gas residues (carbon dioxide, CFCs, etc).’
How should this debt be repaid? Simply through forgiving financial debt? More than a quarter century ago, debt-for-nature swaps were pioneered in Latin America as a way local elites could maintain contractual obligations to global finance (thus not losing out on credit ratings and international standing) while *several rather unprincipled international environmental non-governmental organisations (ENGOs) could tap into new donor pools to acquire ‘new enclosures’ for conservation purposes. [*see group 3 in EnvNet -- Ed.]
Kenya violence against indigenes: Intercontinental Cry and Madre.org Many organisations of indigenous people have been outraged, and today formally oppose the latest version of enclosures, the REDD programme ‘Reducing Emissions from Deforestation and Forest Degradation in Developing Countries’(Evo Morales 29 Sep 2010).
Instead of such schemes, whose effects are to permit Northern polluters to continue business as usual and Northern financiers and ENGOs to gain greater control, those responsible for taking advantage of Africa’s natural resources should pay their ecological debt, according to the principle of polluters pay. This is an especially compelling argument, now that there is near-universal awareness of the damage being done by rising greenhouse gas emissions, and by the ongoing stubborn refusal by the rich to cut back.
However, demands by Jubilee South and others for no-strings eco-debt repayment plus dramatic cuts in Northern greenhouse gas emissions – to allow Africa its fair share of future industrial development – are the opposite of the elites’ strategy. Instead of repaying climate credits, the Northern capitalists have drawn African rulers into a financing game they much prefer: Carbon trading.
Carbon credits, not climate debt
In 1997 at the Kyoto Protocol negotiations, the Global North offered to assist Africa financially through Clean Development Mechanism (CDM) projects, in a context of declining overseas development aid associated with the end of the Cold War. Many African elites agreed, along with once reluctant environmental groups. Popular movements were unaware and uninvolved, and expert opinion was mixed about the efficacy and moral implications. The proponents of carbon trading argued that this would be the least painful – and least resisted – means of capping greenhouse gas emissions and allowing economies to adapt to new carbon constraints.
Market mechanisms – especially carbon trading and offsets – allow corporations and governments generating greenhouse gases to seemingly reduce their net emissions. They can do this, thanks to the Kyoto Protocol, by trading for others’ certified emissions reductions (e.g. CDM projects in the Third World) or emissions rights (e.g. Eastern Europe’s ‘hot air’ that followed the 1990s economic collapse).
The pro-trading rationale is that once property rights are granted to polluters for these emissions, even if given not auctioned (hence granting a generous giveaway), a ‘cap’ can be put on a country’s or the world’s total emissions. It will then be progressively lowered, if there is political will. So as to minimise adverse economic impact, corporations can stay within the cap even by emitting way above it, by buying others’ rights to pollute.
Crashing carbon capitalism
Although in 1997, this theory may been plausible, by 2010 it was clear that the main pilots had failed. CDMs fit within the broader carbon markets: roughly 6.5 per cent of the US$125 billion in 2008 trades, a ratio that fell substantially in 2009. For those Africans who bought into carbon trading, there were howls of protest about an obvious injustice: The share of CDM financing to Africa continued to be disproportionately low, around 3 per cent of all CDM projects. Most credits emanated from South Africa, with its huge emissions and large cadre of environmental technical specialists. Per capita CO2 emissions for Africa (green) and developed countries (red) 2002. Libya and South Africa are leading emitters. Click on graph to see details. source: UNEP GRID-Arendal
Given the controversies already evident in myriad European Union Emissions Trading Scheme credibility crises, corruption cases and price volatility problems – with the 2008-09 ‘value’ of a tonne of CO2 falling from €30 at peak to less than €9, before adjusting to around €15 during 2010 – the question emerged whether CDMs were not fundamentally flawed as a strategy for climate financing (Lohmann 2006, 2010). The apparent demise of carbon trading in the 2009-10 legislative session of the US Senate made this strategy a losing proposition not only for Africa but also at the global scale. [see US ACES aka Kerry-Boxer -- Ed.]
