Hot on the heels of an amazing speaking tour by members of the Durban Group for Climate Justice – a coalition of mostly California-based groups spoke out today opposing carbon-trading schemes. Issuing The California Environmental Justice Movement’s Declaration Against Use of Carbon Trading Schemes to Address Climate Change – the groups argued that such systems are inadequate to confront the climate crisis; marginalize front-lines communities fighting environmental justice battles; and are designed to benefit corporate interests – not communities or the climate.
Endorsing organizations include California Communities Against Toxics, California Environmental Rights Alliance, Carbon Trade Watch, Communities for a Better Environment, GreenAction, Rainforest Action Network, West County Toxics Coalition and many more.
Interesting factoid - Does anyone know what organization had the largest delegation in Bali? It wasn’t the usual suspects of Greenpeace, or Friends of the Earth – it was the pro-carbon trading lobbing group – the International Emissions Trading Association. Why? Because the idea of creating a trade-able commodity of our atmosphere means trillions of dollars – in a market that working-class people have no access to – but multi-national corporations, banks, brokers, and investors are giddy over.
In addition to the myriad reasons to oppose carbon trading – here’s a big unintended, but very real consequence. We have a hard enough battle in the climate movement already fighting the lobbying interests of Big Oil, King Coal, and the Big 6. But a carbon trading scheme entails a whole new cadre of lobbyists – the brokers and traders and middle-men who have a vested interest in trading away our atmosphere and our future. A zero-carbon economy doesn’t leave many carbon credits to play and profit with – and they will help further delay our transition to a clean energy future.
- Press Release – Download PDF
- California Environmental Justice Movement’s Declaration Against Use of Carbon Trading Schemes to Address Climate Change – Download PDF
- Signatories - Download PDF
- Factsheet: The Cap and Trade Charade for Climate Change – Download PDF
- Article - “Cap and Charade: The political and business self-interest behind carbon limits,” Wall Street Journal, March 2007. – Link to article.
See the entire press release below – or visit www.ejmatters.org to learn more or sign the declaration!
BROAD ENVIRONMENTAL JUSTICE COALITION RELEASES DECLARATION AGAINST CARBON TRADING AND OFFSET USE TO ADDRESS GLOBAL WARMING IN CALIFORNIA
The Coalition Demands that California Adopt Policies that Truly Address Greenhouse Gas Emissions and Protects Communities
On Tuesday, February 19, 2008, Environmental Justice (EJ) advocates gathered at 5 locations across California for a teleconference to discuss the release of The California Environmental Justice Movement’s Declaration Against Use of Carbon Trading Schemes to Address Climate Change. The Declaration details the environmental justice community’s opposition to the use of carbon trading and offsets to address climate change because of their failure to achieve actual emissions reductions, the irreconcilable problems with trading experiments and offset use, and because of their inability to cause a timely change in the way we make and use energy.
Rather, Environmental Justice advocates are calling for policies that focus on moving the state away from burning fossil fuels for energy because such fuels are the overwhelming contributor to climate change and have devastating impacts on poor, low-income and communities of color in California and around the world. The coalition supports use of transparent carbon pricing mechanisms such as a carbon fee.
Environmental Justice advocates from around the state as well as internationally known environmental expert, Larry Lohman from the UK (a founder of the international Durban Group and editor of Carbon Trading: A Critical Conversation on Climate Change, Privatisation and Power, which documents the numerous failures of the EU’s Emissions Trading Scheme (ETS) and oppression in the Global South from the use of carbon “offsets”), were on the call. The Declaration currently has support from xxx organizations and individuals from throughout California and beyond. The Coalition urges others to join this Coalition to demand that California reject the fundamentally flawed trading and offsets approach but instead adopts policies that directly and significantly reduce emissions, require the shift away from use of fossil fuels and nuclear power, and do not cause or exacerbate the pollution burden of poor communities of color in the United States and developing nations around the world.
