[DEBATE] : (Fwd) More carbon trade scamming

[Patrick Bond]

(Later today on Al Jazeera's People and Power show I'll be debating some 
of the damn London financiers about the merits of carbon trading. Here 
are three new articles of interest.)


http://www.newint.org/issues/current/

New Internationalist
Power politics
We have reached the first tipping point towards climate catastrophe – 
but are being offered a fistful of false solutions by the powers that 
be. Jess Worth looks to the growing climate justice movement for hope.

In the course of researching this magazine I’ve been charged at by riot 
police, had a meeting with a Minister and been interviewed on Newsnight, 
Britain’s most prestigious TV current affairs programme. Why? Because 
‘climate justice’ isn’t just another magazine topic to me. It’s the 
greatest and most urgent challenge of our time – so I’ve thrown myself 
into the thick of trying to make it happen.

But one thing I wasn’t expecting was to be lobbied by a banker.

It was the launch in Parliament of the ‘Yasuní Green Gold’ campaign, 
last October. The NI had just published a photo book about this 
incredibly biodiverse region of pristine Amazon rainforest, and its 
imminent destruction by oil companies.

The Ecuadorian Government had audaciously asked rich countries to pay 
them not to exploit the billion barrels of oil under the Yasuní national 
park. It was a novel suggestion for preventing climate change, and could 
set an inspiring precedent.

However, in Yasuní itself, the people are worried. By putting a price on 
the forest, will the deal further erode the land rights of the 
indigenous people who live there? The neighbouring community, currently 
dependent on the oil economy for jobs, have not been consulted – will 
they receive the support they need to develop the alternative, 
sustainable economic activities they crave? What guarantee is there that 
the oil will never be exploited by this or a future government? And what 
happens if industrial nations won’t cough up the cash?

So we brought Anita Rivas, the mayor of the Yasuní region, to Britain to 
persuade the Government to support an improved version of the proposal: 
with the rights and needs of local and indigenous people placed at its 
heart.

Governments are on a kamikaze mission and we’re all strapped into the 
passenger seats

A smattering of supportive politicians turned up at an ornate House of 
Commons committee room – and so did three slick lobbyists from carbon 
trading firms, keen for a slice of the Yasuní action. They came with a 
proposal of their own: apportion the rainforest up into ‘avoided 
deforestation credits’. These could then be sold on (at a tidy profit) 
by traders, brokers and speculators, to Northern polluters who want to 
offset their own emissions rather than actually having to reduce them. 
Bingo, problem solved!

During the meeting I was careful to dismiss this as an option. I knew 
that the experience of ‘carbon offsetting’ projects meant that 
grassroots organizations in Ecuador opposed this approach. Indigenous 
people across the world see it as a massive land-grab by foreign 
investors. They fear it would ‘cause forced evictions, prevent access 
and threaten indigenous agricultural practices, destroy biodiversity and 
cultural diversity and cause social conflicts.’1 Indigenous and local 
communities, not international financiers, are the best stewards of the 
world’s forests.

One of the lobbyists, from a major bank (though not one of the 
collapsing ones, he was quick to point out), cornered me afterwards. He 
insisted we were on the same side and ‘beseeched’ me to sit down with 
him and discuss how we could work together.

I declined. You see, we’re not all on the same side. Selling carbon 
credits may well raise some money for Yasuní – but at what cost? If a 
supposed solution to climate change results in a new set of injustices 
for the people affected, then we need to think again.

Depressingly, in December we discovered that the Ecuadorian Government 
had been seduced. Having had no luck asking rich countries for money, 
they have decided to go down the carbon trading route. The future for 
the people of Yasuní remains uncertain, though I’m sure the bankers are 
chuffed to bits.
Tipping into trouble

The time for words of warning is long gone. One need only tune in 
briefly to the panicked tones of the world’s leading climate scientists 
to grasp that we are already in a crisis. The Arctic ice-sheets are 
melting far faster than the UN’s Intergovernmental Panel on Climate 
Change projected only last year. Their conclusion that the world needs 
to reduce greenhouse gas emissions by 80 per cent by 2050 – no mean feat 
in itself – was based on the assumption that Arctic summer ice may be 
gone by the end of the century.

It is now predicted to be gone in the next five years.

