Hoodwinked in the Hothouse

The G8, Climate Change and Free-market Environmentalism
09 မေလ 2007

What we call Man's [sic] power over Nature turns out to be a power exercised by some men over other men with nature as its instrument - C.S. Lewis, British author and scholar (1898-1963)

The new briefing from Carbon Trade Watch examines the relationship between free-market economic forces and climate change policy while scrutinising the rhetoric and reality behind promises on climate made by the most powerful politicians in the world - the G8. It also explores the origins of free-market environmentalism and analyses the conflicts and synergies that arise when the worlds of trade and environment collide. >Download PDF

  1. Introduction
  2. The G8 and the Climate Change Agenda
    • The Climate Change Agenda in 2005
    • Blair's Domestic Record on Climate Change
  3. Fiddling while Rome Burns. The Politics of Kyoto
    • Russian Ratification and Hot Air
    • The Question of the US
    • Life after Kyoto
    • The Nuclear Option?
  4. "Developing" the Majority World. The G8, Climate Change and International Financial Institutions
    • The G8 and Export Credit Agencies
    • Subsidising the Climate Crisis
    • The IMF
    • The World Bank
    • Regional Banks
  5. Costing the Earth. The Price of "Pricing Nature"
    • Dubious Origins. The Legacy of Malthus
    • Paradigms Lost. The Greening of Neoliberalism
    • Global Restructuring. The "Double Revolution"
    • Of Maths and Markets. Cost-benefit Analysis
    • A Question of Tactics
  6. When Worlds Collide. Trade and Environment
    • The Right Climate for Investment
    • Are You Being Served? The Potential Impact of GATS
    • The Feeling's Mutual. Climate and Commerce
    • Free-market Environmentalism Gains New Ground
    • Mercury Trading
    • Oil Pollution Trading
    • Wetlands Banking
    • Landfill Trading
  • Conclusion
  • Glossary
  • Footnotes
  • Country Profiles
    • The European Union
    • France
    • Italy
    • Britain
    • Canada
    • Japan
    • Russia
    • USA
    • Germany


    Climate change has, of late, been receiving more media attention than ever before. This is partially a result of the coming into force of the Kyoto Protocol despite US and Australian government intransigence, as well as UK Prime Minister Tony Blair’s championing of the issue while serving as chair of the 2005 meeting of the G8 in Scotland. In parallel to these political processes, the world is slowly waking up to the magnitude of the threat posed by climate change as the world’s leading scientists warn of the dangers of complacency. Concerns over climate change impacts such as droughts, floods, rising sea-levels, food insecurity, loss of biodiversity and depleted fresh water supplies have created a broad social consensus that climate change is one of the single greatest threats humankind faces. According to the World Health Organisation, climate change is already responsible for some 160,000 deaths annually.

    The science is clear. A study by the International Climate Change Taskforce found that with any increase above two degrees in global mean temperature, "the risks to human societies and ecosystems grow significantly", with an increased possibility of "abrupt, accelerated, or runaway climate change". According to the high-level group -co-chaired by British Labour MP Stephen Byers and US Republican Senator Olympia Snowe - this scenario could be avoided by keeping the concentration of carbon dioxide in the atmosphere below 400 parts per million (ppm). However they warn that current concentrations of 379 ppm "are likely to rise above 400 ppm in coming decades and could rise far higher under a business-as-usual scenario".

    This briefing examines how despite the urgent need for action, the G8 nations are locked into this "business-as-usual" scenario through their perpetuation and reinforcement of the kind of fossil-fuelled economic expansion that has given rise to climate change in the first place. As the grouping of nations most responsible for the majority of historic greenhouse gas emissions, as well as simultaneously being the most powerful industrialised nations, the G8 is a logical frame of reference from which to analyse the political economy of climate change.

