Kyoto Protocol: Money To Burn

Industrial societies have long been releasing excessive amounts of carbon from underground deposits of coal and oil, where it was safely sealed off from the atmosphere, into the air. It’s now clear to everyone except the flat earth society that this burning of carbon-based fuels has set us on a collision course for climate chaos. It’s also clear that the world’s most highly industrialised countries – with the US firmly at the top of the list – have done the bulk of the damage.

Cue the United Nations on its shining white charger, riding into Kyoto to deal justly with this threat to the planet with a ‘protocol’ that rights all the wrongs . In your dreams…

The Kyoto Protocol is aimed initially only at rich industrialised countries, asking that they make a pathetic 5.2% average reduction of 1990 carbon emission levels by 2012, and, for the time being, countries in the ‘global south’ don’t have to change. This appears like a selfless gesture, with industrialised countries taking responsibility and leaving poorer economies free to grow for the moment. Again, sorry to disappoint…

Kyoto is not a positive change towards reducing greenhouse emissions, let alone a redressing of global imbalances, but rather a commodification of the atmosphere, a thriving new market with the same old business interests firmly in charge. For a start, a 5.2% reduction isn’t remotely what’s needed to halt climate change – try something nearer 60-90%. The Protocol is effectively not just business-as-usual for the energy and financial industries, but actually creates the conditions for them to keep growing.

Carbon Trading is a central part of the deal. This is a system where instead of actually reducing emissions, a system of credits is introduced, where permits to ‘emit’ can be bought instead of actually reducing emissions. It goes something like this: countries which are either using less than their quota of emissions, or say they can remove carbon dioxide from the atmosphere by planting something called a ‘carbon sink’ (that’s a forest you and me), have credits to sell ‘permits’ to those who are spewing out more emissions than they should. For example if Russia doesn’t need all the permits of greenhouse gas output which it was granted in 1997, it can then sell the surplus to Europe or Japan, who may decide that reducing emissions by 6% was too expensive, and a cheaper option is to buy cheap emissions permits from elsewhere. It won’t need to buy permits for the remaining 94%: these it already has “title” to, free of charge – at least until 2008.

This is a key inequality of Kyoto - that from the outset every country is given permits to spew out what it’s already spewing (minus the paltry 5.2%). So in this privatisation of the atmosphere, the worst polluters continue to get a vastly disproportionate licence to pollute, as they drag the rest of the world towards climatic catastrophe . The succession of UN conferences (known as COP’s, or Conference of the Parties) which have been held since Kyoto have led the protocol firmly towards a new carbon trading market, with oil industry lobbyists weaving in loopholes wherever possible, pushing the fact of this global inequality to one side, and the prevention of climate change on the other. The most recent meeting – November 2001’s COP7 in Marrakech – was no different, and it’s unlikely that there will be a change at October 2002’s COP8 in New Delhi either.

How can you earn these ‘carbon credits’ in this emerging new market of the carbo-industrial complex? Not only by planting trees, but also rearranging traffic signals (!), ‘managing’ forests, or even burning more coal – provided you can show that these are resulting in fewer greenhouse gas emissions than “would otherwise be the case”.

George W Bush’s withdrawal from the climate negotiations means very little at this point because Kyoto isn’t even a very small step in the right direction, and essentially the oil lobby have got what they wanted.

THE CASE AGAINST CARBON TRADING
(from Rising Tide)
CARBON TRADING IS CONTRARY TO SOCIAL JUSTICE
THE LARGEST RESOURCE GRAB IN HISTORY: You can’t trade in something unless you own it. When governments and companies “trade” in carbon, they establish de facto property rights over the atmosphere. At no point have these atmospheric property rights been discussed - their ownership is established by stealth with every carbon trade.

THE CARBON TRADE WILL STRENGTHEN EXISTING INEQUALITIES: Shares in the new carbon market will be allocated on the basis of who is already the largest polluter and who is fastest to exploit the market. The new “carbocrats” will therefore be the global oil, chemical and car corporations and the richest nations; the very groups that created the problem of climate change in the first place. What’s more, the richest nations and corporations will be able to further increase their global share of emissions by outbidding poorer interests for carbon credits.

SO-CALLED SOLUTIONS POSE A DIRECT THREAT TO VULNERABLE PEOPLES: Development projects such as nuclear energy, large dams and other large-scale, hi-tech projects – as well as tree planting - have come to be known as Joint Implementation and Clean Development Mechanisms in the Kyoto Protocol and are tradable. But they assert foreign ownership of local resources, consolidate the power of undemocratic elites, oust people from their land and undermine local self sufficient economies and low-carbon cultures.

CLIMATE CHANGE REFUGEES: Displacement of peoples caused by the large scale projects on their land, as well as those who have had to leave land because of climate change effects such as droughts or flooding, are turning millions into refugees.