Even without the expected Washington gridlock, mainly as a result of sabotage by powerful fossil fuel interests, carbon trading had crashed on its own terms by early 2010. ‘The concept is in wide disrepute’, reported the New York Times (25 March 2010), with US Senator Maria Cantwell explaining that ‘cap and trade’ (the US description) was ‘discredited by the Wall Street crisis, the Enron scandal and the rocky start to a carbon credits trading system in Europe that has been subject to dizzying price fluctuations and widespread fraud.’
But it is to left-wing critics of emissions trading that we turn for a more rounded critique, especially the Durban Group for Climate Justice, founded in 2004 in South Africa. Most in the climate justice movement argue that the carbon market is not working:
The idea of inventing a property right to pollute is effectively the ‘privatization of the air’, a moral problem given the vast and growing differentials in wealth inequalities
Greenhouse gases are complex and their rising production creates a non-linear impact which cannot be reduced to a commodity exchange relationship (a tonne of CO2 produced in one place accommodated by reducing a tonne in another, as is the premise of the emissions trade)
The corporations most guilty of pollution and the World Bank – which is most responsible for fossil fuel financing – are the driving forces behind the market, and can be expected to engage in systemic corruption to attract money into the market even if this prevents genuine emissions reductions
Many of the offsetting projects – such as monocultural timber plantations, forest ‘protection’ and landfill methane-electricity projects – have devastating impacts on local communities and ecologies, and have been hotly contested in part because the carbon sequestered is far more temporary (since trees die) than the carbon emitted
The price of carbon determined in these markets is haywire, making mockery of the idea that there will be an effective market mechanism to make renewable energy a cost-effective investment
There is a serious potential for carbon markets to become an out-of-control, multi-trillion dollar speculative bubble, similar to exotic financial instruments associated with Enron’s 2002 collapse (indeed, many Enron employees populate the carbon markets)
As a ‘false solution’ to climate change, carbon trading encourages merely small, incremental shifts, and thus distracts us from a wide range of radical changes we need to make in materials extraction, production, distribution, consumption and disposal; and
The idea of market solutions to market failure (‘externalities’) is an ideology that rarely makes sense, and especially not following the world’s worst-ever financial market failure, and especially not when the very idea of derivatives – a financial asset whose underlying value is several degrees removed and also subject to extreme variability – was thrown into question.
African advocates of carbon trading
Notwithstanding the chaos and corruption, there are prominent supporters of environment and development – including at least three leading Africans – who continue promoting the emissions trade. For some, this can be attributed to substantial conflicts of interest, which arose in joint roles as climate cooling advocates and carbon traders. According to Michael Dorsey, professor of political ecology at Dartmouth College, ‘After more than a decade of failed politicking [on behalf of carbon trading], many NGO types... are only partially jumping off the sinking ship – so as to work for industries driving the problem. Unfortunately, many continue to influence NGO policy from their current positions, while failing to admit to or even understand obvious conflicts of interest’ (cited in Bond 2009).
In the highest-profile African case, Wangari Maathai, the former Kenyan deputy environment minister and Nobel Peace Prize laureate, such conflicts were not a factor. But there were certainly self-interested reasons for Valli Moosa, South Africa’s former environment minister (1999-2004), to promote carbon trading as minister at the critical 2002 World Summit on Sustainable Development. In the latter half of the 2000s, Moosa went on to preside over the IUCN and chaired the board of the continent’s largest energy company and CO2 emitter, Eskom, and became actively involved in the trade as a sideline. Then in March 2010, he was implicated, as a member of the African National Congress (ANC) financing committee, in unethically channelling tens of millions of rands in earnings to the ruling party by signing Eskom purchase orders for Medupi’s new boilers in a way that directly benefited the ANC, which in turn was financed by the controversial World Bank loan.