Arctic sea-ice acts as a refrigerator for the globe. Without it, global 
warming will happen even faster. It also contributes to the ‘albedo 
effect’ whereby white surfaces reflect more solar radiation than dark 
ones. As ice and snow disappear, darker ocean and land absorb more heat 
from the sun and add to warming. This in turn affects the Arctic 
permafrost, which currently locks away twice as much carbon as is 
currently in the entire global atmosphere. That permafrost is starting 
to thaw, about 80 years ahead of schedule...

We have no choice but to try; and change, when it comes, can be sudden, 
dramatic and astonishing

We have reached the first climate ‘tipping point’. As temperatures rise, 
changes are triggered in the earth’s systems which create ‘positive 
feedbacks’, further contributing to global warming, and potentially 
unleashing rapid, uncontrollable and irreversible change.

It’s still not too late to prevent a catastrophe. But only just. Global 
warming has already resulted in a temperature increase of nearly 1°C, 
and we are committed to further warming caused by greenhouse gases 
already emitted – around 0.2°C per decade. But scientists say that if 
warming is kept below 2°C, we have a good chance of avoiding the worst 
effects of climate change. So the world needs to embark on a crash 
course of decarbonization now, reducing emissions in industrialized 
nations by around eight per cent per year whilst helping Majority World 
countries on to a zero-carbon development path. If we continue as we 
are, we are looking at a projected rise of up to 6°C by the end of the 
century, and the end of life on earth as we know it.
Triple injustice

The prospect of future generations inheriting a totally trashed planet 
is just one of the many layers of injustice wrapped tightly around the 
problem of climate change. Like an onion, the closer you get to its 
heart, the harder it is not to weep.

Injustice number one: climate change is hitting the poorest first and 
worst. Many hundreds of thousands have already died from the worsening 
floods, droughts, heat-waves, cyclones and disease that global warming 
is unleashing. The death-toll is predicted to rise to millions in just a 
few decades. Nearly all these climate change casualties – and those most 
at risk – are poor people living in the Majority World. (See ‘Climate 
Justice: the facts’, page 12).

Injustice number two: those most affected did not cause it and are 
powerless to stop it. Climate change has been largely created by the 
burning of fossil fuels by industrialized nations, with the richest 
being the most culpable planet-cookers. As Panapase Nelisoni, from the 
Government of Tuvalu – one of the Pacific island-nations currently 
disappearing beneath the waves due to rising sea-levels – quite rightly 
points out: ‘The industrialized countries caused the problem, but we are 
suffering the consequences... it is only fair that people in 
industrialized nations and industries take responsibility for the 
actions they are causing. It’s the polluter-pays principle: you pollute, 
you pay.’2

Injustice number three: the polluters aren’t paying. In fact, greenhouse 
gas emissions – of which carbon dioxide accounts for 80 per cent of 
warming, the others being methane, nitrous oxide and certain industrial 
gases – continue to rise in developed countries, despite their signing 
the Kyoto Protocol which was supposed to reduce them. Kyoto was also 
supposed to lead to financial support for poor countries like Tuvalu 
struggling at the sharp end of the climate crisis, but the international 
community has shown little interest. The G8 have so far pledged a 
shockingly inadequate $6 billion – to be disbursed through World Bank 
loans, forcing affected countries to pay twice for their own suffering, 
with the added slap in the face of stringent World Bank conditions. 
Compare this with the hundreds of billions chucked at bailing out the 
banks, with minimal conditions, and the injustice gets gut-wrenching.

Instead, the solutions proposed by the polluters look suspiciously like 
business-as-usual. The dogged pursuit of economic growth at all costs is 
still taken as a given, despite the fact that it was the reckless 
over-consumption of natural resources on a finite planet that got us 
into this mess in the first place.
Fossil foolery

To deliver big enough emissions reductions we need a carefully planned 
transition to a zero-carbon economy. Among other things, this will require:

* massive investment in renewables
* the systematic closing down of coal-fired power plants
* the revitalization of cheap public transport
* a rapid curbing of aviation
* a shift away from the pursuit of mass production and consumption

But instead of knuckling down, rich countries are putting their faith in 
‘the market’ to deliver emissions cuts and stimulate investment in green 
technology. They are largely doing this through carbon trading – the 
offsetting of continued pollution by making reductions elsewhere in the 
economy.

And guess what: it isn’t working – in fact, it’s making matters worse 
(see ‘A timely death?’, page 14).