ECOLOGICAL DEBT TO ‘SOUTH’ NOT ADDRESSED: Repayment of the ecological debt of the north to the south, which is caused by the extraction, use and destruction of southern resources such as fossil fuels, minerals, forests, marine and genetic resources, is not acknowledged. Neither is the fact that while a small number of highly industrialised countries have caused the damage, all countries suffer the consequences of climate change.

MANY OF THE SOURCES OF CARBON CREDITS ARE SCAMS
TREE PLANTING IS NOT A SOLUTION TO CLIMATE CHANGE: Carbon absorbed by forests is only removed from the carbon cycle for as long as the tree is standing and alive. Industrial forestry will not sequester (breathe in) carbon.

CARBON TRADING ALLOWS COMPANIES TO PROFIT FROM MEASURES THAT WOULD HAVE BEEN INTRODUCED ANYWAY: Because we cannot know the future, we cannot be certain that a project selling carbon credits has really reduced its emissions further than would have occurred without this intervention. Competition and technical innovation, for example, ensure that industry consistently reduces its energy costs. For example, British Airways, an early supporter of the new UK emissions trading system, is claiming financial credits from the government for the cut in emissions caused by the collapse of its business after September 11th last year, (actually it was in trouble long before S11, and simply used it as a convenient hook on which to hang extensive job cuts…)

“HOT AIR” TRADING IS AN ACCOUNTING FRAUD: Russia’s economic collapse since 1990 has reduced its emissions by 30%. Russia is intending to sell this incidental windfall (often call “hot air”) as international carbon credits – potentially swamping the market. If countries subsidise their emissions with these Russian credits, the final global emissions will end up being exactly the same as they would have been without a carbon market or a Kyoto protocol.

HUGE INCENTIVES FOR CHEATING: There are strong incentives for cheating and creating bogus credits that do not represent any real reduction in emissions. The seller gets the cash without having to change anything and the buyer gets cheap credits. And what’s to stop you transferring polluting activities to areas that are not accounted?

CARBON TRADING CANNOT WORK
THE CARBON MARKET CANNOT BE MONITORED OR CONTROLLED: The temptation for all parties to cheat means that every transaction must be scrutinised and every sale certified. Yet there is no global institution or accounting system that can manage the complexity of this market.

THE LEGAL FRAMEWORK WILL NEVER BE STRONG ENOUGH: International legal frameworks are usually very weak. Countries that want to use carbon credits to subsidise their emissions are already arguing for penalties so small they will fail to discourage cheating. The door is open for any country desperate for foreign currency to endorse doctored carbon credits.

CARBON CREDITS FROM DIFFERENT SOURCES ARE NOT EQUIVALENT: The market assumes that carbon credits from different sources will be fully interchangeable. However, carbon sequestered in sinks (that is breathed in by forests) is an entirely different product from the carbon “saved” by a technical innovation, which is different again from the carbon “saved” by changes in social patterns. Add to this the complexity of trading in different greenhouse gases. Each source requires different monitoring rules, different criteria and different agencies. Forcing them to be interchangeable in one market is a recipe for corruption and fraud.

THE REAL REASONS FOR CARBON TRADING
∑ Governments want to be assured of a cheap way to buy off their failure to meet Kyoto targets that will keep the public and corporations content.
∑ Brokers, accountants, and financial institutions are extremely excited at the thought of the size of their cut in a new $2.3 trillion speculative market.
∑ Corporations and other major polluters want “flexible” governments who don’t punish them for their emissions and hand over public money to pay for any emissions they are forced to make.
∑ Oil companies support carbon trading as a way to avoid making any cuts in oil production.
∑ Academics and financial consultants see rich pickings from becoming “experts” in the new market.

SOLUTIONS TO CLIMATE CHANGE
∑ Educate the public on the urgency of climate change and the need for dramatic solutions.
∑ Set a schedule for cutting global fossil fuel consumption by 60%, and 90% within ten years.
∑ Recognise the moral (and political) imperative for fairness and social justice by allocating targets to every country on the basis of equal per capita emissions.
∑ Reduce the supply of fossil fuels with an international ban on all new oil, gas and coal development. As a first step, cut the $200 billion per year global subsidies for coal and oil power. Carbon trading is not concerned with the supply of fossil fuels, which is why oil companies support it. As a result, government subsidies are increasing, reducing the price of energy and swamping any attempts at reducing demand.
∑ Invest heavily in renewable energy to replace all fossil fuel supplies. Right now funding renewables is a far more expensive way to reduce carbon emissions than credits from bogus “hot air”, tree planting, or outright fraud. These cheap carbon credits will dictate the market price.
∑ Involve all people in the achievement of climate justice – particularly those most affected in the ‘global south’.