The climate for profits

Market-based 'solutions' to global warming will raise the profits and salve the consciences of the rich, while making the poor bear the costs- without tackling the causes of global warming. Derek Wall is Principal Speaker of the Green Party of England and Wales.

While George Bush and an army of oil-fuelled sceptics have been denying that man-made climate change is occuring, the real global warming scandal has become entrenched. Through the system of carbon trading and the practice of 'carbon offsets', market based climate control is enveloping the planet. This will dish out poverty to those in poverty, and profit to those who already win in the fixed global casino.

While global warming is promoted by unrestrained capitalist growth, the approach developed at Kyoto and championed by the Stern Report, uses climate change as a way of allowing capitalism to make more money. Sir Nicholas Stern, who was commissioned by Gordon Brown, notes that carbon trading has the potential to generate billions of pounds in profits for for financial centres such as the City of London. Far from being based on a green approach, the framework developed to deal with climate change is founded on an architecture of accountancy that will make the fat cats fatter still and do little to solve the problem. The Stern Report was welcomed enthusiastically by the Confederation of British Industry.

‘Cap and trade’ is the system under which countries agree to limit CO2 production and then sell the right to produce carbon dioxide if they produce less than their limit. In the European Union this system is known as the Emissions Trading Scheme (ETS). It is sustained by giving companies and other large institutions CO2 allowances which they can sell. In turn, individuals who produce CO2 by air travel are attracted by the concept of 'carbon offset'. Thus they feel that they can carry on flying, while paying for carbon reduction schemes which supposedly balance their greenhouse-effect inducing lifestyles.

The idea behind these interlocking mechanisms is simple and seemingly attractive. Carbon production will be limited, and those who cut carbon consumption can profit by selling to those who are less ‘efficient‘. The ‘cap' can be lowered to gradually reduce carbon production. The green business or frugal cyclist will gain, while carbon guzzling wasters will lose out. It has a flexibility because consumers of carbon can chose to keep producing CO2 within limits, if they are prepared to pay more or decide themselves how to cut waste.

But the attraction of this approach as a way of reducing the threat of global warming is superficial. The Kyoto target of stablising CO2 and equivalent gases at 550 parts per million is too high. At this level, it causes a real danger of runaway climate change: as glaciers melt, the planet will reflect less heat, as darker rocky surfaces underneath the ice tend to absorb the suns rays and push up temperatures. Rising temperatures will lead to the thawing of permafrost, releasing huge quantities of methane; this will also increase the greenhouse effect.

At present companies in the European Union are being give carbon quotas which are both free and allow more CO2 emissions than are presently being produced. Even advocates of the market such as the Economist magazine recognise that this is nonsense.

The Durban group, a network of grassroots NGOs and social movements critical of the marketisation of CO2, suggest that the framework within which present policy works is both ineffective and biased toward the interests of elite groups.

Some carbon trading schemes are simply fraudulent. Others are based on dubious accounting. For example, if you fly, carbon is emitted today; but by planting a tree, carbon is absorbed over decades (and released if the tree dies).

There are no effective mechanisms for measuring emissions, policing the system and tackling fraud in emissions trading. There is little to prevent companies avoiding and evading the targets they have been set within a cap and trade system.

Some schemes involving taking land out of the hands of local people in developing countries who often practice a low carbon and ecologically sensitive lifestyle. For example, Chris Lang has produced evidence of abuse of local people for carbon offset in Uganda.

Another important consideration is the need to preserve rainforests and other habitats which act as carbon sinks. At present the 'clean development mechanism' in the Kyoto agreement allows forests to be degraded and replanted with fast growing energy crops. Palm oil use for biofuel looks likely to destroy virtually all of the rainforests of south east Asia.

Management by local people of vital ecosystems is vital; corporate exploitation for short term profit is immensely damaging. Yet such corporate control can be used as a form of carbon credit, traded to allow firms to produce more CO2. As a report for the World Rainforest Movement noted:

"The Plantar project in Minas Gerais, Brazil is the first carbon sink project seeking credit through the Kyoto Protocol's Clean Development Mechanism. It involves planting 23,100 ha of Eucalyptus plantations to produce wood for charcoal, which will then be used in pig iron production instead of coal... If approved as CDM project, Plantar will reap millions of dollars for bogus carbon credits, and industrialised countries will be allowed to meet their Kyoto reduction target using unsustainable plantations and climatically worthless credits... This is despite the numerous negative impacts associated with industrial tree plantations like Plantar's."

Malpractice aside, all of the forms of carbon trading allow the relatively prosperous to continue polluting while shifting the burden on to poorer citizens. The pensioner shivers while the rock star can afford to buy carbon credits to fly around the globe.

The market based approach fails to look at the need for structural change and ignores the political context necessary for meaningful action. Economic dogma is no substitute for political and structural change, change which is necessary to halt the growth of greenhouse gas emissions; and enabling us to do so without the poorest bearing the cost of a problem which has been created by those with the most wealth and power.

To genuinely tackle climate change will involve sacrifice. But creating cheap accessible public transport, renewable energy, and investment in local services, will allow citizens to realistically reduce their energy consumption with the least pain.

Further reading: the problems of carbon trading and the need for a political alternative are explored in detail in a title produced by Cornerhouse, which should be compulsory reading for all those who want to tackle climate change. It can be downloaded for free here:

http://www.thecornerhouse.org.uk/summary.shtml?x=544225