Carbon Trading Nonsense

History has seen attempts to commodify land, food, labor, forests, water, genes and ideas...carbon trading follows in the footsteps of this history and turns the earth's carbon cycling capacity into property to be bought and sold in a global market. Through this process of creating a new commodity, carbon, the earth's ability and capacity to support a climate conducive to life and human societies is now passing into the same corporate hands that are destroying the climate.
--from the Durban Declaration on Climate Justice

For those paying attention to the unfolding disaster of climate change, last year ended with a hideous thud. The Copenhagen debacle which resulted in a largely meaningless "accord", left many climate activists shattered and desperately in need of a stiff drink on New Years Eve. For others, however, spirits remain high as the politics of climate disaster represent profitable new opportunities.

Many of these people, representing some of the most powerful institutions and industries in the world, will get together this week to see just how (and how much) they can squeeze out of the Earth's impending woes. On January 12th and 13th - within the conference rooms of the Embassy Suites Hotel in New York City - the Second Annual Carbon Summit will convene, bringing together representatives from industry, finance, government, and the corporate environmental groups.

Inside the summit, these monied interests will be enthusiastically discussing how to best take advantage of the emerging carbon markets. Marketing carbon involves cap and trade and/or offsets. Under a 'cap and trade' system, (like the one in the House climate bill and the pending Senate version), polluters are required to cap emissions at a certain level, declining over time. Permits to pollute are then proferred (handed out for free or auctioned) to the carbon-emitting industries. This scheme enables a company that cannot easily reduce emissions in accordance with the level of the cap, to instead buy (or "Trade") the excess permits from another company that can comply with the cap.

When permits are unavailable or too pricey, industries can instead pay someone else somewhere else - so the theory goes - to lower emissions on their behalf; these are the "Offsets". In reality, and despite whatever good intentions, offsets do not reduce emissions. At best they simply move emissions from one place to another. Often they provide support for destructive practices like palm oil plantations and provide a smokescreen for ongoing pollution.

Unfortunately, theory and practice in carbon markets simply do not jive. We have plenty of evidence that marketing carbon doesn't work to reduce emissions. Worse yet, it impedes real solutions. And perhaps worst of all, it leads to the commodification of things like pollution rights, forests, soils, agriculture, biodiversity and water resources. It puts a "market price" on those things that should belong to the "global commons". It turns our most vital resources into nothing more than the property of wealthy, polluting multi-national corporations.

A Proven Failure | Green Allies

The EU experiment with a carbon trade system has been soundly declared a failure. Over-allocation of permits, free permit giveaways, overblown estimates of baseline emissions, cheating, and the passing of permit costs to ratepayers have all contributed to the failure. According to a Citigroup report, it failed to reduce emissions and resulted in huge profits to polluters at the expense of consumers.

The Kyoto Protocol similarly relies on carbon trading through the Clean Development Mechanism. That hasn't worked either. Since Kyoto came into effect, between 2000 and 2005, emissions have not gone down, but rather increased by about 3.2%. Many countries have utterly failed to fulfill their obligations. Analysis of the projects funded through CDM reveals that the majority - around 60% - were projects such as large hydroelectric dams (many in China) that had already begun construction or were even completed prior to receiving CDM support. In other words, nothing was gained and no emissions were reduced, just more business as usual.

For financiers, the prospects of a trillion dollar market to manage, broker and manipulate is positively titillating. Goldman Sachs will be present at the summit, eager to have their foot in the carbon game when things get moving. Already facing a congressional inquiry for their role in the dubious sport of derivative trading and credit default swaps, they will not be denied their place at the carbon-trading trough. Coincidentally, Goldman's offices are across the street from the Embassy Suites in Manhattan. It is also interesting to note that the main venue for carbon trading in the US - the Chicago Climate Exchange - is the brainchild of the same person, Richard Sandor (also slated for appearance at this event), who was instrumental in devising the whole concept of hedge funds and market speculation. The potential $3 trillion market in carbon could provide a huge new opportunity for exactly the kind of market gaming that brought us the recent financial collapse. (If you think a housing bubble is bad, just wait until these players start gambling on things that don't even have a home address, for example: top soil that doesn't get turned, trees that are not cut down, or carbon molecules).