Moosa’s successor as minister of environment, Marthinus van Schalkwyk, was an apartheid-era youth spy for the white regime during the 1980s, who took control of the National Party in the late 1990s and then dissolved it into the ANC in exchange for the ministerial position (although in 2009 he was demoted to tourism minister). Van Schalkwyk (cited in Bond, Dada and Erion, 2009) argued in 2006 that ‘The 17 CDM projects in the pipeline in Sub-Sahara Africa account for only 1.7 per cent of the total of 990 projects worldwide. To build faith in the carbon market and to ensure that everyone shares in its benefits, we must address the obstacles that African countries face.’ At the International Emissions Trading Association Forum in Washington a year later, he insisted, ‘An all-encompassing global carbon market regime which includes all developed countries is the first and ultimate aim.’ Van Schalkwyk was nominated by South Africa to replace Yvo de Boer as UN climate negotiations director in early 2010, but his candidacy barely failed (to Costa Rican carbon trader Christiana Figueres).
Maathai, too, promoted carbon trading through her own Greenbelt Movement in the expectation that CDMs and emerging proposals for REDD would reward tree-planting in both her indigenous strategy as well as monocultural timber plantations. She was also the leading proponent of the document ‘Africa speaks up on Climate Change’, which fed into the African Climate Appeal’, a statement which insists upon more CDM finance with fewer strings attached, especially for afforestation: ‘African governments should ensure that there is equity in geographical distribution of CDM projects and that this is entrenched in the international policy process. They should negotiate for the requirement of up front funding of CDM projects to be waived for many African countries who cannot afford it. The appeal calls upon African countries to embark on the development of CDM capacities and projects including capacity building and development of centers of incubation for CDM projects. African governments should explore possibilities of accessing grants to provide upfront funding for CDM projects and also project development and financing through bilateral arrangements’ (Matthai, 2009, p. 4). [no longer available on the Böll Foundation website -- Ed.]
Maathai criticised three existing funds – the Special Climate Change Fund, the Least Developed Countries Fund and the Bali Adaptation Fund – because these funds have not been able to address concerns of African countries on adaptation, namely:
‘[A]ccess, adequacy and equitable geographical distribution. The funds are largely inadequate and inappropriately structured; currently relying on a 2 percent levy on CDM projects. Access to the funds has been made difficult, among others, by bureaucratic bottlenecks of the Global Environmental Fund and the World Bank.’ (Matthai, 2009, p. 4).
Demanding debt repayment by the North
Instead of requesting more CDM carbon trading funds, many more civil society groups instead insisted on raising climate debt as the optimal financing route. In August 2008, African chapters of Jubilee South converged in Nairobi to debunk limited ‘debt relief’ by Northern powers and to plan the next stage of financial campaigning. Nairobi-based Africa Jubilee South co-coordinator Njoki Njehu concluded, ‘Africa and the rest of the Global South are owed a huge historical and ecological debt for slavery, colonialism, and centuries of exploitation’ (cited in Bond and Brutus, 2008, p. 1).
Behind African elite considerations is the threat to repeat their performance in Seattle in 1999 and Cancun in 2003, when denial of consent in World Trade Organisation negotiations was the proximate cause of the summits’ collapse on both occasions. On 3 September 2009, Meles Zenawi issued a strong threat from Addis Ababa about the upcoming Copenhagen conference: ‘If need be we are prepared to walk out of any negotiations that threatens to be another rape of our continent’ (cited in Ashine 2009). To gather that power, Zenawi established the Conference of African Heads of State and Government on Climate Change: chairpersons of the AU and the AU Commission, representatives of Ethiopia, Algeria, the Democratic Republic of Congo, Kenya, Mauritius, Mozambique, Nigeria, Uganda, Chairpersons of the African Ministerial Conference on Environment and Technical Negotiators on climate change from all member states. They met at the AU Summit in Sirte, Libya in July 2009, agreeing that Africa would have a sole delegation to Copenhagen with a united front and demands for compensation.
