Climate Scams Won't Save the Planet

Whether
you listen to NPR or Rush Limbaugh, you've probably heard about climate
change. And if you've heard about climate change, chances are you've
also heard about "cap and trade." It's a scheme that tries to sell
business-as-usual as a solution to global warming.

Here's
how it works. The government puts a limit on how much greenhouse gas
can be released in a year (the cap), and industries covered by the
system are issued an equivalent number of emissions permits. As the cap
is tightened each year, permits become scarcer and thus more valuable.
The increasing value of the permits is supposed to encourage dirty
industries to clean up their act fast, and sell their spare permits to
the dinosaurs that didn't innovate. That's the trade.

The
theory behind cap and trade is that the planet doesn't care where you
reduce emissions, as long as you stay under the cap. And by trading
permits, you maximize efficiency and make it profitable for
corporations to shrink their carbon footprints.

Everybody wins, right? Wrong. A new short film, The Story of Cap & Trade, released by the Story of Stuff and Free Range Video (www.storyofcapandtrade.org)
explains why the real of story of cap and trade is that it's easy to
scam, riddled with loopholes, and a dangerous distraction from the real
change needed to protect people and the planet.

First
of all, cap and trade programs are easy to cheat. In Europe, where
carbon trading has been under way since 2005, energy corporations were
asked how many permits they needed and were given that amount for free.
But they made out like bandits when they still raised consumer prices
as if they had paid top dollar. The result: more than $30 billion in
windfall profits. And to add insult to injury, emissions didn't decline
because corporations had overestimated how many permits they needed.
Under the U.S. cap and trade law snaking its way through Congress, 85
percent of the carbon credits would be given away to polluting
industries for free.

Here's
the second problem. Cap and trade includes offsets--a kind of carbon
trading that allows polluters to finance projects outside the cap that
purport to cut emissions, and then claim the cuts for their own. Even
in theory, offsets don't lower emissions--they simply move reductions
from one place to another. In reality, offsets are rarely
"additional"--meaning that the cleaner projects were going to happen
anyway. But because the offset creates carbon credits, the company that
provided finance has permits to keep polluting at home. Even if the
atmosphere doesn't care where pollution comes from, the people who live
next to the power plants and factories do.

Unfortunately,
many offsets are just scams. Consider the case of Sinar Mas. This pulp
and paper company cut down native forest in Indonesia, causing major
devastation, and then planted palm oil trees on the wasteland it had
created. Guess what it got for that? Offset credits for reforesting.
This company destroys an entire forest ecosystem, installs a
monoculture industrial plantation, and can still turn a profit from
selling the trees cut down, the palm oil produced in their place, and
carbon credits. As a result, a company somewhere else can continue to
pollute. It doesn't make any sense.

Third,
carbon trading creates a new derivatives market in carbon credits
that's ripe for speculation. Remember the mortgage crisis, where bad
loans were bundled and resold ad nauseum? Now imagine the
investment banks that brought us the financial crisis gambling on
carbon derivatives--and toxic carbon credits backed by nothing but hot
air--creating a carbon bubble. This time when the bubble bursts, we
could lose more than our houses. Our planet's ability to sustain life
as we know it is at stake.

Above
all, cap and trade is a dangerous distraction from what we must do to
avert climate chaos. That includes shifting public support from fossil
fuels to wind, solar, and other renewable energy alternatives,
rebuilding our economy around new jobs in clean industries and energy
efficiency improvements, and promoting policies that reward real
innovators, not dirty industries.