[Deuda-QdQ] article on climate change and market mechanisms

Mar Dic 4 14:28:29 CET 2007

Paying the price

RONNIE HALL reports from the Bali summit on why market-based solutions
are not the answer to the problems of climate change.

GOVERNMENT negotiators jetting into Bali for this week's make-or-break
climate change summit should set aside their last-minute economic
briefings and carbon trade forecasts and look out of the window.

Hopefully, they will know enough about the mechanics of climate change
to be scared by what they see - serried ranks of sterile oil palms as
far as the eye can see.

Indonesia's once sprawling, untamed tropical forests, seething with life
and a key part of the planet's climate-regulating mechanism, are nearly
gone, siphoned off into the illegal timber trade or razed to make way
for exports of palm oil, which are used in a staggeringly wide range of
consumer products, from biscuits to biofuels. The latter, because the
forests have been ripped out, are also bad for the climate.

The carbon released by this wholesale destruction puts Indonesia right
up there with China and the US in terms of greenhouse gases emitted -
these countries are culprits numbers one, two and three, respectively.

Deforestation is responsible for a whopping one fifth of the world's
greenhouse gas emissions - more than that of the world's cars, ships and
planes combined.

Ten years after signing the Kyoto Protocol, governments could quite
literally be accused of fiddling while the earth burns. As this
thirteenth meeting of governments who have signed the United Nation's
framework convention on climate change (UNFCC) and its Kyoto Protocol
gets under way, governments are way behind on their emissions-reduction
commitments and showing little sign of making real, lasting and
effective commitments that could pull us back from the brink.

What governments do this month in Bali really, really matters. Even now
we will be extremely hard-pushed to keep temperature increases from
climbing more than 2 degrees C above pre-industrial levels.

This is the point at which severe environmental impacts are expected to
start kicking in. Critically, we have just 10 to 15 years to reverse
emissions before runaway climate change takes hold, with dying forests
and melting permafrost, for example, emitting ever more CO2, leading to
spiralling climate change. This is the time for definitive action.

For all of Gordon Brown's recent promises about a new industrial
revolution in Britain, with the British economy morphing into a vibrant
low-carbon economy and Britain's greenhouse gas emissions set to be down
to a not quite good enough 60 per cent by 2050, Britain isn't doing well
at present.

Not only is it not on schedule to meet this target, but it has also
actively lobbied against European renewable energy targets. Britain has
excellent renewable energy sources but we generate a paltry 2 per cent
of our energy from them. Why?

We need real action, now, not rhetoric.

In fact it is money - more specifically, the estimated costs of trying
to stop and also adapt to climate change and how capital markets might
be induced to fund all this - that has been at the heart of talks
leading up to Bali.

Indeed, it seems that whether governments are prepared to commit to any
further emissions reductions may depend upon the answer to this
particular question - who will pay for it?

Governments north and south, many transnational companies and a new
breed of "carbon traders" are all solidly behind the idea of using
carbon markets to get us out of what is, whichever way you look at it, a
very tight spot.

Carbon markets allocate pollution rights to greenhouse gas-emitting
industries, which then trade amongst themselves, with the aid of a few
brokers, of course.

In theory, this means that the cleanest, most efficient companies make a
tidy profit and dirty polluting industries can stick with business as
usual as long as they pay for emissions abatement somewhere else.

Somewhat too conveniently, carbon markets look like a financial win-win
option for almost all those people involved in making decisions this
week in Bali.

They could save governments in the north a tidy packet, since
over-consuming industrialised countries are already formally responsible
for their past carbon profligacy.

They could also, supposedly, generate income for countries in the south.
And they could create a new and fabulously rich seam of virtual carbon
for financiers, including the World Bank, to mine and trade without
getting their hands dirty.

There are some uncertainties - carbon traders may be reluctant to
include deforestation in existing markets right now, for example, in
case the current carbon price drops, but general interest in
market-oriented solutions is, to put it mildly, sky high.

Might there be a hidden catch, however? Well, yes, unfortunately there is.

The really inconvenient truth is that carbon "offsets" based on market
mechanisms are more likely to harm than help. They tend to discourage
efforts to cut emissions at source.

They also undermine investment in increased energy efficiency in
industrialised countries because companies can offset their emissions
more cheaply by investing in developing countries.

Some governments' proposals to include deforestation in carbon markets,
in order to help finance reduced deforestation rates, could also
discourage tropical forest-owning governments from taking quick, cheap
and effective action - by simply banning logging, for example.

It could also work against countries that have already made efforts to
protect or restore their forests.

As with all markets, the price of carbon can also change quickly and
swiftly. Unpredictable external factors mean that outcomes are typically
difficult to predict and control, as in any market.

The world's most significant carbon trading experiment to-date, the $25
billion (£12.2 billion) European emissions trading scheme, was too
lenient in allocating pollution rights to big business when it was set up.

The EU has now fallen behind schedule for meeting its Kyoto target of an
8 per cent reduction in carbon dioxide emissions by 2012 and the price
of carbon has plummeted, further reducing industry's incentives to
increase energy efficiency.

Other market-oriented schemes, such as voluntary offset schemes - the
kind that you might decide to participate in so that you can jet off on
holiday with a clear conscience - and projects funded by governments
under the Kyoto Protocol's clean development mechanism have also been
beset with problems.

They have resulted in a range of unsuitable and locally inappropriate
projects, including tree planting projects that have led to the
sometimes brutal evictions of forest-dependent communities from their
traditional territories on the basis that they pose a threat to forests.

Nothing could be further from the truth. Indigenous people living in
forests have the greatest knowledge about and the most interest in
caring for and keeping their forests standing and have every right to
stay on their lands.

This has now been formally recognised by the United Nations, although
many government negotiators don't seem to have noticed this fact yet.

Needless to say, the companies involved in all these projects have done
very well, thank you, and will no doubt be present in Bali to make sure
that the "carbon rush" continues.

My guess is that for them the "CCC" in UNFCCC stands for commercial
carbon contract, not climate change convention.

However, civil society organisations and indigenous peoples from around
the world are also here in Bali to call for real, lasting and effective
action. There are plenty of cheap, tried and tested solutions available,
we just have to be willing to pay for them.

*/Ronnie Hall is international campaigns co-ordinator for the Global
Forest Coalition./*

ON THE INTERNET: www.globalforestcoalition.org
<http://www.globalforestcoalition.org/> <
http://www.globalforestcoalition.org
<http://www.globalforestcoalition.org/>>

-- 
Ronnie Hall
Global Forest Coalition
48 East Street, Selsey, West Sussex
PO20 0BL, UK
Tel: +44 1243 602756
Mobile: +44 7967 017281
e-mail: ronnihall at googlemail.com <http://googlemail.com>

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