PERPETUATING BAD PRACTICES

Avoiding change

Emissions trading tends to protect very polluting or dirty industries by allowing them to buy emission rights rather than meet environmental standards. In this way, trading can reduce the pressure on polluting com­panies to change production processes and introduce other measures to reduce their emissions.

The fossil fuel-dependent companies which want to continue expanding their businesses are the very ones that are promoting emis­sions trading in the knowledge that it will enable them to continue to expand. An official at the US Department of Energy noted that 'tree­planting will allow US energy policy to go on with business as usual out to 2015' (Lohmann 1999).

Similarly, CDM projects favour plantations and other cheap methods of reducing carbon emissions, like landfill gas capture, rather than renewable energy projects, in developing countries. One of the easiest ways to earn carbon reduction credits is to pump methane out of a waste dump. Such projects provide 'a proven technological fix, easy-to-crunch mission numbers, and prospects for rapid progress' and so are more attractive to investors than reforestation or renewable energy projects (Hawn 2005a). '[T]raditional energy efficiency or fuel switching projects, which were initially expected to represent the bulk of the CDM, account for less than 5%' (IETA 2005: 3). This is because renewable energy is more expensive for investors, even though it offers more benefits to the local community and the nation. This has caused CDM to be referred to as the 'Cheap Development Mechanism' (CDM Watch 2005: 15-6).

‘Carbon neutral'

The idea that people can negate their contribution to global warming (that is, be carbon neutral) by paying for trees to be planted is a way of taking the guilt out of excessive and mindless consumerism and allowing consumerism to continue.

Similarly, by using carbon offsets, 'a utility company releasing a million tonnes of carbon a year... can be just as quot;carbon-neutralquot; as a subsistence farming household emitting one tonne a year' (Lohmann 2001: 11). The idea of carbon neutrality thus allows the very activities that contribute to global warming to continue unabated while promoting tree plantations that very often are not environmentally beneficial (see below).

It is also a way for corporations to green their image without making any real changes. London's famous black cabs are going 'carbon neutral' in an effort to forestall likely restrictions on polluting vehicles in the central London area. The black cabs are run on diesel, which is particu­larly polluting - but by the business contributing funds towards forestry projects in the United Kingdom and Germany, solar projects in Sri Lanka and a small hydro power plant in Bulgaria, they can be labelled 'carbon neutral' (McCallin 2005). Various firms are also offering their customers the opportunity to be 'carbon neutral' in some of their purchases (Biello 2005).

Promoting dubious technologies

Various technologies of contested environmental benefit are being pro­moted as eligible for credits in the JI and CDM schemes. For example, Monsanto has argued that farmers who plant crops that are genetically engineered by Monsanto to be resistant to its herbicide Roundup will be able to reduce or even avoid ploughing their land - which will ensure that more carbon is stored in the soil. Even aluminium producers are claiming that the use of aluminium in cars should earn credits because making cars lighter reduces the amount of fuel they use, thereby reducing the amount of carbon dioxide the cars produce.

The CDM also acts as an effective subsidy for the nuclear industry by rewarding it with carbon credits despite the known hazards associated with operating nuclear plants and storing nuclear waste. The CDM is providing an incentive for the construction of nuclear power plants in developing nations, particularly China. It is estimated that carbon credits could reduce the construction costs of such plants by 10-40 per cent (CEO 2000: 17).

Companies have even worked out a way to count logging as an emis­sions reduction:

New England Electric Systems, a coal-burning utility holding company, has paid the Malaysian Innoprise Corporation (which manages the commercial exploitation of a 972,000 hectare timber concession) to carry out 'reduced-impact' logging in part of its con­cession. The logic to this is perverse and absurd - New England Electric can earn credits from logging if 'it causes less deforestation than would otherwise have occurred'. The Malaysian Innoprise Corporation can make money both by logging and then by replanting. (CEO 2000: 15)

One of the carbon offset projects in Minas Gerais, Brazil, involves a 23000 hectare eucalypt plantation owned by Plantar which will be used to produce charcoal for pig-iron production. Plantar argues that it deserves carbon credits for this project because without them charcoal would be uneconomical as an energy source and it would have to use imported coal, which would result in higher CO2 emissions. Not only has the project taken up land that is needed by thousands of landless people in the state but it has perpetuated an industry - charcoal making - which is 'one of the most hazardous and poorly paid in the region' (Kill amp; Pearson 2003: 5).

What is more, the claim that without the credits the project would not have gone ahead because charcoal production is uneconomical is belied by the fact that another pig-iron production facility has recently been established in Brazil that will use charcoal despite not having credits to subsidise it.

