15. World Bank’s Carbon Trade Fiasco
Source:
Upside Down World, February 11, 2009
Title: “The World Bank and Climate Change: Sustainability or Exploitation?”
Author: Mary Tharin
Student Researchers: Victoria Masucci and Christine Wilson
Faculty Evaluator: Elaine Wellin, PhD, Sonoma State University
In the name of environmental protection, the World Bank is brokering
carbon emission trading arrangements that destroy indigenous farmlands
around the world.
The effort to coordinate global action to reduce greenhouse gas (GHG)
emissions began with the Kyoto Protocol, which was adopted in 1997 and
now has been ratified by 183 nations. While many of the strategies established
in the protocol are encouraging, some are proving to have fatal flaws.
One such program, known as Clean Development Mechanism (CDM) investment,
has become a means by which industrialized countries avoid reducing
their own emissions through the implementation of “emissions reduction”
projects in developing nations.
In accordance with the Kyoto Protocol, many governments have established
“caps,” or limits, on the greenhouse gas emissions that can
be produced in their countries. Industries can respond to these government-imposed
limits by responsibly reducing their emissions, or they can bypass this
process entirely by purchasing “carbon credits” from other
industries in other parts of the world who, through CDM investment brokered
by the World Bank, trade emission reduction “credits” in order
to “offset” excessive emissions. Joris den Blanken, a climate
change specialist with Greenpeace, says, “Offsetting means exporting
responsibilities to the developing world and removes the incentive for
industry to improve efficiency or to invest in renewable energy.”
While the World Bank claims that this system “supports sustainable
development . . . and benefits the poorer communities of the developing
world,” the program in reality has become little more than a corporate
profit-boosting enterprise. In fact, many transnational corporations
are using cap and trade programs not only to avoid emissions responsibility,
but to further profit by developing environmentally and socially destructive
industries in less developed countries.
In Latin America, where a long history of corporate exploitation has
already taken a steep toll, environmentalists and indigenous communities
are beginning to speak out about the dangers of the CDM. Because of
a myopic focus on greenhouse gas reduction only, and a lack of accountability
to local communities, many projects are producing other environmental
and social ills that are diametrically opposed to the program’s
stated objectives.
Nevertheless, the United Nations Environmental Program reports that,
to date, 4,364 projects have been approved for CDM funding, and the
movement continues to gain momentum. According to the World Wildlife
Fund, the number of new project proposals has risen drastically in just
a few years, from less than ten per month in early 2005 to about 100
per month in 2007.
Wood and pulp industries have shown great interest in harnessing the
carbon market to justify and finance projects that involve expropriating
indigenous farm and grazing land for planting of enormous monospecific
plantations. These plantations threaten the area’s biodiversity
and can severely deplete water resources. Author Mary Tharin warns,
“From an ecological standpoint, planting large-scale plantations
of non-native species in this area is clearly a step in the wrong direction.
From a societal standpoint, this could spell cultural genocide.”
According to a 2008 report by Japan Overseas Plantation for Pulpwood
(JOPP), entitled “Feasibility Study of Afforestation CDM for Community
Development in Extensive Grazing Lands in Uruguay,” the land that
would be used for the JOPP’s “afforestation projects,”
is currently used for “extensive grazing” of cattle and sheep.
The report, which elaborates on “land eligibility,” makes
no mention of the people who own, live on, or make a living from the
use of the land in question. The only allusion to this issue is the
brief assurance that all displaced cattle would be “sold on the
open market.” Despite the fact that “cattle and sheep production
has been the traditional rural activity in the project area and all
the surrounding regions since the17th Century,” the report contends
that the establishment of plantations would be a more cost-effective
use for the land than pasture. The question then becomes: cost-effective
for whom?
The World Bank touts the CDM as an “integral part of the Bank’s
mission to reduce poverty through its environment and energy strategies.”
However, in Latin America as in other parts of the developing world,
the global carbon market is proving to be largely detrimental to the
indigenous and the poor. With little or no input on how a project is
conducted, local communities have virtually no control over how their
land, water, and resources will be affected.
In a recent documentary by Carbon Trade Watch, villagers explained
that the massive plantations—which cover about 100,000 acres—are
diverting water from local streams, causing a sharp decrease in fishing
and killing off medicinal plants. In an interview, one local woman lamented
that corporate plantations “continue destroying our community,
destroying our citizens, destroying our fauna, destroying our flora,
and nobody does anything [to stop it].”