The most important African negotiator – and largest CO2 emitter (responsible for more than 40 per cent of the continent’s CO2) – is South Africa (Bond, Dada and Erion, 2009). Long seen as a vehicle for Western interests in Africa, Pretoria’s negotiators have two conflicting agendas: Increasing Northern payments to Africa (a longstanding objective of the New Partnership for Africa’s Development, which requested US$64 billion per annum in aid and investment concessions during the early 2000s); and increasing CO2 outputs through around 2050, when the Long-Term Mitigation Scenario – South Africa’s official climate cap – would come into effect and emissions declines are offered as a scenario. In the meantime, Pretoria has earmarked more than US$100 billion for emissions-intensive coal and nuclear fired electricity generation plants due to be constructed during 2010-15, which would amplify Africa’s climate crisis, requiring more resources from the North for adaptation.
But the current South African environment minister, Buyelwa Sonjica, made a demand in September 2009: ‘We expect money. We need money to be made available... we need money as of yesterday for adaptation and mitigation’ (Engineering News 2009). What Sonjica didn’t comprehend is that any just calculation of financing responsibilities for climate debt would identify South Africa as a debtor not creditor country.
Copenhagen showdown
The effect of the Africans’ rhetoric appeared to entail some immediate concessions. In September 2009, the European Union announced it would begin paying its climate debt, but only up to US$22 billion annually to fund adaptation, roughly one seventh of what EU environment commissioner Stavros Dimas observed would be required by 2020 (US$145b). Some of that would be subtracted from existing aid. The EU damage estimates were considered far too conservative, as China’s mitigation and adaptation costs alone would be US$438 billion annually by 2030, according to Beijing. According to one report, the EU view is thatemissions trading should be the basis of ‘much of the shortfall’: ‘The international carbon market, if designed properly, will create an increasing financial flow to developing countries and could potentially deliver as much as €38bn per year in 2020’ (Chaffin and Crooks 2009: 24).
Because this offer was widely judged as inadequate, Zenawi carried out a trial run of his walk-out threat just prior to Copenhagen, in November 2009 at a Barcelona UNFCCC (United Nations Framework Convention on Climate Change) meeting. Sufficient concessions were not on the table, so his technical negotiators registered a protest. But at the crucial moment in Copenhagen, during the final week when heads of state would arrive to negotiate a new protocol, Zenawi diverted his own flight from Addis Ababa via Paris, where he met French premier Nicolas Sarkozy. Shortly thereafter, he announced the halving of Africa’s climate debt demands (Vidal in Guardian 4 Nov 2009).
According to Mithika Mwenda of the Pan African Climate Justice Alliance (PACJA), this act had the effect of ‘undermining the bold positions of our negotiators and ministers represented here, and threatening the very future of Africa… Meles wants to sell out the lives and hopes of Africans for a pittance. Every other African country has committed to policy based on the science’ (cited in Reddy, Climate Chronicle 18 Dec 2009, p. 2).
Then on 17 December, US secretary of state Hillary Rodham Clinton offered what appeared to be a major concession (US State Dept. 2009):
‘… in the context of a strong accord in which all major economies stand behind meaningful mitigation actions and provide full transparency as to their implementation, the United States is prepared to work with other countries toward a goal of jointly mobilizing $100 billion a year by 2020 to address the climate change needs of developing countries. We expect this funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance.’
Yet there was no firm line-item in the US budget to this end, just a promise (the US had regularly broken similar aid promises in the past, and at the same time the US President Barack Obama was cutting back AIDS medicines funding to Africa). The private sources of finances alone could easily exceed US$100 billion, with CDMs at the time in excess of 6 per cent of the US$125 billion emissions markets. If, as predicted, the size of the 2020 carbon market reached US$3 trillion, it would take just 3.3 per cent dedicated to CDMs to reach the US$100 billion target. So given the private sourcing and likelihood of loans not grants, Clinton’s offer could readily be rejected as meaningless.
