LONDON - Plans to expand carbon markets at UN climate talks this December
could trigger a second ‘sub-prime' style financial collapse and fail to
protect the world from global warming catastrophe, a new report from
Friends of the Earth warns today (Thursday 5 November 2009).

‘A Dangerous Obsession' focuses on the buying and selling of a new
artificial commodity - the right to emit carbon dioxide - which the UK
and other developed country governments want to see expanded into a
massive worldwide market and are pushing in the negotiations running up
to the big Copenhagen climate talks in December.

The trade in carbon permits and credits, mainly based in Europe, was
worth $126 billion in 2008 and is predicted to balloon to $3.1 trillion
by 2020 if a global carbon market takes off.

But the majority of the trade is carried out not between polluting
industries and factories covered by carbon trading schemes, but by
banks and investors who profit from speculation on the carbon markets -
packaging carbon credits into increasingly complex financial products
similar to the ‘shadow finance' around sub-prime mortgages which
triggered the recent economic crash.

This risks the development of sub-prime carbon and the possibility
of an eventual collapse in confidence in the market, with catastrophic
consequences for the global economy and also for our prospects of
avoiding runaway climate change.

Friends of the Earth's report warns that the Government's obsession
with carbon trading as a solution to climate change is high risk,
irresponsible and dangerous. 

Existing carbon trading schemes are not delivering the emissions
cuts promised, and relying on this mechanism to reduce emissions
globally is gambling with the health of the planet and the future of
billions of people. 

Carbon trading is also being used as a smokescreen by rich countries
to avoid their legal and moral commitment to provide money and
technology to developing countries to grow cleanly and adapt to climate
change. The green campaign group is calling on the Government to use
simple, direct and proven policy tools like regulation, a carbon tax,
and major public investment in greening the economy to reduce our
emissions by at least 40 per cent by 2020, without offsetting.

Friends of the Earth's international climate campaigner and author of the report Sarah Jayne-Clifton said:

"Pushing a world carbon market as part of a global agreement to
tackle climate change risks a double whammy of financial and
environmental disaster.

"Carbon trading is failing dismally at reducing emissions, yet
allows speculators to grow rich from the climate crisis and hands
politicians and industry a get-out clause for polluting business as
usual.

"Science tells us rich countries must act first and fast to cut
their emissions at home if we are to avert climate catastrophe - and
support poorer countries with adequate public money to grow cleanly and
adapt to the effects of climate change which they are already
feeling.  

"The credit crunch has taught us that Governments, not markets are
best placed to safeguard our future - at this critical point in the
fight against climate change Ministers must step in and lead the way
with a new, direct approach to tackling carbon emissions to create a
safe and green future for us all."

Friends of the Earth is demanding that the
Government changes its approach to climate change with its Demand
Climate Change campaign. The green campaign group is asking everyone to
sign its international petition to world leaders for a strong and fair
climate dealat http://www.demandclimatechange.org/ .