Well I am here in Nairobi, my first International Conference and real experience with taking action on the climate change crisis. Although I am in the world’s most impovrished continent, I don’t truly feel like I am
in Nairobi from within the sheltered guarded grounds of a UN compound, sitting on a computer with internet, and watching men in expensive suits pass by. Closing our eyes to the reality of Nairobi and to the reality of how our actions affect others was reflected in a side event I attended a few days ago about the impacts of carbon trading on Indigenous Peoples. It was incredibly eye-opening to hear Indigenous peoples from all over the world proclaim that CDM’s have brought nothing but devestation to their land, their culture, and their spirituality.
The speakers at the event strongly believe that the idea that living and breathing entities (trees) could
be threoretically bought or sold in order to gain credits is ludacris and just plain wrong. These beliefs raised the issue that is constantly being addressed within a climate change framework: the dichotomoy between
climate change and economics, or whether this dichotomy exists at all. Is climate change inextricably liked with economics?
Judging from the conference negotiations, I think that most people would not hesitate a second before answering with a resounding yes. The Indigenous peoples, on the other hand, are much more focused on the moral aspect of
climate change. Unfortunately, in more areas than climate change, they are the ones who are marginalized, and whose voices are silenced. It is Indigenous land that is being traded because it’s people have nurtured it, respected it, and share a connection with it. But they do not hold the power. That is dictated by economics.
The event made me reflect on power, money and environment. How would the people of Beijing feel about climate change if
they grew up in a small rural community? What about New York? How would Indigenous peoples feel about climate change if they grew up as the children of wealthy oil tycoons? How much of our views on morality, nature and climate change are shaped by our experiences? Maybe we, as people who are interested in reading an IGHIH blog have been born with a silver
spoon in our mouths, in the sense that we have had the opportunity to be exposed to this issue, to experience suffocating smog or a pristine lake and understand that something needs to be done. We are not acting for economic
reasons, but much of the rest of the world is. Who will be sacrificed in the name of progress for, or against climate change? How many more voices will be silenced? How much are we willing to sacrifice, how far will we bend our morals to get industry and powerhouses to jump on board? We may not know the answers to all of the climate change questions, but we certainly know the answer to this: What is the cost of climate change? Much more than economics.
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Thanks for that, Jessica.
Here is a similar article from the Guardian, about carbon offsetting:
Trading spaces in the sky
In the light of the recent Stern report, can carbon offsetting really work?
Terry Slavin on the controversial business fix to ’save the planet’ - and
whether western companies are exploiting the developing world
Wednesday November 15, 2006
The Guardian
It is being called “the green goldrush”. Billions of dollars of investment money
is piling into the booming EU carbon trading market, which is expected to more
than double to €22bn (£15bn) this year. And London, where 80% of the European
trade is being conducted, is the new El Dorado. But is all this frenetic
activity a business fix to save the planet, as the City would have people
believe, or the destructive new face of international capitalism?
Article continues
On the fringes of the talks on the future of the Kyoto Protocol taking place
this week in Nairobi, Kenya, indigenous people and non-governmental groups have
been telling delegates how the investments in developing countries’ “clean
energy” projects - which are now fuelling world carbon markets - are exacting a
terrible price, with communities being robbed of their land, and livelihoods
damaged by projects such as hydro-electric dams and fast-growing tree
plantations.
The projects, which are supposed to reduce greenhouse gases and contribute to
sustainable development, are awarded certified emissions reductions (CERs),
which can be used either by governments buying them to help meet Kyoto targets,
or by companies surrendering them to help meet their allocations under the EU
emissions trading scheme.
It is a new international market that is developing rapidly, but critics say it
is encouraging destructive development and lining the pockets of the rich. “We
are not only victims of climate change, we are now victims of the carbon
market,” says Jocelyn Therese, a spokesperson for Coica, the coordinating body
of indigenous organisations of the Amazon basin.
Moreover, the projects are doing little to help encourage sustainable
development in poor countries, say critics as authoritative as the government’s
climate economist, Sir Nicholas Stern, whose report last week changed many
people’s understanding of the need to address climate change.
Required incentives
Deep within the Stern report on the economics of climate change is a stinging
criticism of the UN’s Kyoto Protocol Clean Development Mechanism (CDM), which
allows countries and businesses in the rich north to trade in carbon “credits”
with the south. “The CDM in its current form is making only a small difference
to investment in long-lived energy and transport infrastructure,” he said.
“While a substantial international flow of funds is being generated through
CDM, it falls significantly short of the scale and nature of incentives
required to reduce future emissions in developing countries.”
One has only to look at where the money has gone up to now to see why. CDM
projects are expected to secure 1.4 bn tonnes of CO2 emission reductions by the
end of 2012, with 400 projects approved by the CDM’s executive board and 900
more in the pipeline. But according to the World Bank, only 10 % of CDM
projects by volume in the 15 months to March this year involved energy
efficiency, fuel switch, biomass or other renewables projects - areas that
Stern says are critical to the long-term reduction of greenhouse gas
emissions.
Almost 60% involved destroying the industrial gas HFC 23, a greenhouse gas
nearly 12,000 times more destructive than CO2 but which costs as little as 75
US cents per tonne of CO2 equivalent to deliver - and can be traded for as much
as 10 times that.
In their pursuit of cheap HFC credits in countries such as China and India,
African countries have been almost entirely bypassed, despite the fact they
have the most to lose through climate change. Ricardo Nogueira, investment
adviser at Aim-listed Trading Emissions, says his company would like to invest
in Africa, and is looking at a couple of prospective projects, mainly to siphon
off methane from large landfill sites. “We feel we have a duty and obligation to
make CDM work in Africa,” he says.