However, several countries had insisted on climate debt as a negotiating framework even before Copenhagen, including Venezuela, Paraguay, Malaysia and Sri Lanka. But in Copenhagen, only Sudan stood out, partly because its UN Ambassador, Lumumba di-Aping, had such a visible role as G77 chief negotiator. At one point, when briefing civil society a week before the fatal Copenhagen Accord deal, he ‘sat silently, tears rolling down his face,’ according to a report, and then said, simply, ‘We have been asked to sign a suicide pact.’ For much of the continent, said Di-Aping, 2 degrees C globally meant 3.5 degrees C: ‘certain death for Africa’, a type of ‘climate fascism’ imposed on Africa by polluters, in exchange for which the Third World would get a measly US$10 billion per year in ‘fast track’ funding, although ‘US$10 billion is not enough to buy us coffins’. Agreeing with leading US climate scientist James Hansen, the Copenhagen deal on offer was ‘worse than no deal’, said Di-Aping, concluding, ‘I would rather die with my dignity than sign a deal that will channel my people into a furnace.’ As for the main negotiator, he had this prophesy: ‘What is Obama going to tell his daughters? That their [Kenyan] relatives’ lives are not worth anything? It is unfortunate that after 500 years-plus of interaction with the West we [Africans] are still considered “disposables”’ (cited in Welz 2009).
Continuing climate justice advocacy
After this debacle, it was up to the Bolivian government to pick up the baton. In Cochabamba April 2010, the World Conference of Peoples on Climate Change and the Rights of Mother Earth (PWCCC) issued demands for a formal compensation mechanism for climate debt. The conference’s Working Group on Climate Debt (2010, p. 1) argued as follows:
‘Climate debt is an obligation of compensation that is generated because of the damage done to Mother Earth by the irrational emissions of greenhouse gases. The primary responsible for these irrational emissions are the so-called ‘developed countries ‘, inhabited by only 20% of the world population, and which emitted 75% of historical emissions of greenhouse gases.
‘These states, which stimulated the capitalist development model, are responsible for climate debt, but we shouldn’t forget that within these states, there live poor and indigenous peoples which are also affected by this debt…‘The responsibility for the climate debt of each developed country is established in relation to the level of emissions, taking into account the historically emitted amount of tons of carbon per capita.’
The Working Group (2010, p. 2) made suggestions for payment as follows:
The re-absorption [of emissions] and cleaning the atmosphere by developed countries
Payment in technology (eliminating patents) and in knowledge according to our worldview for both clean development and for adaptation to developing countries
Financing
Changes in immigration laws that allow us to offer a new home for all climate migrants
The adoption of the Declaration on the Mother Earth’s Rights.
The Working Group also called for funding to be routed through the UNFCCC, ‘replacing the Global Environment Facility and its intermediaries such as the World Bank and the Regional Development Banks.’ A further suggestion was that ‘The financial mechanism must respect the sovereign control of each country to determine the definition, design, implementation of policy and programmatic approaches to climate change.’ As for timing, ‘The financial mechanism shall be defined and approved at COP16, and be made operational at COP17.’ These documents were based upon visionary civil society demands that had emerged over the prior months and years. Some earlier, very ambitious demands – such as the end of apartheid or access to AIDS medicines – were only won after years of struggle, after initially appearing equally audacious and unrealistic.
From the standpoint of civil society forces that have lost confidence in states, multilateral agencies, donors, corporations and ENGOs, how might debt repayments in the form of financing be best distributed? It became clear to many civil society groups in recent decades that postcolonial African governments were too easily corrupted, just as were United Nations and aid (and even international NGO) bureaucracies. One solution to the payment distribution problem appeared in 2009: The idea of simply passing along a monthly grant – universal in amount and access, with no means-testing or other qualifications – to each African citizen via an individual ‘Basic Income Program’ payment. According to Der Spiegel, the village of Otjivero, Namibia is an exceptionally successful pilot for this form of income redistribution (Krahe 2009). First priority would be to supply a Basic Income Program to Africans who live in areas most adversely affected by droughts, floods or other extreme weather events. Logistically, the use of Post Office Savings Banks or rapidly-introduced Automated Teller Machines would be sensible, although currency distortions, security and other such challenges would differ from place to place. The Namibian case has much to recommend it, in part because it amongst the driest sites in Africa.
