Seeing REDD on Climate Change

As climate change negotiations come to a close in Cancun, Birginia
Suarez-Pinlac is seeing red. The environmental lawyer from the
Philippines is worried that a plan for Reducing Emissions from
Deforestation and Degradation (REDD) constitutes a land grab,
transferring natural wealth from the poor to the rich under the auspices
of saving the planet.

Last year, she says, an Australian coal company tried to forge an
agreement with an indigenous tribe on Mindanao Island in the
Philippines, a poverty stricken area known for its high mountains and
lush green rainforest. "The company offered poor tribes people money in
exchange for their atmospheric space. They don't want to cut their own
emissions domestically. They want to find a way to profit from the
carbon they produce."

Forests help take climate changing carbon dioxide out of the
atmosphere, reducing global warming - a human induced process linked to
wild weather patterns including this year's deadly flooding in Pakistan
and crop destroying wild fires in Russia.

Green-washing

The world is losing about six million hectares of forests each year -
an area roughly the size of Greece - due to human activities like
logging. REDD is supposed to be designed to allow companies to buy clean
air credits from people who live in forests to encourage them to
protect the trees. But some environmentalists say that when companies
buy credits abroad through what is now a voluntary scheme, they feel
entitled to pollute back at home.

"The biggest buyers of REDD credits are the worst polluters - big oil
and big coal," says Bill Barclay, the research director for the
Rainforest Action Network in California. "They are looking for a cheap
'get out of jail free card' - it's basically green-washing."

In the Philippines, indigenous people "didn't understand that they
were giving away their atmospheric space to Australians" when they were
approached by a non-governmental organisation working with the coal
miners, Suarez-Pinlac says. But REDD and similar initiatives
based on trading credits in carbon dioxide are not just about companies
purchasing environmental legitimacy from communities who actually take
care of forests; the schemes being discussed in Cancun could increase
lucrative business opportunities for hedge fund traders and financers.

"There is a lot of concern REDD will be brought into a carbon offset trading scheme," Barclay says.

Carbon trading is based on the idea that a price should be placed on
emissions. Companies or countries would have a cap set on the amount of
pollution they could spew. Those who curtail their emissions below
targeted levels could sell atmospheric space to polluters who exceed
their limits.

The European Union has such legislation; the
27-nation bloc has pledged to reduce greenhouse gas emissions to 20 per
cent below 1990 levels by 2020. And carbon trading figures prominently
into this plan, as the EU is by far the world's largest carbon market.

And, while Europe has done far better than other industrialised
regions in reducing its emissions compared to the size of its economy,
some analysts think the moves are too little, too late.

"We still
aren't seeing key reductions that climate scientists say are
necessary," says Rachel Cleetus, an economist with the Union of
Concerned Scientists in the US.

'Carbon cowboys'

Environmental scientists estimate that the world needs to see
emissions cuts of at least 25 to 40 per cent below 1990 levels by 2020
and 80 to 90 per cent by 2050 to stop catastrophic climate change.

While Cleetus supports carbon trading as one of many policy tools for
tackling global warming, she says: "The carbon market only gets at one
market failure: the lack of a price on carbon. We need to get renewable
energy strategies in place."

Hedge fund brokers and the speculators Barclay calls "carbon cowboys"
believe the free market is the best tool for tackling climate change
and better than an extension of internationally mandated emissions
targets set out by the Kyoto Protocol which expires in 2012.

"The lack of a post-Kyoto agreement means that countries won't have
legal responsibilities to reduce emissions. They will have voluntary
ones," says Steven Sorrell, the deputy director of the Sussex energy
group in the UK, a university based think-tank.

The 2009 Copenhagen Accord, an attempt to extend the Kyoto Protocol,
does not include binding targets. However, rich countries responsible
for most greenhouse gas emissions pledged to create a fund worth $100bn
per year by 2020 to invest in clean technologies and to help mitigate
the effects of climate change in the global south.

Eric Bettelheim, an author and CEO of Forest Landscape Development, a
company that invests in products that "have a carbon and commodity
value" believes turning nature into a tradable resource is crucial for
protecting it.

"Everyone who is rational about this realises global warming will
probably never be solved without the participation of businesses and
markets," Bettelheim says. "Progress will be made on the recognition of
forest carbon credits from developing countries as being good currency
in the [carbon trading] system."

He accuses certain environmentalists and political leaders -
specifically Evo Morales, the Bolivian president - of having an
"anti-capitalist agenda".

Morales, whose country faces a major climate crisis resulting from
pollution it did not create, wants reparations from the rich
industrialised countries in the form of "climate debt".

Bettelheim's view on leaders like Morales is shared by politicians
with some of the worst environmental records. The US refused to ratify
the original agreement while Russia, Japan, Canada and Australia have
indicated that they will not sign onto a second commitment extending the
Kyoto Protocol past its 2012 expiration date.

Before becoming Canada's prime minister, Stephen Harper called Kyoto
"a socialist scheme to suck money out of wealth-producing nations".

'Two faced initiative'

But good capitalists, it seems, can even make a profit from a
"socialist scheme". About $64bn changed hands in the emissions trading
market in 2007, according to the World Bank.

Bettelheim wants environmental regulations for the same reason that
General Motors believes in stop signs and other rules for driving: he
says they are good for business - and for the environment. Like grain,
gold and oil, he hopes trading in carbon emissions will become a
fundamental activity in the global economy.

"With oil the question is scarcity, which creates a value people pay
for," he says. "In the case of greenhouse gas emissions, the problem is
surplus. How do you create a market from that? Legislation."

The commodities trader does not believe an extension of Kyoto is
feasible because of domestic political and economic concerns in the
countries which pollute the most. On this matter he may be right on the
money.

Regional carbon trading markets, similar to that practiced in the
European Union, are being developed in East Asia by Japan and Korea and
in the western US with California's state government taking the lead in
representing a "simpler way forward than having more than 190 countries
sign onto rules" as Kyoto attempted to do.

But that approach does not work for Suarez-Pinlac who believes carbon
or offset schemes including REDD are a "two faced initiative" from
major polluters in the developed world. Even if poor people in forests
are paid by polluting companies to protect the land, she wonders "how
the money [will] be managed when there is so much corruption?"

Even in Europe, which has stronger institutions than other regions,
carbon trading schemes have been hit by billion dollar scandals
involving corruption and speculative trading which does not take carbon
out of the air.

"Negotiators talk about 'safe guards' for REDD, but really these are
non-binding guidelines," says Barclay. "This has Interpol [the
international law enforcement agency] alarmed about the potential for
corruption."