To get the full text of the declaration, to join the coalition, to subscribe to our new newsletter, for additional information about the failures of trading, learn about the problems with offset use, read about how carbon fees can help, and to hear the discussion, visit our new website at http://www.ejmatters.org
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It’s great to see RAN and all these other groups speaking out on carbon trading, which is such a charged and complex issue. However I remain confused by a few things. Nowhere in any of this new EJ coalition’s materials is any mention of the idea of cap and auction, which while potentially problematic in other ways is still a huge step in the right direction away from a cap and trade system in which the permits are given away for free (and as the coalition materials point out, this is why the EU-ETS failed — gets into the corporate giveaways, windfall profits, etc.). When I saw Larry Lohmann at a talk in Boston in December I asked him whether a cap-and-auction system could conceivably work compared to a free allocation cap-and-trade system and he basically skirted the issue. Why the coalition’s silence on cap-and-auction and the focus on the EU-ETS, when both leading Democratic Presidential candidates place a 100% permit auction at the heart of their climate plans and the Lieberman-Warner bill (which does not go far enough on auctions) is more relevant to the current US climate policy context? Matt we had a bit of an exchange on RAN’s blog last summer about the intricacies of cap-and-auction vs. a carbon tax (http://understory.ran.org/2007/07/25/is-your-couch-a-carbon-offset/) and I would love to again hear your thoughts on this. Correct me if I’m wrong but I believe you and other RAN staff may have blogged in support of the idea of cap and auction (either on this blog or RAN’s blog) – does this new anti-carbon trading stance reflect a shift away from support for such policies?
Is carbon trading inherently bad? Suppose carbon trading was used to enforce a cap on total emissions internationally, the permits to emit were auctioned with revenues distributed evenly (greatly benefiting the poor), and thoughtful regulation enacted to ensure the whole scheme didn’t just move emissions from here to there?
While national cap-and-auction systems would simply move emissions elsewhere, an international system would be an effective way to limit total emissions, and could be done equitably, where the trillions in value would be a cost incurred by emitters, distributed to everyone else. Naturally, some profit might be made in the re-sale/trade of permits, but the initial auction price would be reflective of the permits’ value.
While the “free market” continues to impoverish and victimize the global poor, and fail to allocate resources in a way that accounts for environmental costs, this is not an inherent trait of a market. It is a symptom of a market that fails to meet a fundamental assumption of market theory – internalized costs. Carbon cap and auction would internalize the cost of emitting, and could correct this failure of the market.
I really hope that this coalition reconsiders this stance and that it is rejected by the larger EJ community. It is wrong on the facts, misguided, and is going to utterly marginalize the climate justice movement within the larger climate movement (struggling to be born). Frankly, I’m shocked that RAN has signed onto this.
I recently heard Larry Lohmann (one of the leaders of this initiative) give his talk in Seattle. I’m sorry to say he does not appear to have a solid understanding of these policy issues.
First of all, it’s not even clear whether this group opposes *all* market-based mechanisms, or only cap-and-trade. In his talk, Larry claimed that no “pricing mechanisms” were going to create the structural change that’s needed in energy infrastructure. This is nonsense. Putting a steep enough price or cap on carbon will force profound, structural changes in energy supply markets. The issue is not the pricing mechanism, but how steep it is.
But in the declaration it appears that a carbon tax (also a pricing mechanism) is supported, and only carbon trading is opposed. This also makes little sense. Carbon trading and carbon taxes are structurally almost equivalent. In particular, if you are concerned about big polluters being able to buy permits instead of reducing their emissions, that’s exactly what a carbon tax allows them to do! Polluters will reduce emissions up to the point that it would just be cheaper to pay the tax.
The main difference, of course, between trading and taxing is that trading provides quantity certainty and taxes provide cost certainty. Many green groups favor cap-and-trade precisely because we want certainty about the total cap on emissions. A carbon tax doesn’t provide that. However, either system, if administered properly, could work well; and either one, if done poorly, will suck and just create opportunities for profiteers to make more money. But the wholesale rejection of carbon trading makes no sense.
Instead of fighting against carbon trading, the EJ community should be fighting to ensure that under a cap-and-trade system, most permits are auctioned rather than given away, and that the revenues are used in part to offset the regressive impacts of higher energy prices on poor people. And similarly under a carbon tax.
It is particularly ironic that members of the EJ community would be fighting against this kind of pricing mechanism. Energy prices are going to go up, and that’s going to hurt poor people. Pricing mechanisms are a way to make this transition in the most cost-effective way, holding energy price increases down as much as possible.