Such a strategy would be just an emergency salve on a burning problem:
How to ensure that the greenhouse gas ‘polluters pay’ in a manner that first, compensates their climate change victims;
that permits transformation of African energy, transport, extraction, production, distribution, consumption and disposal systems;
and that in the process assures the ‘right to development’ for Africa in a future world economy constrained by emissions caps.
Extremely radical changes will be required in all these activities in order not only to ensure the safety of the species and planet, but also that Africans are at the front of the queue for long-overdue ecological and economic compensation, given the North’s direct role in Africa’s environmental damage. The contemporary argument for climate debt to be paid is simply the first step in a long process, akin to decolonisation, in which the master – the polluting Global North – must know that not only is it time to halt the reliance on fossil fuels, but having ‘broken’ the climate, it is his responsibility to foot the clean-up bill.
Conclusion: changing the financing power balance
In contrast to financing for techie fixes via carbon trading – and similar strategies associated with other fields of bio-engineering – there is an alternative approach to financing based upon climate justice and an awareness of historic responsibility.
To get climate justice higher on the agenda will require higher levels of eco-social protest. So far the grassroots, NGO and labour components of various climate justice movements have developed extremely unevenly across space, with mainly Northern radical environmentalists only fusing with Southern economic justice advocates outside the 2007 Bali Conference of the Parties. The fusion of red and green influences was called the Climate Justice Now! network, and after the elites’ Copenhagen summit fiasco in December 2009, gained momentum in an April 2010 ‘World Peoples Conference on Climate Change and the Rights of Mother Earth’ in Cochabamba, Bolivia.
As for intergovernmental cooperation, it appears hopeless going into the Cancun Conference of the Parties 16. The Latin American left leadership will be squashed by the US and most of the United Nations, and although before Copenhagen the African elites engaged in rhetorical challenges to climate apartheid, their role was ultimately to polish the chains, not break them. Most African elites will follow the path of Moosa, van Schalkwyk and Maathai, and will have similar levels of success: Negligible or even negative.
Mooney’s theses about the false technological solutions rely upon flows of money to support the flows of bad ideas. But like many dysfunctional, malevolent or incompetent development projects over the ages, these flows can be halted if the balance of forces improves. Fortunately, when dealing with environmental financing, elites – especially in the World Bank, the United Nations and donor agencies – invariably choose unsustainable schemes, though unfortunately they never pay the price, leaving the damage to be carried by social and environmental victims.
Still, the elites’ record of financing climate change strategies does suggest a growing awareness of how impossible it is to commodify nature, turn environmental credits into derivatives, sell these in the global financial markets, dress them up with multilateral pseudo-credibility, and expect the inverted pyramid to stay aloft. The record of the carbon market’s demise in 2009-10 (below)
should encourage critics to include financing handles in their campaigning against technological eco-fixes. To move from demands for climate debt payment – now explicitly on the world agenda – to a broader agenda of ecological debt advocacy, is just the next step in connecting the dots between these related issues, and building African-led alliances that can ultimately prevail.
1. Monopoly rights on seeds
BASF, Monsanto, Bayer, Syngenta, Dupont and biotech partners have filed 532 patent documents (a total of 55 patent families) on so-called “climate ready” genes. Farming communities in the global South – those who have contributed least to global greenhouse emissions – are among the most threatened. The top 10 multinationals have cornered the seed market, use climate change to argue that any other choice will "starve" millions, lobby governments and WTO to make their monopoly legal, and enforce it over farmers' rights. See the ETC study Patenting the Climate Genes, Quaker International Affairs Programme (QIAP) book The Future Control of Food, the Schmeiser lawsuit, and the Doomsday Vault.