Plantations

The idea behind carbon sinks comes from recognition of the vital role that forests play in 'regulating the earth's temperature and weather pat­terns by storing large quantities of carbon and water' (SinksWatch 2006). However, rather than conserve existing forests and prevent deforesta­tion, market mechanisms focus attention on creating carbon sinks by planting trees.

Forests are much better at storing carbon than plantations: 'Plantations in the tropics for example store 20-50% less carbon in above­ground biomass than do primary forests in the same climatic zone' (Kill amp; Pearson 2001: 5). It can take 250 years for secondary growth in a forest to store as much carbon as the original forest. The loss of forests in coun­tries that are not signatories to the Kyoto Protocol is not taken into con­sideration, so while net carbon sinks are in fact declining, the increase in one minor form of carbon sink (plantations) is allowed to justify increases in greenhouse gases in developed countries.

In contrast to forests, plantations can create 'green deserts' because they are so water intensive. Generally plantations are made up of a single species, such as a eucalypt or a pine, that grows quickly, has high fibre yields and can be easily logged. The plantations suck up all the water in an area, leaving surrounding wells dry and the land around desiccated and unable to support crops. A report funded by the UK Forestry Research Programme found that plantations often lower the water-table, draw water from the soil and drain rivers (Pearce 2005b).

Another study found that when agricultural lands in India were con­verted to forests there was a 16-26 per cent reduction in water yields, partly because of the increased evaporation of water from the leaves of the trees (Nicholls 2005).

This focus on planting trees ignores all the other functions provided by forests composed of diverse and numerous plant species, assuming that they can be replaced by a plantation of trees of the same species. The trees are planted in rows of the same age and require heavy use of agri­chemicals, including fertilisers and herbicides, that pollute remaining waterways. Such plantations reduce soil fertility, increase erosion and compaction of the soil, and increase the risk of fire. In addition, they can lead to a loss of local biodiversity because they are monocultures of non­native species and because their densely packed, uniform rows do not provide the variations of form and structure found in a forest (Kill amp; Pearson 2003: 3; Lohmann 1999).

While plantations are being created, natural forests are being destroyed worldwide as a result of 'inequality of land ownership, the lack of recognition of forest peoples' rights, unsustainable consumption levels of forest products in the North, the inequality in the world trading system, and the dominance of timber values in forest use' (Kill 2001: 15). If these underlying causes of deforestation are not addressed, preventing deforestation in one place may just lead to deforestation in another place.

Where agricultural activities are displaced by plantations, forests may be cleared elsewhere to grow the food that would have been grown on the land now occupied by plantations. Not only that - if carbon-cred­ited forest protection projects cause the price of wood to rise, this will increase 'pressures for logging outside project boundaries' (Kill 2001: 12; Lohmann 1999).

Business as usual

The World Bank is a central player in the market for carbon offsets, man­aging carbon funds for individual countries as well as the Prototype Carbon Fund (PCF), the BioCarbon Fund and the Community Development Carbon Fund.

The Bank, however, is only one example. Globally, North-South flows of investment and governmental support through ECAs [export credit agencies] and international financial institutions favour fossil fuels, financing and entrenching them in developing country energy systems to a degree that makes the new financial flows achieved by the emerging carbon market largely irrelevant. (Lohmann 2004: 30)

Similarly, most developed nations' governments provide subsidies to the fossil fuel industry while paying lip-service to greenhouse gas emission targets. The annual global subsidies to fossil fuels between 1992 and 2002 were around $200 billion (Lohmann 2004: 30).

The companies contributing to CDM and JI projects have received hundreds of times more funding from the World Bank for fossil fuel proj­ects during the same period, investing in these carbon funds in order to receive carbon offsets in countries where they are adding far more carbon to the atmosphere through World Bank-financed fossil fuel proj­ects. And worse, while they get credits for the carbon-offset projects they get no debit for the carbon-adding fossil fuel projects.

Mitsubishi, for example, has four projects in Brazil which will earn it some 13 million carbon credits over 21 years. It is also investing in an oil­field project in the same country which will emit around 58 times the amount of carbon supposedly reduced by the four carbon credit projects. BP has invested $5 million in the PCF up to 2004 and received almost $1 billion from the World Bank over a decade to 2002 for fossil fuel proj­ects. One of these projects, which is still funded by the Bank, is to open the Azerbaijan oilfields to supply oil to the USA and Western Europe (CDM Watch 2005: 7-8).

I have been unable to find examples of pollution trading schemes that have been unarguably good for the environment, although many have been good for industry in terms of money saved. The example that is most cited in the literature is the US acid rain scheme. However, although it has undoubtedly resulted in the reduction of SO2 emissions, it has not performed as well as equivalent European legislative schemes and has created localised pollution problems.