Just as the market has proved incapable of controlling the dangerous 
excesses of international finance, it is failing to reduce greenhouse 
gas emissions, or to kick-start the dramatic shift towards zero-carbon 
economies we so desperately need. Instead, perversely, carbon trading 
has enriched the most polluting European energy companies to the tune of 
billions of dollars, and exported dirty development schemes to the 
global South. Yet that doesn’t seem to shake the G8 governments’ belief 
that market mechanisms will somehow magically solve this crisis. They’re 
on a climate kamikaze mission and we’re all strapped into the passenger 
seats.

The false ‘solutions’ we are being offered – carbon markets, green 
consumerism and techno-fixes such as the fantasy of ‘clean coal’ – 
continue to reinforce the inequalities of wealth and power that underpin 
the climate crisis. And – just to add one more injustice to the mix – 
this failure to deliver the emissions cuts we need, while encouraging 
further fossil foolery, is cancelling out all the good that individuals 
and communities are doing to reduce their own eco-footprints.
Last shot

This year will be a defining one for the climate. In December, 
governments meet in Copenhagen to agree a new treaty to replace the 
Kyoto Protocol. It’s being billed by commentators and NGOs as the most 
important meeting ever – our last shot to save the planet. If that’s 
true then we should be seriously worried, because in the aftermath of 
last December’s climate talks in Poznan, it’s clear that what’s 
currently on the table is more of the same: more inadequate targets for 
industrialized countries to fail to meet, more sidelining of the 
Majority World’s interests, and a LOT more get-out-of-jail-free carbon 
trading (see ‘Just or bust’, page 19). A deal that delivered climate 
justice would look very different indeed.

Climate justice matters. Quite beyond the obvious moral imperative – 
millions of deaths could be prevented if we act now – the political 
reality is that we can’t solve a crisis that will ultimately affect us 
all without reversing these existing injustices.

First, ‘developing’ countries are now responsible for 60 per cent of 
annual global greenhouse gas emissions. Whilst their historical 
contribution is tiny, rapidly growing economies like China, India and 
Brazil are shaping up to be the big polluters of the future. If we’re to 
decarbonize the global economy, we’re going to need them on board. Why 
should they commit to an alternative development pathway when the 
countries that grew rich riding the fossil fuel beast refuse to 
dismount? The answer is, they won’t.

According to one British Government insider, Chinese officials engaged 
in the UN climate talks don’t speak English, but they do know the word 
‘Kingsnorth’ – the new coal-fired power station Britain is threatening 
to build.

The majority of the world’s people still live in grinding poverty, from 
which they have a right to be released. The burden of change, financial 
assistance and leadership by example falls squarely on the shirking 
shoulders of industrialized countries.

Second, the real solutions that will bring about the 6-8 per cent annual 
cuts in emissions we now need cannot flourish whilst the vested 
interests of dirty capitalism are getting in the way. Powerful corporate 
lobbies ensure that it is their counter-productive yet lucrative 
solutions that dominate the official agenda, rather than the 
re-engineering of economies and societies along sustainable lines.

Climate justice is no luxury, to be toyed with when things are going 
well but junked in a crisis. It will be our ability to reconfigure the 
global power relations currently frog-marching us over the edge that 
will determine whether or not this planet is toast.
The mother of all movements

So now the difficult part: how on earth do we make this happen? Action 
must take place in many ways and at many levels, from the grassroots to 
the broadest international arenas. That’s what the articles that follow 
in this magazine are all about.

But, fundamentally, we need to recognize that climate change is a 
political problem. We know exactly what’s going wrong and why, and we 
have the knowledge, strategies and technology to solve it. Yet we’re 
being paralysed by politics.

So we need the mother of all global movements: to force action from 
governments; to counteract the influence of corporations touting false 
solutions and blocking radical change; to advocate and create the 
alternatives. To have the necessary impact in the time we have left we 
are going to need massive popular civil disobedience on a scale unseen 
since the suffragettes and the civil rights movement.

The seeds are there. All over the world people have been mobilizing to 
demand genuine action, and different struggles are beginning to unite 
globally around the cause of climate justice. At the Bali climate talks, 
in December 2007, a group of organizations and networks came together in 
shared exasperation at the way politicians (aided and abetted by many 
mainstream environmental NGOs) were sending us all to hell in a 
handcart, and formed the ‘Climate Justice Now!’ network. It includes 
peasants’ groups demanding food sovereignty in Asia, communities 
fighting resource extraction in Africa, indigenous people determined to 
protect their forests in Latin America, the Durban group of 
organizations resisting carbon trading projects across the world, 
anti-biofuel activists, debt campaigners, the Arab Climate Alliance and 
a few of the more progressive big NGOs.