Carbon trading may not be inherently bad, but carbon “offsets” are. The problem with a trading scheme that uses carbon offsets is that it does not cap total carbon emissions, it only caps the net increase of atmospheric carbon. The net carbon increase is much smaller than the total emissions because it subtracts the carbon naturally sequestered by plants. When the whole carbon sequestering biosphere is added into the equation, polluters still have plenty of room to continue increasing their emissions. In all the carbon trading schemes suggested (EU-ETS, Lieberman-Warner, Obama/Clinton) carbon producers can essentially just buy up a corresponding amount of trees for however much carbon they produce OVER the cap. So the real total emissions under these laws is the cap + the amount of carbon our biosphere can absorb.
When the IPCC or other scientists talk about reducing our emissions by 2015 or some other date, they are talking about the total emissions. So when something like the Lieberman bill gives progressively falling annual caps, those numbers are based on scientists’ recommendations for total emissions, but they only apply to net emissions. This is like a giant slight of hand trick where people are watching a rising bird, then we think we see that bird fall. But in reality our attention has been diverted to a different bird as the first bird continues to rise. Our leaders are the magicians, we are the gullible audience.
The real problem is that corporate leaders know this, and that is why there is so much corporate support for carbon trading. That corporate support is the reason why our presidential candidates also support it. In order for us make the changes that would actually save our future, political power would have to shift away from corporations and into the hands of citizens. That is a tall order, and one that would take far greater action than anything I have seen yet. Powershift 2007 brought 6000 people to Washington, but to truly shift the power would take 20 times that number of people showing up at the Democratic National Convention and demanding change.
Why exactly are people parroting that free-market economics is the solution to global warming?
A cap and auction is not the preferable solution because it still includes the TRADE, which is fundamentally flawed for several reasons:
1. Public health, and the public right to clean air should not be a commodity to be profited from, speculated against, etc.
2. Financial incentives for fraud, trades conducted in boardrooms in secret over how or even whether to buy cheap credits or make actual investments into reducing emissions, no public accountability, and all the other reasons outlined in the EJ Coalition’s Factsheet…
3. Even if you were able to obtain a decent cap and polluters had to intially pay through an auction, the use of unverifiable offsets (e.g. methane-capture projects and tree plantations where local communities are being displaced and future generations may cut down) will blow right through that cap so little to no emissions reductions will be actually achieved.
4. Even if you were able to obtain a decent cap and price for carbon, the “market” can still be distorted. E.g. When the price for PM10 recently skyrocketed to $250,000 per pound in Southern California, the agency distributed a “priority reserve” allowing companies to purchase at a small fraction of the price so that 10 new natural gas plant proposals could go forward. If companies really want “consistency” a tax or carbon fee would give them a transparant price signal. Markets are highly volatile, e.g. the LA Times questioned, what happens when there’s a heat wave during the summer and energy demand peaks, shooting up the price for carbon credits, which the costs will then be passed onto consumers. Companies therefore, will be left guessing and speculating what the value of making reductions is, and whether or not to invest. (Read the report by the American Enterprise Institute on the coalition’s website for a good explanation of this dynamic.)
5. Cap and Auction will still suppress technological innovation while the market fluctuates, is subject to high volatility, and companies will sit on the sidelines speculating about the future price of carbon. It’s a choice between protracting/ entrenching the fossil-fuel giants, OR investing/ deploying clean energy sources. It can’t be both. In California companies are actually arguing that there is no need for the Renewable Portfolio Standard because allegedly, we’re going to have a cap and trade… While the LA electricity municipality came out against a cap and trade system arguing that under such a system they would be forced to purchase credits from other companies instead of making investments into renewables… You get what you pay for.
6. Linking with international systems is worse than having a US system, because in many countries the enforcement is weak and unverifiable. This was part of the failure of the EU-ETS where companies could just purchase cheap phantom credits from Eastern block countries. And do you really want to tell the Global South that they can’t develop because we Northern countries have destroyed their environments? Sounds like neo-colonialism to me.