    However this focus is somewhat arbitrary. Firstly, the nature of economic globalisation demands a more complex reading of the relationship between nation-states and transnational corporations. These corporations are in no way restricted to the G8 countries, either in economic and industrial activity or in terms of influence over national and international policy. Secondly, the G8 is only one particular grouping of rich nations, and although arguably the most powerful and influential, it is not unique. Institutions such as the World Economic Forum (WEF) and the Organisation for Economic Co-operation and Development (OECD) also exist to foster political and economic consensus amongst richer nations, and thus also have an impact on climate change through their mutual reinforcement of neoliberal economic policies and frameworks. The focus on the G8 countries in this briefing is intended to serve as a useful window into the interaction of neoliberal policy and climate change rather than telling the whole story.

    Offsetting Responsibility

    In an effort to demonstrate its green credentials, the British Government has been proudly boasting that its G8 presidency will be "carbon neutral". It promises to achieve this by "offsetting" the anticipated greenhouse gas emissions resulting from the summit by investing approximately $90,000 in supposedly climate-friendly projects in Africa. In many ways, the attempt to make the summit "carbon neutral" is emblematic of the degree to which the climate debate has been corrupted by a corrosive discourse. As a result, this offset culture has emerged as one of the principle concepts of "action" on climate change. But offsets are deeply problematic and not, in the final analysis, a solution to the crisis.

    Firstly, the money being invested elsewhere invariably distracts from action to reduce emissions at source. Northern governments and industry are taking advantage of such offsetting arrangements to postpone making the desperately needed cuts at home. Secondly, it is difficult, if not impossible, to guarantee that offset projects lead to genuinely "additional" reductions. There simply is no guarantee that the supposed emission savings from a project would not have happened anyway without the offsetting investment. Thirdly, the scientific basis upon which carbon calculations of such projects are made is hotly contested. The carbon estimates vary hugely and rely upon accounting methodologies so flawed as to make the Enron-Andersen dealings seem mild in comparison. Many projects have delivered significantly lower emission reductions than predicted in their project documents.

    A project category particularly prone to such overestimations is tree-planting, where verification of the amount of carbon actually stored in the forest ecosystem or tree plantation is virtually impossible. In some cases companies have received payments just to avoid felling existing forests. Monoculture trees have also been planted on carbon-rich peat bogs - emitting more carbon dioxide than they "sink". The worst examples have involved projects replacing grassland ecosystems with ecologically and socially destructive monoculture plantations - described as "green deserts" by local people - in places such as Ecuador and Brazil.

    Cracks in the logic of these schemes emerge when attempts are made to establish a solid equivalence between the emissions one source makes with those theoretically avoided or sequestered in trees somewhere else. One side of the equation, the emissions that one is responsible for, is comparatively definite and quantifiable. The other side, the emissions saving project, is marred in both uncertainty with regards to the long-term progress of the project (for instance, if the carbon from the emissions is to be sequestered in trees, how long will these trees still be standing and storing the carbon?) and also with regards to limited scientific knowledge of the carbon cycle. According to leading scientists, calculating these carbon fluxes involves, at best, variations in the estimates of 50% or more. But for the G8 nations seeking to demonstrate vague commitment to climate action, the inherent problems relating to offset culture and other distractions such as emissions trading are swept aside by a sleight of hand. The market, we are told, is lean and green. The problem of climate change requires not radical reductions at source, but the "invisible hand" of the market to sweep up the mess in the most cost effective manner possible. Part economics and part philosophy, this reliance upon the market represents an increasingly prevalent paradigm in environmental legislation.

    This briefing will examine the origins of this paradigm and its development in the context of climate change, as well as the way it is being enthusiastically applied as a panacea in other areas of environmental policy as well. It argues that the "win-win" rhetoric pervading the climate discourse is both an attempt to confound and marginalise those seeking more meaningful and effective action on climate change, as well as contributing to increased corporate power and further commodification of natural resources such as the earth's carbon-cycling capacity. The neoliberal ethic embodied in power blocs such as the G8, themselves highly dependent on the fossil fuel economy, is ultimately what drives this agenda forward. Free-market environmentalism and increased trade and investment liberalisation in the area of "environmental goods" and "ecosystem services" is ultimately a false promise. For activists seeking to engender meaningful social and environmental change in the climate arena, these trends must be challenged outright.

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