In Northern countries there has been an explosion of direct action 
against fossil fuels and false solutions, putting the need for much more 
radical changes firmly on the agenda: mass blockades at the world’s 
biggest coal port in Newcastle, Australia; invasions of power stations 
across Europe; the disruption of coal construction sites in the US; 
occupations of the offices of companies promoting greenwash; and, most 
recently in Britain, the dramatic shut-down of Stansted Airport runway.

My own run-in with the riot cops (and primetime TV) this summer took 
place at the Camp for Climate Action, which pitched up next to 
Kingsnorth power station and became the destination for thousands of 
people who felt the need to do more about climate change than write 
angry letters and vote once every four years. But the camp itself wasn’t 
just about encouraging people to take direct action. It was an 
extraordinary demonstration of sustainable, co-operative living in 
action, complete with renewable power generation, compost toilets, vegan 
food, communal decision-making, a pirate ship to play in and a programme 
of workshops and seminars all about climate change and how to stop it.

The police came down on our peaceful, legal, inspirational slice of 
eco-topia like a ton of bricks, unleashing shocking levels of violence 
and intimidation on those who attended. I can only conclude that the 
authorities are feeling threatened. Our campaign in Britain has 
substantial public support and might actually force them not to build a 
new generation of coal-fired power stations: in the US, tens of new 
power plants have been prevented in the last two years by organized 
resistance.

What’s more, the attempt by the state to suppress climate protest isn’t 
working. In September 2008 a jury acquitted six Greenpeace activists who 
had invaded Kingsnorth power station, climbed its smokestack and caused 
$50,000 worth of damage by painting a slogan down the chimney. After 
hearing evidence from a range of climate change experts, the jury 
concluded that this action was justified to prevent the much greater 
damage global warming will cause – a stunning act of sanity that sent 
shock-waves through the Government.
History is like weather

Can a global movement for climate justice succeed? It’s the tallest of 
orders, of course. Humanity has never faced such an all-encompassing 
crisis, so we have no frame of reference from which to draw for ideas, 
strategies and just plain hope. And time is not on our side.

But, whilst daunting, this is also an enormous opportunity. The fact 
that the ‘buy now, pay later’ system is so evidently broken, with the 
triple crunches of financial meltdown, peak oil and climate change all 
biting simultaneously, provides a genuine opening for building the 
fairer, saner, greener world that the NI and many others have been 
advocating for so long. (See ‘A new, green democratic deal’ page 27.)

We have no choice but to try. And we mustn’t forget that change, when it 
comes, can be sudden, dramatic and astonishing. In the words of US 
activist Rebecca Solnit: ‘A lot of activists expect that for every 
action there is an equal and opposite and punctual reaction, and regard 
the lack of one as failure... But history is shaped by the groundswells 
and common dreams that single acts and moments only represent… And 
though huge causes sometimes have little effect, tiny ones occasionally 
have huge consequences… History is like weather, not like checkers. A 
game of checkers ends. The weather never does.’3

It’s up to people-power now to change the weather – and history.

1. Statement by International Forum of Indigenous Peoples on Climate 
Change to Bali climate talks, December 2007, http://tinyurl.com/5wnnkg
2. Mark Lynas, High Tide: news from a warming world, Flamingo, 2004, p97
3. Rebecca Solnit, Hope in the dark, Nation Books, 2004.

***

http://www.guardian.co.uk/business/2009/jan/27/industry-abusing-ets-carbon-trading

Britain's big polluters accused of abusing EU's carbon trading scheme

Terry Macalister
guardian.co.uk, Tuesday 27 January 2009 18.34 GMT
Article history

Smoke from a factory chimney. Carbon trading is leading to the use of more
polluting fossil fuels. Photograph: Joel W. Rogers/Corbis

Britain's biggest polluting companies are abusing a European emissions
trading scheme (ETS) designed to tackle global warming by cashing in their
carbon credits in order to bolster ailing balance sheets .

The sell-off has helped trigger a collapse in the price of carbon, making
it cheaper to burn high-carbon fossil fuels and leading to a fall in the
number of clean energy projects. The moves were seized on by
environmentalists and other critics who have previously criticised the
European Union's ETS for delivering more windfall profits for business
than climate change.

