Andreas Späth

Selling the atmosphere

2010-04-21 08:05

In Berlin you can buy cans filled with nothing but air, which, according to a popular old song, has a particularly appealing aroma in the German capital. It’s just a funny gimmick, a silly souvenir for your kids who’ve already got T-shirts from every other city you’ve ever visited. It’s not nearly as silly though as the fact that buying and selling air, or more accurately the right to pollute it, is actually a multi-million dollar international business these days.

Since the signing of the Kyoto Protocol, carbon trading has become a dominant mechanism to supposedly halt the effects of global climate change by reducing the amount of greenhouse gases we pump into the atmosphere. But it’s not working. While carbon markets may present another lucrative profit opportunity for some of the planet’s worst polluters, CO2 emission continue to grow by some three percent every year.

In a world where everything has a price, carbon trading represents one of the final frontiers in the privatisation of things that used to be free, even the air that we breathe. It’s the continuation of a process that US scholar Michael Parenti has in mind when he says that “the essence of capitalism is to turn nature into commodities and commodities into capital”.

Here’s how carbon trading is supposed to work. Kyoto signatories who have agreed to reduce their carbon emissions – most industrialised countries with the notable exception of the USA – are given permits to pollute the air with greenhouse gasses up to the level they’ve offered to cut back to. Individual countries then allocate these permits, also called carbon credits, to polluting companies. Polluters who emit less than their allocated share can sell their unused carbon credits while those who emit more need to buy extra ones.

Companies can also earn carbon credits by investing in emission reduction schemes in other countries. In addition, organisations and individuals who want to reduce their carbon footprint – anyone from Bono and Coldplay to yourself – can acquire a “carbon neutral” lifestyle by “offsetting” their dirty fossil fuel habits against bought carbon credits.

So what’s wrong with carbon trading?

- Many supposedly emission-saving projects in the developing world have questionable credentials and some even have adverse effects on local communities and environments. Examples include controversial proposals to capture methane at Durban and Cape Town landfills and Sasol’s attempt to garner carbon credits for a gas pipeline from Mozambique. Others involve monoculture tree plantations which have a very uncertain capacity to absorb CO2, but threaten local biodiversity, aquifers, stream, arable land and existing old-growth forests.

- While there have been major investments in carbon markets, they remain poorly monitored, relying largely on industry self-regulation and leaving them open to abuse and manipulation. It’s not uncommon for the same people to act as carbon accountants, consultants and verifiers to the same polluting company, resulting in potential conflicts of interest and fraud.

- The World Bank has been both a major player in promoting carbon trading, for example through its Prototype Carbon Fund, and a provider of huge amounts of funding for fossil fuel projects, such as the recent loan to Eskom, which will lead to massive new CO2 emissions.

- Critics charge that emission trading turns the developing world into a cheap carbon dump for industrialised countries, by rewarding the world’s biggest historic carbon emitters with legalised pollution rights to the atmosphere.

- Carbon markets such as the EU’s European Emissions Trading Scheme, have experienced instability and price fluctuations, partly because of an over-allocation of pollution rights as, in the words of Durban-based academic Patrick Bond, “fictional supply of credits soared above fictional demand”.

Carbon credits are modern-day indulgences sold by the church of the free market to absolve us for our greenhouse sins by shifting the burden from rich polluters to the underdeveloped poor without guaranteeing any actual reductions in emissions or changing the polluters’ behaviour. Real reductions in CO2 emissions are achieved by effective legislation which makes polluters pay, improved energy efficiency and investment in cleaner, renewable sources of energy. Let’s concentrate on these, rather than on dubious pie-in-the-sky accounting boondoggles that are as empty as cans of “Berliner Luft”.

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