This article is a guest piece, written by my pal Kevin Smith – from Carbon Trade Watch over in the UK. Kevin and other members of the Durban Group for Climate Justice are just about to wrap up a 2-month speaking tour across North America, facilitating critical discussions on carbon offsets and emissions trading systems.
OFFSETTING DEMOCRACY
By Kevin Smith Carbon Trade Watch/Transnational Institute
(first published in March/April 2008 Resurgence Magazine)
Carbon trading and offsets distract attention from the wider, systemic changes and collective political action that needs to be taken in the transition to a low-carbon economy. Promoting more effective and empowering approaches to climate change involves moving away from the blinkered reductionism of free-market dogma, the false-economy of supposed quick fixes, the short-term self interest of big business.
THE CONCEPT THAT underpins the whole system of carbon trading and offsetting is that a ton of carbon here is exactly the same as a ton of carbon there. That is, if its cheaper to reduce emissions in India than it is in the UK, then you can achieve the same climate benefit in a more cost-effective manner by making the reduction in India.
But, the seductive simplicity of this concept is based on collapsing a whole series of important considerations, such as land rights, North-South inequalities, local struggles, corporate power and colonial history, into the single question of cost-effectiveness. The mechanisms of emissions trading and offsetting represent a reductionist approach to climate change that negates complex variables in favour of cost-effectiveness.
So when the Dutch FACE Foundation plants trees in Kibale national park in Uganda to offset consumer flights, it ignores the fact that the land has been the site of violent evictions in the recent past and is still hotly contested by the people who once lived there. When companies buy carbon credits in the EU Emissions Trading scheme, the cheapness of the supposed emissions reductions is all that is important. But, any offsetting in Southern countries to justify emissions in Northern countries completely bypasses the issue of the extreme disparity in the levels of per capita carbon consumption and assumes that emissions reductions in the South can be treated like another colonial commodity to be extracted and traded.
Even within the cost-obsessed logic of the market, the use of carbon trading and offsetting goes against common sense. The point of the system is to provide opportunities for Northern companies to delay making the costly transition to low-carbon technologies. This is indeed, ‘cost effective’ in the short term, as its easier and cheaper to buy carbon credits rather than go about the complicated business of making those changes, but studies have shown time and again that the longer we delay making those changes, the more expensive and difficult it will be, in terms of society enmeshing itself even further in the web of fossil-fuel dependency, and of even more costly adaptation to the exacerbated impacts of climate change.
There has already been some documentation of how offsetting can be used by countries to avoid taking responsibility for meeting their Kyoto targets, and how fundamentally unsustainable companies like Land Rover, BP and BA can use offsets in an attempt to garner undeserved environmental legitimacy. What is more disturbing are the new ways in which offsets are being creatively applied by the corporate sector in order to further their agenda.
THE CORROSIVE INFLUENCE of offsets illogic is now not even restricted to the sphere of climate change and carbon emissions. Coca Cola has been the subject of sustained campaigns by social justice groups all over the world, but its business practices in India have received particular attention. In 2003, the Delhi-based Centre for Science and the Environment issued a report on laboratory tests that showed pesticide and insecticide levels of between eleven-times and seventy-times the maximum set by the European Union for drinking water, in a number of soft drinks being sold by Coca Cola in India. The US-based India Resource Centre has made numerous allegations against the company, saying that it causes severe water shortages for local communities, and that its bottling facilities pollute the surrounding soil and groundwater. In March 2004, officials in Kerala, a state in Southern India, shut down one of Coca Cola’s bottling plants over claims by local communities and activists that it had drained and polluted local water supplies.
In August 2007, while he sipped a can of Diet Coke in front of the distinctive World Wildlife Fund (WWF) panda logo, the CEO of Coca Cola, Neville Isdell announced a $20 million dollar partnership with WWF that would aim to “replace every drop of water we use in our beverages and their production.” Aside from plans to reduce and recycle the water being used, the third component of the package was to replenish. This replenishment wouldn’t be taking place at the sites of the water depletion, but through a series of projects taking place in other parts of the world – effectively water offsets.
This $20 million sum (which represents less than 1% of Coca Cola’s enormous $2.4 billion annual advertising budget) is being used to counteract the huge amount of negative publicity that Coca Cola has received through its practices of water depletion and pollution in countries like India. The company has maintained a vigorous campaign of denial of responsibility for any of the devastating impacts that such communities have suffered, so by using water offsets, it can play the corporate good guy in other parts of the world without having to even acknowledge the damage it has caused elsewhere.
The potential for water offsets isn’t limited to just individual acts of corporate greenwash. Some commentators, like John Regan, a carbon credit-supplier on the Chicago Climate Exchange, sees Coca Cola’s water offset scheme as “an encouraging sign of the nascent need for a water-credit trading scheme.” The idea is that if one company didn’t control its water pollution sufficiently, it would have to purchase credits from another company that had controlled its water pollution beyond its target.
Like carbon trading, such a scheme would provide ample opportunity for obscure accountancy procedures and the flurry of market activity to give the impression of activity and mask the fact that very little happens in reality to address the fundamental issues of environmental degradation and social injustice.