"This [ETS] was not designed as a scheme to give corporates cheap
short-term funding options in the face of a credit crunch meltdown where
banks are not lending, but that appears to be what's happening," said Mark
Lewis, a carbon analyst at Deutsche Bank.

Steel, concrete and glassmakers are believed to be the main sellers along
with financial speculators such as hedge funds. The sell-off of the
pollution permits has led to carbon prices plunging 60% – from over €30 to
around €12 per tonne.

The EU's emissions trading scheme was set up as a market solution to cut
greenhouse gas pollution from industry. Polluters were issued with permits
that can be traded between companies and countries as a way of encouraging
an overall reduction in carbon output. However, companies are now cashing
them in for their own financial benefit.

Up to €1bn-worth of carbon emissions permits are said to have been sold
off in recent months as industrial companies see an opportunity to bring
in funds at a time when their carbon output is expected to fall due to
lower production.

Environmentalists expressed anger last night about the way the ETS was
being used. "The ETS has bowed to corporate self-interest at every stage
of its design and implementation, so there is no surprise that it is now
being used as a cash cow to see firms through a difficult financial
phase," said Oscar Reyes, a researcher with Carbon Trade Watch.

Point Carbon, an information provider and consultancy, claims the
sell-offs are only one of a number of factors that are influencing prices
and argues it is "rational" for companies to be selling off credits at
this time. The falling price of oil – from $147 per barrel last summer to
less than $40 now – has dragged down the cost of gas, making it relatively
cheap to burn in power stations, it argues.

"Recession in Europe is bringing a slowdown in manufacturing meaning less
production and less emissions. Companies are doing exactly what is the
rational thing to do in these circumstances which is to sell if they are
long on credits. It is right that if they are emitting less then they do
not need the credits so much and the price of carbon will fall," said
Henrik Hasselknippe, global head of carbon at Point Carbon.

But the price collapse brings echoes of 2006 when it emerged that EU
states had given industry too many carbon credits, creating a glut that
made them almost worthless. Since then the European commission has amended
the scheme and some of the credits have been auctioned rather than given
away.

A study commissioned by the WWF environmental organisation from Point
Carbon, published in March last year, estimated that "windfall profits" of
between €23bn (£21.4bn) and €71bn would be made under the ETS between 2008
and 2012 on the basis that the price of carbon would be between €21 and
€32. Up to €15bn could be made by British companies that were given
credits they did not need.

Analysts said it was very hard to identify on an individual basis which
companies were selling their credits but easier to say which sectors they
came from such as cement, whose production is expected to drop 20% this
year and steel where volumes could fall by 15%.

Lafarge, the world's biggest cement maker and owner of Blue Circle Cement
in Britain, said last night that it had only sold a small number of
credits on the open market. "We mainly sell our credits from one country
to another, for example if we have too many in France then we might sell
them to Romania if we don't have enough there. Very few credits are being
sold on the [open] market," said a spokeswoman at its Paris headquarters,
while steelmaker Corus was unavailable for comment.

The collapse in the price of carbon has also caused a slowdown in clean
energy projects in developing countries against which western firms can
gain credits. The price of Clean Development Mechanism (CDMs) offsets has
slumped by nearly 30% over the last couple of weeks.

CantorC02e, a broker in the field, says it is scaling back its operations.
The emissions trading firm has no immediate plans to cut its 40 staff, but
says this cannot be ruled out while EcoSecurities, a stock-listed carbon
offsetting company, has seen its share price collapse from £1.50 to less
than 30p.

The low price of UN-approved offsets, known as Certified Emissions
Reductions, is slowing the number of clean energy projects being developed
in China. "I'd say there is half the number of players now than there was
a year ago. Banks have cut back considerably," said a small Chinese
project developer.

James Thompson, finance director of EcoSecurities, says he is confident
that the price of carbon will rebound along with a wider economic recovery
in 12 or 18 months' time. "The short-term price will also recover when the
flow of credits stop coming on to the market and long-term pressure will
come from governments realising they need a strong carbon price for
environmental reasons."

***

Larry Lohmann
East African Weekly, Sunday 25 January 2008





Please Mr. Obama: No More CO_2 lonialism in Africa



In his inauguration speech, Mr. Obama highlighted climate change as a
global crisis, challenging American citizens the take on the problem:
“…and each day brings further evidence that the ways we use energy
strengthen our adversaries and threaten our planet.” Now, as he enters
his office and gets to work, we wait with bated breath to see how the
new administration addresses the issue that Dubya steadfastly ignored.