But there are huge barriers, including a shortage of large enough projects to
justify the hefty transaction fees, and a critical lack of information to get
projects through the CDM’s strict verification process. “It’s a fractured
continent with many, many countries dividing up limited resources,” he says. “A
lot haven’t got very far in developing their approval processes.”
The big problem with getting CDM projects approved is proving “additionality” -
showing that the project would not have gone ahead without the carbon credit.
Stern says the project-based nature of the CDM market “creates issues of moral
hazard and gaming, where there are incentives to manipulate the system to
increase the rewards received (or reduce the costs paid).” In other words, it
can perpetuate a regime where the polluter wins.
Patrick McCully, of International Rivers Network, which has been monitoring the
impact of CDM on global dam projects, says additionality is largely a joke: “We
thought carbon credits would allow destructive projects to go forward that
wouldn’t otherwise have been built. But we found the opposite. The carbon
credits were going to projects that would have gone ahead anyway - they were
the icing on the cake for developers.”
Vested interest
He says a fund run by the World Bank is seeking carbon credits to finish
constructing a dam in Sierra Leone that had been 85% complete before it was
abandoned during the civil war. How can that possibly be considered additional,
asks McCully? He is also concerned that criticisms of CDM made by IRN have been
ignored. “In every case they’ve been ignored. The comments go to the
validators, who have a vested interest in the projects going forward,” he
says.
This is a complaint heard frequently in India, the most enthusiastic player in
the carbon market. Soumitra Ghosh, a researcher with a West Bengal NGO that has
been investigating the trade, says India’s national CDM authority clears
projects speedily, awarding credits to some of the most polluting companies in
the country on the basis of claims that they are cleaning up their acts.
He says that, despite the CDM’s requirements for community consultation,
affected communities have been kept in the dark. In one case, project design
documents for four different Indian biomass power schemes repeated - even down
to the spelling mistakes - allegedly favourable comments made by local village
heads. “We’ve looked at 40 projects in various sectors,” says Ghosh. “All are
violating laws, involved in land grabs, fleecing the local communities of their
land by buying it cheap.”
For Larry Lohmann, author of Carbon Trading, carbon credits are just a new
instrument for northern energy companies to exploit the developing world.
“Added to classic local conflicts over extraction, pollution, and labour abuse
are now, increasingly, local conflicts over “carbon offsets” - the projects
that license and excuse the extraction, the pollution and the abuse,” he says.
Axel Michaelis, a member of the registration and issuance team advising the CDM
executive board, accepts that many of the early projects approved for carbon
credits were dodgy. “In the first six months it was like the wild west -
everything was passed,” he says. In March this year, however, the CDM board set
up his team as a second level of scrutiny, and he is convinced bogus projects
are now being blocked.
He says transaction costs have fallen, sometimes by half, because there were
more projects, bringing down the barriers for small renewables projects. And
though the scheme is far from perfect, the CDM has actually succeeded in
cutting emissions. “You can criticise the industrial gases projects, but they
are reducing emissions and they aren’t having a negative impact on local
communities,” he says. “Four years ago, no one was talking about HFCs.” Other
CDM supporters say it has encouraged cuts in the easiest areas first - what are
called “the low hanging fruit” - and that China has reinvested 80% of the money
it makes from CDM projects into renewable energy projects.
Michael Grubb, visiting professor of climate change at Imperial College London
and chief economist with the Carbon Trust, says it is ironic that CDM, which
was established as the most cost-effective way to reduce global emissions, was
being criticised for doing just that.
Long-term investments
“CDM is funny hybrid between a market and a political construct,” he says. “It’s
not a pure market by any stretch and there’s a lot of discretion being taken
about where people want to spend money [in the developing world]. But it’s
better than nothing and it’s something that can be improved.”
But critics say the CDM’s premise that carbon can be commodified is false, and
that time, money and expertise are being wasted trying to perpetuate that
fiction instead of making the structural changes and long-term investments that
Stern says are needed to save the planet.
Lohmann points out there is already an international protocol to eradicate HFCs,
but the fact that companies can make money out of HFCs through the carbon market
means HFC production may be going up, and governments are unlikely to take
action.
“There’s a fundamental contradiction in the CDM,” says Lohmann. “You either have
cheap, meaningless, unverifiable projects or those that are verifiable and
plausible where you need to invest too much money and take too much political
risk. I don’t believe renewables will ever be supported by this carbon
market.”
· Pollution as usual
To Norman Philip, CO2 is not some invisible gas melting distant glaciers. It’s
something that rattles his windows and turns the sky red at night when the oil
refinery in Grangemouth, Scotland, flares off its gases. As he points out:
“When you’re living next to an oil refi nery, you can see emissions.”
And he is angry that while traders in the City strike it rich in the carbon
market, there is pollution in Grangemouth.
Along with the CO2, Grangemouth is exposed to a chemical cocktail that includes
benzene and sulphur dioxide. In August, benzene leaked out of a tank in
Grangemouth harbour, and in 2000, BP was fined £1m after a huge explosion at
the refinery.
Ironically, the new owner of Grangemouth refinery, Ineos Fluor, is one of the
biggest winners in the carbon bonanza, having sold millions of CDM certifi
cates by cleaning up HFCs in its Korean operations.
Philip and other activists have forged an alliance with a community in Brazil
who are fighting an attempt by the World Bank to earn carbon credits through a
huge expansion of a eucalyptus plantation. Environmental groups say that such
projects are forcing peasants off land, poisoning agricultural land, and
sucking water tables dry. So far, none has been approved by the CDM executive
board, but they are being funded in the voluntary carbon off setting sector.
“Locally, people were horrified by the Brazilian experience,” says Philip. “And
the people in Brazil were horrified by our experience as well.”
· Any comments on this article? Write to society@guardian.co.uk