Lack of accountability to local populations is a fundamental flaw in
the way CDM projects are presented, evaluated and implemented. The official
“Project Design Document Form”—which the CDM Executive
Board uses to approve or deny funding—largely disregards the impact
of projects on local communities. The document contains no binding legal
language, asking only for a “report on how due account was taken
of any comments received” by local stakeholders. In their assessment
of four CDM projects carried out in Brazil and Bolivia, the EEP found
that “participation of local community members was found to be
limited.”
While the World Bank pays constant lip service to the importance of
sustainability and poverty alleviation in the CDM, it continually fails
to deliver positive results for either the environment or disadvantaged
communities in the developing world. The global carbon market is proving
to be simply another weapon used by multinational corporations to accelerate
their incursion on the rights of indigenous peoples and small-scale
landholders in Latin America.
The irony of this situation takes on an especially tragic hue since
many of the communities at risk have been living in a sustainable manner
for centuries and thus should be seen as models in the fight against
environmental degradation and climate change. Instead, the World Bank
has adopted a system that inadequately addresses one pressing environmental
hazard at the expense of other important environmental issues and the
wellbeing of the world’s most vulnerable, and often most knowledgeable,
of populations.
Janet Redman at the Institute for Policy Studies says, “Farmers
[in the global south] are trading communal land rights and their ability
to feed themselves for the whims and price fluctuations of the international
carbon market.”
Update by Mary Therin
As governments, environmentalists, and industry leaders gear up for
UN Climate Change Conference this December in Copenhagen, the debate
over carbon offsets has taken center stage. Groups including the European
Commission have acknowledged the many shortcomings of the Clean Development
Mechanism and are calling for reform. In late April 2009, delegates
from all over the world attended the Indigenous People’s Global
Summit on Climate Change, producing a declaration which called on governments
to abandon “false solutions to climate change that negatively impact
Indigenous Peoples’ rights . . . such as carbon trading, the Clean
Development Mechanism, and forest offsets.”
Unfortunately, the CDM Executive Board, instead of addressing issues
of transparency and accountability, has proposed an expansion of some
of the carbon offset scheme’s most problematic aspects. The board
has put forth plans to expand its forestry mechanism and ease the funding
application process. According to Oscar Reyes of Carbon Trade Watch,
these reforms would drastically expand CDM while “lowering the
already inadequate checks on environmental sustainability and social
justice.”
Meanwhile, the Clean Development Mechanism continues to expand. In
May 2009 alone, 132 new CDM projects were submitted for approval, marking
an all-time high in the application process. At the same time, more
evidence is cropping up all over the globe that many “emissions
reduction” projects in the developing world are doing more harm
than good. In June 2009, the UK-based Daily Mail published an exposé
on a UN-funded chemical plant that has poisoned the local water supply
in Gujarat, India. According to Eva Filzmoser of CDM Watch, large hyrdo
and gas projects are the most damaging receivers of CDM funding. These
projects, she argues, rarely save additional emissions and in fact provide
perverse incentives to expand environmentally degrading industries.
In the United States, debate over carbon offsets and cap and trade
schemes has erupted since the American Clean Energy and Security Act,
also known as the Waxman-Markey bill, was passed by the House Energy
Committee in May 2009. While many environmentalist groups are heralding
the bill as a huge step toward reducing greenhouse gas emissions in
the United States, others point to the prominence of carbon offsetting
in the bill as a way for corporations to skirt any real commitment to
emissions reductions. According to the Institute for Policy Studies
(IPS), up to 2 billion tons of carbon (about 30 percent of current US
emissions) could be purchased as offsets under the legislation, half
of which would come from developing countries through programs like
the Clean Development Mechanism.
While most of the mainstream media and many environmental groups have
jumped on the cap and trade bandwagon, organizations such as the Institute
for Public Studies, Carbon Trade Watch, and CDM Watch continue to boost
public awareness on the dangers of cap and trade. A number of voices,
including The Economist, have come out in favor of a Carbon Tax as a
more effective way to motivate emissions reductions. These groups are
calling for people in the developed world to take the lead by shrinking
our own carbon footprints, and demanding a real solution to climate
change that starts at home.
For more information, see:
Sustainable Energy and Economy Network (Institute for Policy Studies):
http://www.seen.org
Carbon Trade Watch: http://www.carbontradewatch.org/
Friends of the Earth: http://www.foe.org/global-warming
CDM Watch: http://www.cdm-watch.org/