Indeed, Africa has a special interest in any Obama “Change” approach to
climate change --- and the worldwide development of clean energy
sources. Of all of the promises on the table for developing countries in
Kyoto ten years ago --- massive new streams of finance for investment in
renewable energy, energy for sustainable development and poverty
alleviation in villages --- very few have come to fruition in Africa. In
today’s 60 billion dollar a year market for carbon off-sets, Africa is a
miniscule player, and the traders active here are mostly briefcase
consultants and multinational carpetbaggers. In Africa, for all the
noise made, climate change funding streams are merely making scratches
in the ground.



So why did Africa lose out? What happened? Where did the money go? The
answer is in the history of Kyoto and the resultant market mechanisms
that have much more to offer booming carbon-intensive economies like
China, India and Brazil than to the risky, comparatively sleepy and
carbon neutral economies in Africa.



* * *



Except for Iraq, Somalia, Zimbabwe, the USA and a handful of other rogue
states, all nations in the world have signed the 1997 UN Kyoto Protocol.
The agreement, which binds “industrialized” countries to reduce their
greenhouse gas (GHG) emissions by 5.2% below 1990 levels by 2012, came
into force in 2005 when Russia added its approval.



As expected in international negotiations, in the early days there was a
lot of blaming and foot-dragging by leaders presented with irrefutable
evidence that the earth is getting warmer because of human activities.
Developing countries maintained that their own economic growth --- read
fossil fuel use here --- should not be stunted because of a problem
largely caused by the North. Industrialized countries (called Annex 1
countries in the treaty) felt that penalizing them alone would provide
unfair economic advantages to the South. Given the cacophony of
tree-hugger activists, indigenous people NGOs and industry pressure
groups at the meetings, it is something of a miracle that so much of the
world did, eventually, sign up to the agreement.



The Kyoto Protocol forces countries to honour commitments to GHG
emission reductions, implement aggressive actions to reduce emissions,
“minimize impacts of climate change on developing countries”, monitor
national GHG emissions and to set up compliance committees.



For better or worse, we have America to blame for the “flexible
mechanisms” by which countries must endeavour to reduce their GHG
emissions. These include /emissions trading/, the /Clean Development
Mechanism/ and /Joint Implementation/ (More on these later). Under
Clinton, Americans actually /did /believe in the science of global
warming and Al Gore, who much later masterminded /An Inconvenient Truth,
/was one of those tasked to negotiate the USA’s platform in Kyoto.
Clinton’s Administration unilaterally favoured “market” approaches to
solving the climate crisis, rather than politically unpalatable “binding
targets” – and the US threatened to walk out of the talks if the world
didn’t play by Uncle Sam’s rules.



The US Environment Protection Agency developed the now-famous
“cap-and-trade” model. In short, a cap-and-trade approach set emission
limits in countries (i.e. “capping”), penalizing those that exceeded
their quota while --- at the same time ---- allowing offenders who
exceeded limits to “trade” with compliant entities who did meet their
targets. Active trading in carbon would create new opportunities based
on the fact that it is cheaper to reduce carbon emissions in the some
places (the South) than others. Computer models famously showed that
this model was much more “efficient” than any other approach to reducing
worldwide GHG emissions, and Kyoto reluctantly bought into it.



Unfortunately, shortly after Kyoto, the Bush regime --- fronting for
America’s vast coal and petroleum industry --- came into power and
declared climate change to be nonsense. Any American support for Kyoto
was abrogated --- even the flexible mechanisms it forced on the party
--- and, with a few loyal supporters (Australia, Russia) the US
unsuccessfully attempted to scuttle the entire protocol.



Kyoto’s execution fell to the Europeans, and they took the cap-and-trade
message to heart. They quickly developed the multi-billion dollar EU
Emissions Trading Scheme that is, to date, the largest carbon market in
the world. Millionaire trading companies, based on trading packets of
air, sprang up overnight, bringing new meaning to the term “bubble”.
London became the world’s carbon finance center, racheting up a market
valued at $60 billion by 2007. Europe’s voluntary offset market, worth
several billion dollars per year, also developed almost overnight. Due
to their clever lobbying throughout the process, more than a third of
the first few year’s cash bounty found its way back to carbon spewing
multinationals who were freely given massive allowances by governments
so that they would play along! Indeed, cap-and-trade and ETS was
relatively successful in reducing European emissions.