MANY OTHER SCHEMES to commodify and trade away environmental problems have been proposed or are in development, including landfill trading, endangered species trading and wetlands banking. The irony is that it is the perpetual expansion of market economies that has created such pressure on natural resources and threatened all manner of ecosystems with the soaring levels of industrial pollution. Now, those same market forces are being put forward as the panacea to our multiple environmental ills. This commodification agenda has little to do with public interest – it’s more about the opportunities for businesses to capitalise on the transactions of such new markets. What is claimed to be a cheaper solution for industry to meet environmental standards transforms a political and social issue into a market issue, thus offsetting democracy.
If we are to properly grapple with the issue of climate change, we need to develop and apply a systemic analysis that goes beyond the fixation with cost or even carbon dioxide, and promote synergies with other important struggles in the areas of trade, finance, human rights, biodiversity, environmental justice and democracy. •
Subscribe by Email!
Subscribe by RSS!
Share on Facebook
Kevin,
Your objections to getting carbon offsets from developing countries – “land rights, North-South inequalities, local struggles, corporate power and colonial history” – area all essentially different sides of the same objection. That is, that we shouldn’t pursue greenhouse gas reductions in developing countries because it’s akin to stealing their resources in order to excuse our climate sins.
I couldn’t disagree more. While it is completely true that the developed world is primarily responsible for most of human-caused global warming, that doesn’t mean that the solution must necessarily leave out the developing world. In fact, paying land-owners in developing nations NOT to cut down their forests is one of the most cost-effective ways to fight global warming, not to mention a textbook example of using 1st-world wealth to PREVENT the exploitation of 3rd-world resources.
You advance a related objection, using the Coca-Cola initiative as an example, that big corporations only support environmental projects to rejuvenate their image. I have heard this objection in many forms: that individuals are just paying off their “carbon guilt,” or otherwise absolving themselves of their sins. In response, I would say that I don’t care what your motive is, so long as the CO2 is reduced.
Admittedly, this position offends some people’s sense of justice. These people rightly want to hold big business accountable for past sins. That’s fine. But I want to say to big business: now is the time to help us solve this global problem. And if it take $20 million to buy rainforest in a developing country, I don’t care if that $20 million comes from hippie environmentalists or from corporate executives. So long as the land is protected.
I call this position: the CO2 bottom line.
Great points. I had the pleasure of talking with Kevin Smith a few weeks ago and have continued educating myself on the dangers of carbon offsets. I’ve watched the paper and pulp mills press for carbon offsets in Washington state’s climate change bills for their forest offset projects. However, I am still slightly torn. A piece in the New Yorker last week had a quote from a carbon offset guy who was trying to get carbon offsets into the Amazon to create an economic incentive to keep folks from burning and cutting down the Amazon to replace it with economically viable things like palm oil plantations or cattle grazing land. He argued that the forests must have an economic value as they are to prevent poop folks from tearing them down and it seems like a viable scheme. I still hate the way offsets simply allow business as usual, but if we can keep trees that were legitimately in danger out of harms way, maybe that is okay. What other financial resources might we have to fund such a project?
Thoughts?
I don’t think that the carbon market is at all the nest policy instrument for reducing deforestation.. should be looking at what the principle drivers of deforestation are and address them.
To many arguments to go into here.. I would refer people to an excellent briefing paper put out by FERN
http://www.fern.org/media/documents/document_4074_4075.pdf
Seeing ‘RED’? ‘Avoided deforestation’ and the rights of indigenous peoples and local communities
I am sympathetic to FERN’s concerns about poorly implemented forest projects. It’s clear that there’s a big potential for abuse. But of course, that exists with or without carbon trading. But I disagree with the basic premise of this argument (quoted from the FERN paper cited above):
“Carbon trading schemes also allow ‘business as usual’ for Northern polluters with continued reliance on fossil fuels, and provide no encouragement to change patterns of conspicuous consumption.”
The whole point of cap-and-trade is that it puts a price on carbon. This is not business-as-usual. As the cap gets tighter over time, the price goes up. This is just the same as if we had a carbon tax that was increasing. When firms are forced to either reduce emissions or buy carbon credits, it changes their behavior (as long as the cap is tight enough). It’s premature to point the finger at Kyoto and the European Trading System and say it has failed. It’s a complex problem and the ETS is just getting started. Please don’t let the perfect be the enemy of the good.
From the various pollution schemes pioneered in the US, to the pioneering UK-ETS, to the 1st round of the EU-ETS, to the second round, there is no evidence for the effectiveness of such schemes in reducing emissions.
For more on this, see Gar Lipow’s post on Gristmill http://gristmill.grist.org/story/2007/2/18/205116/813 about the chequered record of pollution trading schemes of this type.
This is even discounting the social injustice they have perpetuated, from the various toxic hot-spots they have created in the US, to the vast sums being channeled in the form of carbon financing to many of the dirtiest corporate entities in Southern countries.
It’s not a question of criticising carbon trading because its not ‘perfect’ – at every step of the design and implementation of such schemes they are more vulnerable to corporate influence than more traditional forms of regulatory measures. The Wall Street Journal confirmed last March that emissions trading “would make money for some very large corporations, but don’t believe for a minute that this charade would do much about global warming.” The paper termed the carbon trade “old-fashioned rent-seeking . . . making money by gaming the regulatory process.”
I am graduate of Geography. Igraduated just last year. I want to know more about carbon trading, its mechanism and system. This concept is not known in our developing country here.
Thank you.