7. In regard to the suggestion that auction revenue could be given back to poor communities in the U.S., with the full knowledge that a trading system would enable and/or exacerbate “hot-spots” (concentrations of localized toxic pollutants), my response is, how about I pay you, let’s be generous here, $500 to give your children cancer? Or, actually, most likely the money wouldn’t even reach you directly, so how about I gave money for STUDIES on renewables, or on asthma education programs… Would you take that? This is what ACTUALLY happens.
8. Why are people so eager to ignore the REALITY- the failures of the EU-ETS, and convinced that somehow, through all these complex economic models, tinkering, and THEORY, that the US will get it right? Why are we wasting so much time and resources that could be going towards investing in a genuine transition to a clean energy economy, on trying to make this failed approach work? And wasting this incredible opportunity and turn in the entire environmental movement, and giving it away to the neoliberal free-trade enthusiasts who stand to profit from it?
9. I don’t usually form my opinions based on the campaign platforms of presidential canidates, knowing that they’re trying to please as many people as possible trying to get elected, but the reference, actually, brings up a good point of inspiration. Most assumed that Obama was not electable, just as most are assuming that cap and trade is inevitable… But, Inconveniently, it’s wrong. And I’m going to fight it.
10. The potential costs of a cap and trade system to the economy and the govt are enormous (both the impartial Congressional Budget Office and conservative economists at the AEI wrote disfavoringly about a cap and trade system for this reason.) Then, what happens when all of these other forces outlined above lead to insignificant to no actual GHG emissions reductions, what’s the public’s response to efforts to address global warming? What’s the public’s response to the entire environmental movement?
As both carbon taxes and cap and trade market-based and don’t guarantee that any particular entity will cut emissions I don’t see why EJ groups would prefer one approach over another. Carbon taxes are also regressive and how the tax revenue is spent has the same political problems as spending auction revenue.
If it’s out of state offsets they don’t like, that a cap and trade design issue and not an inherent problem.
This declaration http://www.ejmatters.org/declaration.html strikes me as quite dated as it only talks about the EU trading system, which everyone agrees was flawed in giving away allowances to polluters, and ignores more recent policy in RGGI and even Lieberman-Warner (although Lieberman Warner shows the political problems with making entrenched polluters pay).
I am also skeptical that pricing carbon in either system will give us the emissions reductions we need. Without reinvesting revenue into efficiency, clean energy, mass transit and more, I am skeptical we will achieve the necessary reductions. At $100 a ton or $1.00 a gallon increase in gasoline I have a hard time seeing people really change driving behavior absent other choices. For the most part they’ll just pay the buck and keep driving.
In every single example of emissions trading that has been tried so far, there has been no evidence that points to their success in effectively reducing emissions.. the reason that they are being so agressively pushed the world over is because they neatly dovetail into the economic dogma of privatisation and deregulated, ‘free’-market mania.
The California Environmental Justice Movement, that has taken such an admirably principled and pragmatic stance against the nonsense of carbon trading, is in a uniquie position to fully understand the inherent vulnerablities to corporate self-interest of such schemes through the experiences of the corruption and the environmental racism of the RECLAIM programme and SO2 trading under the Clean Air act.
The question of whether or not to auction permits is a minor distraction from the fact that such schemes are incredibly susceptible at every stage of both the design and implementation to the influence of corporate interests who will seek to use them to their own advantage.
There is no way that the creation and market-distribution of a new set of property rights in this way is ever going to either benefit the poor, or address the issue of climate change. Carbon trading is all about land grabbing and capital accumulation.. the same old issues in a new, greenwashed guise.
There are a number of other measures that can be taken in the face of climate change, at the level of the individual, communities and governments, and hair-brained carbon trading schemes serve only to crowd out the effective responses while making large profits for the biggest pollutors as they continue with business-as-usual.
This declaration is enormously inspiring and heartening to the many groups around the world (many of whom have signed the Durban Declaration on Climate Justice) who have been exposed for some years now to the corruption, oppression and ineffectiveness of the global carbon market for some years now.
