An inconvenient truth: Carbon trading won’t stop climate change

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Greenhouse gas emissions, primarily from the burning of fossil fuels, trap heat in the atmosphere and cause earth’s temperatures to rise. Even oil giant Exxon Mobil no longer denies that manmade pollution is causing rapid climate change, with potentially catastrophic consequences for all life on the planet.

Yet global capitalism, led by the U.S., is turning this ecological crisis into a profit-making opportunity. How? By creating a market to buy and sell permission to pollute with greenhouse gases!

This outrage traces back to 1997, when U.S. Vice President Al Gore made the world an offer it couldn’t refuse. Either include “carbon trading” in the plan to control climate pollution, he told the Kyoto Protocol convention, or the U.S. wouldn’t sign the treaty.

Convention delegates caved to Gore’s demand. Carbon trading was incorporated into the treaty’s framework, and soon became the world’s dominant prescription for curbing greenhouse gas emissions (GHGs). Since then, the European Union, U.S. states on both coasts, and other government entities have embraced various carbon trading schemes.

The problem is that trading in GHG emissions doesn’t reduce climate pollution, anymore than buying indulgences erases sin.

A green cover for business as usual.

The unstated goal of trading in GHG emissions is to create gaping loopholes for corporations so that they can continue to pollute as usual.

Programs called “cap and trade,” or “cap and auction,” or “cap and invest” share the same core feature. Companies trade in the “emissions market” for the right to spew greenhouse gases, carbon dioxide (CO2) being one of the major GHGs. Here is how it works:

  • A government entity – city, state, regional, national, international – establishes a ceiling, or “cap”, beyond which GHG emissions are not allowed. Over time, the ceiling on GHGs supposedly is lowered, and emissions reduced. In reality, climate pollution is not reduced; rather, since 1997 the presence of GHGs in earth’s atmosphere has climbed sharply.
  • The same government that sets caps then sells or auctions or gives “carbon permits” to polluting companies. These permits allow the company to go over the cap and pollute as if no limit exists. This is the contradiction at the heart of carbon trading. It creates the appearance of progress – and distracts from the strong measures that are needed to genuinely reduce GHG emissions.
  • Markets for “carbon trading” are also established, like the New York Stock Exchange. Companies can buy, sell or trade in privileges to pollute on this emissions market. Under this system, a mega-polluter need not reduce its GHGs. Rather than use money adopting anti-pollution technology, a company can buy “credits” on the market and continue to pollute at will.
  • Carbon colonialism in Uganda.

    Another giant loophole for polluters is to buy “offsets” from companies that are in the business of supposedly counteracting GHGs. Planting trees to absorb CO2 is one such method.

    This aspect of carbon trading opens up developing countries to a whole new form of colonialism. It also creates a new class of plunderers – carbon traders. Like traders in sub-prime mortgages and other esoteric financial instruments behind the current global financial meltdown, these pollution profiteers produce no real goods or services of value.

    The following real-life example is distilled from Larry Lohmann’s book, Carbon Trading A Critical Conversation on Climate Change, Privatisation and Power.

    Tree Farms was a Norwegian company that entered the increasingly lucrative business of carbon trading. The company helped polluters in Norway claim to reduce GHGs by selling “offsets.” Under this scheme, industry can pollute by funding projects that supposedly reduce GHGs elsewhere.

    How is this possible? For one example, tree plantations can be recognized by carbon trading schemes as “carbon sinks,” areas that can offset industrial pollution. Supposedly they absorb pollution, even if the emissions come from a factory on a different continent! Since faster growing trees absorb more GHGs they generate more offsets, or so the logic goes.

    To profit from carbon trading, Tree Farms purchased super-cheap, long-term leases for land from Uganda’s government. From 10,000 acres of Uganda’s Bukaleba Reserve region, Tree Farms hoped to farm and sell “offsets” to polluters in Norway for the right to spew 2 million tons of CO2.

    To maximize profits in the shortest time possible, Tree Farms planted eucalyptus and fast-growing pines, on land occupied by farmers and fisher folk. Local farmers were then forced to pay Tree Farms for the right to grow crops alongside plantation trees.

    Ultimately, Tree Farms was stopped on this project. But this pattern of exploitation and bogus carbon credits is common.

    Other companies are setting up plantations where land can be obtained cheaply, especially in less developed countries, primarily in Africa, Latin America, and Asia.

    Schemes such as the plantation set up by Tree Farms displace local peoples, deny native populations access to their own land, disrupt local economies, and destroy natural ecosystems that plants and animals depend upon.

    Also, the methods these projects use for calculating “offsets” to GHGs are unverifiable and falsely optimistic.

    While big business and politicians play this smoke-and-mirrors game, precious time for real action is running out.

    Many scientists fear the earth has already reached its “tipping point,” a stage of runaway, catastrophic climate change.

    In Canada, ecologists report that vast forests now release more carbon dioxide than they formerly absorbed. This is due to fires and disease caused by warming trends. Similarly, studies show that ice shelves are melting at rates much faster than predicted.

    The planet vs. profits.

    Advocates of carbon trading promote the fiction that big business will regulate itself through the “free market.” In reality, even the Wall Street Journal calls carbon trading a “charade” that would only “make money for some very large corporations.”

    The radical measures required to truly tackle climate change mean confronting capitalism and its ideology that big business has the sanctified right to pollute and render the planet uninhabitable.

    What is needed now is economic planning and international cooperation, combined with concrete action. Some measures include:

  • Steep caps to rapidly lower greenhouse gas emissions, with no escape for polluters.
  • Heavy corporate carbon taxes to fund profound restructuring of the energy infrastructure and economy.
  • Strong conservation measures coupled with a crash program to research and develop genuinely renewable energy like wind and solar power.
  • Expansion of rapid mass transit to reduce auto fumes.
  • Rain forest preservation and enforcement of indigenous land rights.
  • Duff Badgley is a founder of One Earth Climate Action Group, based in Seattle. Linda Averill is an activist in Amalgamated Transit Union 587.

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