Carbon Trading Scams Make Mockery of Climate Change

by Oct 1, 2010All Articles

By Patrick Bond, Rehana Dada and Graham Erion

With climate change posing one of the gravest threats to capital accumulation – not to mention humankind and our environment – it is little wonder that economists such as Sir Nicholas Stern, establishment politicians like Gordon Brown and Al Gore, and financiers at the World Bank and the City of London have begun warning the public. They are all pushing for more market solutions as the way to reduce carbon dioxide emissions.

This was the key theory motivating capitalist states’ support for the Kyoto Protocol. Rather than forcing countries or firms to reduce their own greenhouse gas emissions, Kyoto Protocol designers gave countries a minimal reduction target -five percent from 1990 emissions levels, to be achieved by 2012- and created a carbon market: They can either meet that target through their own reductions, or by purchasing emissions credits from countries or firms that reduce their greenhouse gases beyond their target level.

Since February 2005, when the protocol was ratified by Russia and formally came into effect, a great deal of money and propaganda has been invested in the carbon market, including at a major Nairobi climate conference last month. One of the key carbon trading mechanisms instituted by Kyoto is the Clean Development Mechanism. This is an arrangement which enables countries to offset their carbon targets by investing in emissions reduction projects in other countries – such as tree planting or wind power projects in the third world.

But as Larry Lohmann from the British NGO Cornerhouse and the Durban Group for Climate Justice remarks, “The distribution of carbon allowances [the prerequisite for trading] constitutes one of the largest, if not the largest, projects for creation and regressive distribution of property rights in human history.”

Big oil companies, in particular, can win property rights to pollute at the level they always have, instead of facing up to their historic use of the third world as a dumping ground.

In mid-2005, Sasol, one of South Africa’s largest companies, admitted that its gas pipeline project proposal to the Clean Development Mechanism bureaucracy lacked the key requirement of ‘additionality’ – the firm doing something that it would not have done anyway – thus unveiling the Clean Development Mechanism as vulnerable to blatant scamming.

At Durban’s vast Bisasar Road rubbish dump – Africa’s largest landfill – community protests continue against ongoing carcinogenic emissions linked with the World Bank and municipal state’s plans to market a methane-capture project at the site as a Clean Development Mechanism project.

According to Sajida Khan, a cancer victim leading the fight, “The poor countries are so poor they will accept crumbs. The World Bank knows this and they are taking advantage of it.”

Similar protests across the third world have targeted destructive Clean Development Mechanism schemes and are raising the profile of the dangerous market.

Carbon trading may also suffer classic contradictions of capitalist markets, such as volatility, overproduction and manipulation. Last April, Gordon Brown made a strong pitch to the United Nations for a “global carbon trading market as the best way to protect the endangered environment while spurring economic growth”.

But ten days later, the European Union’s Emissions Trading market crashed thanks to the over allocation of pollution rights, and the carbon market price lost over half its value in a single day, destroying many Clean Development Mechanism projects earlier considered viable investments.

Guardian columnist George Monbiot recently explained why Clean Development Mechanism schemes like tree planting are so dubious:

“While they have a pretty good idea of how much carbon our factories, planes and cars are releasing, scientists are much less certain about the amount of carbon tree planting will absorb. When you drain or clear the soil to plant trees, for example, you are likely to release some carbon, but it is hard to tell how much.

“Planting trees in one place might stunt trees elsewhere, as they could dry up a river which was feeding a forest downstream. Or by protecting your forest against loggers, you might be driving them into another forest. In other words, you cannot reasonably claim to have swapped the carbon stored in oil or coal for carbon absorbed by trees. Mineral carbon, while it remains in the ground, is stable and quantifiable. Biological carbon is labile and uncertain.”

The main force for a genuine alternative to capitalism’s fake market mitigation strategy will be public pressure.

With third world communities and progressive environmentalists – especially the Durban Group for Climate Justice – seeking and finding allies serious about the climate crisis, there will be fewer opportunities for Nicholas Stern and Gordon Brown – and in South Africa Valli Moosa and Marthinus van Schalkwyk – to sell bogus market solutions to capital’s pollution problems.

Read more articles from Amandla! Issue #1, July 2007

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