I think Phil is correct in criticizing the effectiveness of a carbon tax and mistaken in his assumption that markets are capable of producing the needed changes, even in theory when you get to the nitty-gritty of neo-classical economic “theory” (ideology) which the plans are based on. The theories of neo-classical economics are based on assumptions which are fundamentally incompatible with representing ecological conditions. Those assumptions are that for a market to function all values have homogeneous (representable as money), quantitatively unbounded (there is no absolute limit to the amount of money in the system), and all processes must be reversible. None of these are consistent with the carbon cycle (or any of the earths specific, finite, and evolutionary systems). Economist Paul Burkett has some excellent work on this glaring contradiction.
Furthermore “Polluter Pays” carries the assumption that you can undo the effects of the pollution with money, which is not often the case (a main point of the environmental justice movement). Germany was able to reduce SO2 emmission faster than the US who used a cap and trade approach by simply ordering the companies to meet the requirements. There is also the implicit assumption that we have to allow corporations to pass on costs to their consumers rather preventing that through any number of actions. E.G. New Deal type price controls, subsidies from taxing the wealthy, better yet democratically socializing energy production. Its crucial to be aware how climate interventions affect the world capitalist system’s markets, but not to preserve those markets for their own sake; profit motive is a poor tool for creating social/ecological justice.
Allies … thanks for this passionate conversation. One thing I hear is a lot of anger about the abuses of the “free market” system. No argument there. What I’m confused about is what positive alternative is being advocated. The declaration advocates a carbon tax. That’s fundamentally equivalent to carbon trading — and equally subject to political loopholes. If you’re opposed to all market-based mechanisms, then … what? I haven’t seen a serious proposal that doesn’t include carbon pricing, but I would be interested to.
I agree with Phil in questioning what is proposed instead of cap-and-trade/auction. A carbon tax plays into the same neoliberal market-based approach to the world – but with its own disadvantages. A carbon tax only appears more straight forward, in practice it is just as prone to corruption and manipulation. It also does not contain the cap component and reaching goals with a tax is much more difficult than it seems. Multiple studies have shown that the price of gasoline has little effect on consumption. Instead, we need to approach the issue using something like CAFE. No green groups assume a cap-and-auction by itself will solve all the problems – it needs to be combined with a Renewable Electricity Standard, a moratorium on new coal, energy efficiency projects, green jobs, etc.
If the argument is that we need to go for command and control, then I’m all for it (but good luck getting business on board). However, I don’t agree that a tax will somehow have less capitalistic tendencies.
The question is: What has the best chance of being approved by congress in time for it to actually matter? There are always going to be better alternatives, but we can’t assume we live in a utopian society. We are working with a very real timeline which will force us to make compromises (however much we hate to admit it). I think the battle against big business can continue, but we need to make sure it doesn’t compromise the goals we absolutely need to achieve.
With that said, I don’t like the neoliberal economic model and think we need to get as far away from that as possible. However, the mindset and infrastructure and mindset we are trying to change will come through smaller policies. Cap-and-Auction, strong CAFE and RES standards, combined with massive investment into renewable energy and green jobs will get us much closer to social and environmental justice than opposing the growing political will. The momentum is there, lets help shape what it creates – not isolate ourselves on the fringe. These policies are going to be created within the next few years. With progress already underway on many it is unlikely we will be able to completely shift gears and still have time to address climate change.
We need to keep our high goals and ideals, but we also need to be strategic.
Carbon trading is a great ideas. YOu may debate it b/c it allows carbon emissions, but we need real solutions in a corporate world. One of the biggest success stories is the current system we have where companies can trade their SO2. Tons and tons of companies use scrubbers, flue gas desulfurization, and whatnot to reduce their SO2 so they can profit off meeting regulations. It became viable to thus pursue cleanup from a monetary standpoint. If CO2 is done this way, companies stand to profit from being cleaner. How is that not viable. Corporations only act if money was involved. Coal is not going to go away, predictions call for the increase of it over the next few years. Instead of a fairy-tale world of getting rid of coal right now, we need to give companies reason too. http://web.mit.edu/newsoffice/1997/emissions-1217.html
This is a strategic solution and has been imposed for So2, nox emissions, and has been hailed as a smashing success. Companies then stand to profit from being clean, ones that arent stand to lose tons of money. Real solution for a real world
Cool RAN is in o this. Too bad they still support logging through the FSC fake wood certification….