The drumbeat for cap and trade has been carried forward with the aquiescence of some of the mainstream corporate "environmental" groups. These "big greens" - like the Environmental Defense Fund and the NRDC - have adopted a modus operandi whose focus is to ensure that the business community is happy and cooperative. Whether or not the policies they advocate actually do the job in terms of protecting the environment is secondary. And their payrolls reflect that cozy relationship with polluters. Unfortunately, ordinary Americans assume that these groups are actually representing the interests of the environmentalists, and the sheer size of these groups enables them to have a dominant voice on environmental policy in Washington. USCAP, a partnership between EDF, NRDC and some of the world's worst polluters, laid out the architecture, based on carbon trade, that was the framework for the US climate bill now going through process.

Beyond Market Solutions | Climate Justice

Outside of the carbon trade summit this week, leading climate scientist, James Hansen will discuss his perspective his perspective that the physical processes driving the climate toward irreversible tipping points of runaway warming simply do not allow humanity enough time to waste on failed policies. He will be presenting an "open letter" to the chairperson of the conference that argues for true solutions rather than the disastrous distraction embodied in carbon trading. Ultimately, he suggests, that the US climate bill, because of its reliance on cap and trade, would be "worse for the environment than doing nothing".

A growing cadre of people who study the issues are calling for a carbon tax and dividend as a better approach, a position supported by the Office of Management and Budget (OMB) and even many in the business community. But figuring out how to best "price carbon" is only a piece of what needs to happen. Outside the carbon trade summit, alongside Dr. Hansen, will be Father Paul Mayer, cofounder of the Climate Crisis Coalition, and an outspoken leader of the religious community who also strongly opposes carbon trade on the grounds that it won't work and is unjust.

The issue of justice is central to the opposition to carbon markets. Protestors on the streets in Copenhagen called for "climate justice now" and "system change not climate change". With the gross inequities that leave billions starving in dire poverty, while a small portion of humanity gobbles resources and spews greenhouse gases, it seems unlikely that marketing carbon will resolve the problems. The power structures that have created those inequities, and made such a mess of our planet must be challenged if we are to have a chance at a liveable future. We will have to address the roots of the problem.

This commodification of the commons lies at the heart of opposition to carbon trade. If we allow our forests, farms, livelihoods, and the Earth's rich biodiversity to be sucked into a "carbon market" we turn over our most precious wealth - that which literally sustains life - to polluters, financiers, and speculators. Marketing carbon will only make inequities worse, and perpetuate the damage already done by a system that values consumption over sanity and greed over equality.

A Positive Failure | Next Step

The failure of "world leaders" in Copenhagen last month had one unexpected, yet grand, consequence. It made clear, with stark revelation, that those so-called leaders who gathered in the halls were not yet ready to admit what has become so strikingly clear to those brave climate activists who came together outside: We cannot spend, or consume, or manipulate our way out of this mess; We must take account of our behavior and make the radical shifts that the problem demands. As you will see exhibited again this week in New York, there is increasingly more wisdom, knowledge, and maturity outside on the cold streets than exhibited in the warm conference rooms of the world.

Agreement or no agreement, climate bill or no climate bill, nothing will change for the better until we move beyond market fundamentalism. We must accept that we will have to consume much less, pay our ecological debt, respect the developing world, redefine our power structures, our relationships to nature and with one another. Let's get over this carbon trade nonsense and get on with it!

To learn more about these issues you can visit the Climate Crisis Coalition, Climate SOS, or the Carbon Tax Center.
You can learn more about protests and actions at the Carbon Summit in New York, here.