2. Land grabs for agrofuels
Joan Baxter's book Dust from Our Eyes gives examples from Mali. She worked for two decades in Africa. See our previous post about land grabs in the Third World, the secret World Bank report on how financial speculation drove up food prices, UN and Jubilee analysis of the food crisis and its threat to MDGs.
3. Rogue fleets fishing to extinction, to benefit banks
See Boris Worm's warning in a previous post, and Callum Roberts book Unnatural History of the Sea.
4. Slice-and-dice derivatives trading in pollution permits Derivatives caused the 2008 financial meltdown that was bailed out with our grandchildren's earnings; now OTC speculators want to repeat the bubble. In 2008 the Financial Times reported carbon trading doubling, but warned that 140 of 170 carbon offsets were "poor quality". Recently traders have sliced-and-diced these. See our previous post: climate justice vs the carbon casino, updated in the recent FOE study Dangerous Obsession, and Mark Schapiro, "Conning the Climate", Harpers Feb 2010. In 2009 China threw the risk back on derivatives traders, but in 2010 in the US, they are still refusing Federal Reserve regulation.
5. Industrial agriculture, feedlots and fish farms (breeding grounds for superbugs)
See this 2010 scientist's blog on superbugs updating the New Yorker 2008 investigative report. Feedlots have been accused of fostering flu viruses. Fish farms have spread viruses worldwide, despite years of warning, which -- typically -- BC lobbyists and governments have denied.
6. Tarsands and the "security" of the US empire: blood for oil
Canadian ecojustice groups raised questions of the tarsands' true cost years ago, to denials from Alberta and federal governments. Pipelines and projects are now being quadrupled despite warnings by ethical analysts that environmental damage is being hidden from investors. Federal studies long kept secret show woodland caribou being driven to extinction. Alberta's Parkland Institute shows US strategy calls for further involvement in wars to protect oil supply. Examples are the Afghanistan war, its connection with US pipelines, and Pentagon geopolitical studies (2006, 2007, 2008). Already the world's biggest oil consumer, in 2007 the US military reported that its new tactics (supposed to protect "security of supply") require four times as much oil per soldier as in the Gulf War of 1991.
Excerpts from Nadene Ghouri's investigation for UK Daily Mail Live Magazine1 Jun 09. Photos: Ash Sweeting. Gujarat Fluorochemicals (GFL) website boasts that it exports to 75 countries, and has a branch plant in China. With World Bank approval, foreign investors have poured $12 billion into Gujarat's 175-mile chemical corridor between Mehsana and Vapi, one of the world's 10 worst-polluted places. Political pull has spared prosecution of polluters. Gujarat's chief minister says carbon credits are "a good business opportunity".
*****
In the fields around this giant chemicals factory in Gujarat, the barren soil smells of paint stripper and the water from the well makes you gag. Radha, a tough, sinewy widow and the only female farmer here, says that the well, which draws from deep groundwater, used to adequately supply the village and surrounding farms. ‘We have plenty of water – but water is the problem,’ she says. As the bucket returns to the top, we can make out a white, almost oily-looking film on the surface of the liquid, which has formed little snowflake shapes.
She scoops up some water and asks us to smell it. It has an odour so acrid it catches in the back of our throats, making us cough. ‘We can’t irrigate our crops with it,’ she says. ‘It’s the water of death. It kills most crops we put it on. A few years ago, I grew spinach, potatoes, lots of different crops. Now… look at my plants. Weak, useless.’
We’re in a field of cotton that should be ready to harvest. But there’s nothing to reap – just a few little tufts that blow mockingly in the breeze. Radha picks up a handful of soil. The surface has a faintly visible white crust, as if talcum powder has been sprinkled over it. Hold it close and it has the same caustic smell as the water, a bit like paint stripper.
Overlooking the fields like a hulking metal skeleton is the factory the villagers claim has polluted their water and land. The plant, owned by Gujarat Fluorochemicals (GFL), produces refrigerant gases for air-conditioning units and fridges. A by-product is a greenhouse gas [one of the worst] called HFC23.... one ton of it is equivalent to 11,700 tons of carbon. Under the UN Clean Development Mechanism (CDM), GFL installed new technology to capture and recycle HFC23.