For Africa, the only way to play in the carbon trading market was
through the project-based /Clean Development Mechanism/ (CDM) or through
the unregulated /voluntary emissions market./



CDM is the UN-arranged marriage of the North, which wanted opportunity
to off-load surplus carbon emissions and the South, which desired
investment and sustainable development. Using the CDM, industrialized
country companies can invest in carbon-reduction projects in the South,
and claim the carbon reductions. Southern countries register and approve
the projects, and a wobbly UN administering system keeps track of the
carbon credits. So, for example, owners of a coal-fired power plant in
Germany can invest in a wind-farm scheme in China, claim those /bona
fide /reductions, and meet their reduction targets without having to do
a thing to their plant.



In 2007, the CDM pipeline had 3000 pipeline projects worth about €12
billion. But here’s the rub: In practice, /very little /has happened
with the CDM in Africa. In a recent census, China --- desperately
needing green power to supplement the dozens of coal-fired power plants
it builds each year --- had on the order of 860 CDM pipeline projects,
more than 60% of all projects registered. In the same census, Brazil had
240 pipeline projects. Mexico had 175.



As of August 2008, all of Africa had only 50 registered CDM pipeline
projects, about half of them in the carbon-intensive economy of South
Africa (Kenya accounts for seven of these, for geothermal, cogen and
hydropower projects). In short, Africa doesn’t spew out enough carbon to
make CDM projects, which must demonstrate avoided emissions, worthwhile!
And Africa is a tricky a place to do business... So, the “magic market
mechanisms”, touted by economists with capes and wands ten years ago,
have again failed Africa in favour of more bustling economies.



In the meantime, so-called voluntary emissions traders have set up shop
in Africa alongside the development NGO ranks. They famously raise funds
by tried-and-true methods: Convincing rock stars (Coldplay, Pink Floyd,
etc.) to pay cash for off-setting world tour carbon emissions, or by
getting travellers like you and me to pay an $5 extra for air tickets.
As was done by the Catholic Church in medieval times, these
self-inflicted penalties buy carbon remissions for guilty Northerners
through “development projects” that plant trees, promote small-scale
village energy systems or help rural poor. Largely un-regulated, these
efforts have much more to do with marketing and corporate responsibility
than serious carbon reductions or new energy projects, and their record
of “success” in actually reducing carbon emissions is extremely spotty.



* * *



What started as a plan to bring new and clean energy sources to poor
while simultaneously reducing conspicuous emissions of carbon in the
North, has met neither of these goals in Africa. It has become a form of
CO_2 lonialism where the money ends back in the north and where the
rules of the game are rigged against the very people who were supposed
to benefit.



Carbon is an item to be speculated on in the North: bought cheap, sold
when prices rise, and off-loaded like toxic stock when the market
crashes. In a very cozy world of deal-makers, the same companies that
buy and sell carbon also develop projects, calculate carbon savings,
validate projects and conduct highly-paid consultancies for
multinationals, the World Bank and the UN.



Moreover, country incentives are perverse under Kyoto --- instead of
encouraging countries to genuinely plan for reduced carbon emissions,
the carbon trading system rewards developing countries that demonstrate
a carbon-intensive path! The more you plan to emit, the more you can
claim off on your CDM baselines.



But the worst thing about carbon trading is that it does not /directly
/do that what needs to be done /now /in these days of rapidly
accumulating global greenhouse gases. Instead of simply /making the
polluter pay or change his way, /it allows the dirty player to claim
credit for something that may or may or not have happened in a far away
land. Instead of “acting locally and thinking globally”, the opposite
happens. Or not.



The little we have had of carbon trading is enough for Africa. It does
not work. So, Mr. Obama, when the USA finally does come to the table and
signs the Kyoto Protocol, we need the game to /change, /and we need
America to help repair the broken system it help build. We need a much
improved system for reducing carbon emissions for the world. We need a
system that rewards, not carbon speculators, not deal-makers, not
far-away faceless companies whose only care is their own balance sheet,
but real builders of the clean energy systems needed today by 90% of
Africa’s population who go without power and lighting on a daily basis.
Like you say, we have a long way to go, but we must face the task and
get on with it.