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Profiting from pollution: an introduction to carbon trading

by PhilLee — last modified Dec 07, 2011 06:00 AM

Today at the C17 civil society space a panel of speakers talked about the various carbon trading initiatives to have emerged from the Kyoto Protocol and the impacts they are having in the real world.

First to speak was Oscar Reyes, from Friends of the Earth England Wales and Northern Ireland on the Clean Development Mechanism (CDM).


The CDM came out of the Kyoto Protocol. In short, it allows polluting companies in the north to buy credits from polluting companies in the south so they can continue business as usual.


Oscar pointed out the main flaw of the scheme:


"What many people fail to see is that offsets are not reductions. They're moved emissions. They're about storytelling. You predict how much you could have emitted and then promise to emit a little less.


"Once you've done that it's just a case of convincing the UN accreditation panel of your story. If they buy it, you get the credits."


The CDM and Waste

Wastepickers alliance
The Wastepickers Alliance at the UN climate talks.

Simon Mbata from the South African Wastepickers Association spoke about the impacts of the CDM on the livelihoods of wastepickers. He explained how CDM funds are being paid to companies to build waste incinerators and to harness methane from landfill sites. As a result wastepickers are often forcibly excluded from waste sites.


He agrees that it's better to put the methane from landfill sites to good use rather than releasing it into the air, but:


"It is even better not to emit methane in the first place. Almost all waste can be treated so it doesn't make it to the landfill. That's why wastepickers need to be part of the process and integrated into the whole waste management system." he said.


easy money for polluters

Tristen Taylor, from Earthlife South Africa, talked about how large energy companies are making money out of carbon offsetting.


He introduced us to the South African energy company Sasol, the world’s leader in coal-to-liquid (CTL) technology - the most carbon-intensive way of making petrol and diesel. Sasol’s Secunda plant produces more carbon dioxide emissions than any other single source in the world.


Sasol is involved in carbon trading through the Clean Development Mechanism (CDM). It has one CDM approved project for destruction of nitrous oxide, a lucrative and easy option which yielded 260,000 Certified Emission Reductions which the company then went on to sell.


By the time Sasol were ready to submit another project for CDM funds , South African civil society groups were one step ahead of them and reported inaccuracies in the company's application. As a result the application was blocked because meaning that the accreditation board believed the project would have happened anyway without carbon credits.


More information on Sasol and South Africa’s climate policy can be found in our new report


 The impact of REDD

redd protest indonesia
A REDD protest in Indonesia
Isaac Rojas, Friends of the Earth International's Forest and Biodiversity coordinator, introduced FoEI's latest report that looks at the impacts of the UN's 'Reducing Emissions from Deforestation and Forest Degradation in Developing Countries' programme - commonly known as REDD.


'In the REDD' looks at the impact of a REDD pilot project run by Australia in Central Kalimantan, Indonesia.


Isaac first noted that the project does not formally guarantee the rights of indigenous people. This is actually in contravention of  one of the UN's own declarations on Indigenous rights.


There has been no respect for traditional rights in the way this project and others - in Ecuador, Congo and Mozambique - are carried out.


Isaac explained the effects of this in practice:


"In indigenous cultures, when someone plants a tree in your forest it means they are claiming ownership. This is therefore creating tension and confusion among local groups. When they are no longer able to access parts of the forest to harvest they think their forest has been taken away from them."


Isaac also pointed out that, in all the REDD projects he's aware of, there is a complete lack of information in the public domain about what is happening.


"People have no idea that their forests are being turned into a global commodity" he said.


Read our report 'In the REDD'


Climate smart agriculture?

It's not only forests that have been commodified, Teresa Anderson from the Gaia foundation talked about how the World Bank is promoting so-called “Climate Smart Agriculture” and carbon offsets as the future of African agriculture and climate solutions.


She believes the figures being banded though are wild estimations.


“Measuring carbon captured in soils presents major problems. It is simply not possible to measure every square metre of land to assess the carbon stored. Variations in soil type and practice means large uncertainties regarding amounts of sequestered carbon from plot to plot.”


What is clear though is the money involved in the project. Teresa talked about the figures involved in a pilot project in Kenya:


"Consultants are making over a million dollars in the course of the pilot, whereas farmers are receiving just a few dollars each."


She concluded by voicing her concerns for what will happen if agriculture is including in carbon markets:


“An agreement on Agriculture at COP17 will lead to land grabs and deliver African farmers into the hands of fickle carbon markets.”


the wrong question

The two hour session finished with panelists looking for a way forward and something positive for people to take with them.


The panel stressed the view that carbon offsetting in all forms is a false solution to climate change - it is simply a way for traders to find new ways to make money.


Oscar Reyes, from Friends of the Earth England Wales and Northern Ireland made the following observation:


"If trading and making money out of carbon is the answer then we must be asking the wrong question. The question should be: How can we have low impact lifestyles, breakdown the current energy systems and create more renewable energy?"


Further reading

Read 'Our climate is not for sale' to find out more about carbon markets


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