The technology was provided in 2005 by the UK’s largest chemical and oil corporation, Ineos, formerly part of ICI [Imperial Chemical Industries]. Both GFL and Ineos benefited handsomely. By installing the technology, GFL made €27 million in the last quarter of 2006 – triple its total earnings for the same period the year before due to carbon credits. Ineos was also given a substantial number of credits for helping a company in the developing world cut its emissions, [to "offset" Ineos emissions exceeding] UK government limits....
polluted well in Ranjitnagar
GFL is part of a worldwide carbon-trading scheme, centred in London, which is supposed to be helping to save the planet from global warming. On paper the scheme, which was ratified under the Kyoto agreement and supervised by the UN, looks like an efficient way to cut global carbon emissions. However, a Live investigation has exposed a series of major failings and loopholes in the scheme.
The great carbon credits merry-go-round -- Daily Mail (click on image to see details)
As you dig below the surface it would appear that the UN programme – with backing and finance from Britain – is as polluted as the questionable companies it chooses so generously to reward. In the middle of the City of London is a large anonymous-looking building, home to the European Climate Exchange (ECX). About 98 per cent of the carbon-emissions trading in Europe is done in this office, with more than 25 million tons of carbon traded daily. Last year this market was worth £80 billion worldwide, and it’s set to grow to £97 billion this year, despite the recession. Here traders sell our planet’s future in the form of carbon credits... each credit represents a ton of CO2. Chief executive Patrick Birley meets us in the glass-panelled reception. He points out where climate protestors camped on the doorstep during the G20 protests in March. ‘I care just as passionately about saving the planet as they do,’ he says. ‘But the difference is that I believe environmentalism and capitalism can converge.’
Companies that cut their emissions gain credits. If, on the other hand, they exceed their [pollution cap] quotas, they have to acquire credits... trading involves Europe’s biggest banks, including RBS and Barclays. Until the global slowdown, carbon was one of the most profitable ‘commodities’, nearly doubling in value between 2007 and 2008.
But concerns are now being raised about this market approach to controlling emissions, with heavily polluting companies seemingly being financially rewarded. The hulk looming above Radha’s fields was the first factory in the world to profit from the UN scheme, and is something of a flagship project. Yet for the villagers, the scheme is rewarding the very factory that’s brought them misery.
Narendra Modi
We arrive in Gandhinagar, the state capital, to meet Gujarat’s controversial right-wing chief minister, Narendra Modi. ‘You can have big industry and be green' ... but he admits carbon credits can be a ‘good business opportunity’. ‘It’s a typical Western capitalist system, cash- and profit-based. In the East we think differently; caring for nature and the environment is something that comes naturally to us. But of course we’ll take the carbon-credits money if it is offered to us. Why wouldn’t we?’
8 year old Nita, born without an elbow joint
In a village near GFL, scores are sick with joint aches, bone pains, unexplained swellings, throat and nerve problems and temporary paralysis. The farmers can’t put any names to their illnesses and, as low-caste dalits (or untouchables), most of them are too poor to access proper medical services.
Dr Alison Doig, senior climate-change advisor at Christian Aid, says, ‘Live’s investigation highlights exactly what’s wrong with this flawed system, which is focused only on exchanging carbon credits globally, with no accounting for other environmental or social damage. All carbon credits are doing is making some companies rich, while doing nothing to prevent global pollution. It needs either abolition or total reform.’
‘The carbon-credits business operates rather like the financial-services industry did,’ says Kevin Smith of campaigning watchdog Carbon Trade Watch. ‘Insufficient scrutiny and transparency, dodgy projects getting money when they shouldn’t be. And we all know the consequences of what happened in financial services. But this is potentially much more serious, because unlike the Government, nature doesn’t do bailouts.’
