Patrick Bond: Climate change

THE recent Cancun climate- change agreements’ fatal flaw is simple: faith in fickle markets. A year from now in Durban, the apparently unifying strategy of combining ever- broader emissions trading with a modicum of north-south aid to resolve contradictions between national blocs will again become a destructive wedge.

As world negotiators stared into the abyss of failure, markets became a lifeline. The World Bank was everywhere in Cancun, applying neoliberal economic theory where it’s rarely gone before: into new Chinese emissions markets, lurking within tropical forests, burrowing into the topsoil of agricultural land, and even tackling large "charismatic" endangered species.

All are sites for extended corporate investments and offsets against planet- threatening emissions.

The idea is lowering the business costs of the transition to a post-carbon world. After a cap is placed on total emissions, high-polluting corporations can buy increasingly costly carbon permits from those that don’t need so many, or which are willing to part with them for a higher price than the profit they make in production or energy- generating or transport activities.

However, a global civil society network — the Durban Group for Climate Justice — was formed in 2004 in opposition to "the privatisation of the air". We worried that the main test case, the European Union’s (EU’s) Emissions Trading Scheme, not only failed to reduce net greenhouse gases there, but suffered extreme volatility (five crashes from 2006 to this year), an inadequate price of €15/ton (down from a high of €30/ton 30 months ago and far less than is required for post-carbon transition investments), and worsening fraud scandals. The market fix is also being tried in the third world through Clean Development Mechanism (CDM) projects, whereby investment strategies to prevent "additional" pollution also qualified for carbon credits, reaching about 6% of total trading at peak in 2008. But, illustrating the pitfalls, Sasol argued that its Mozambique gas pipelines, far less damaging than burning Mpumalanga coal, were "additional" because they wouldn’t have been built without CDM incentives. The specious claim was rejected by United Nations (UN) authorities after a complaint by Earthlife Africa last year.

With Europe as the base, world emissions trade grew to more than 130bn in 2008 and — while flat since then due to economic meltdown, corruption investigations and despondency induced by the Copenhagen round of talks — the market is projected to expand to 3-trillion a year by 2020 if the US signs on. Last month, a new estimate of up to 50bn in north-south market-related transfers and offsets each year emerged from a UN financing commission, which included Planning Minister Trevor Manuel . World climate managers evidently hope to skimp on grants and instead beg business to push vast sums into CDMs instead.

Durban is an important guinea pig for at SA’s lead CDM pilot, the Bisasar Road landfill, where methane from rotting rubbish is converted to electricity. After helping set it up, the World Bank refused to take part in marketing or purchasing Bisasar Road emissions credits. Local activists say the reason was growing awareness of Durban’s notorious environmental racism.

In early 2005, just as the Kyoto Protocol came into force, a Washington Post front-page story revealed how community organiser Sajida Khan suffered cancer from Bisasar Road’s toxic legacy. Back in 1980, the landfill — Africa’s largest — was plopped in the middle of Durban’s Clare Estate suburb, across the road from Khan’s house, thanks to apartheid insensitivity.

Instead of honouring African National Congress politicians’ promises to close the dump in 1994, the municipality kept it open when R100m in emissions financing was dangled.

After Khan died of cancer in mid- 2007, civic pressure subsided and Durban began raising €14/ton for the project from private investors.

Similar controversy surrounds the Reduced Emissions from Deforestation and Forest Degradation (Redd) programme. In theory, Redd sells investors forest protection. But it’s seen as a boon to voracious commercial forestry and a danger to indigenous peoples, given that proper safeguards were not adopted in Cancun.

And everyone from EU climate commissioner Connie Hedegaard to Greenpeace warns that Redd could wreck fragile carbon markets, not only due to socioecological forest controversies but because a fresh glut of credits would again crash the price.

Financial gaming also remains rife in the EU, and last week even the ordinarily pro-trading World Wide Fund for Nature and Öko-Institut attacked steel producers Thyssen- Krupp and Salzgitter as fraudulent carbon profiteers, demanding "the EU put a halt to the use of fake offsets".

In short, the recent market mania was a dangerous diversion from a daunting reality: the US, China, SA and most other big emitters came to Cancun to avoid making the binding commitments required to limit the planet’s temperature rise in the 2000s, ideally below the 1,5° C scientists insist upon. Naturally the (binding) Kyoto Protocol is a threat to the main emitting countries, which want to replace it with the voluntary, loophole-ridden Copen- hagen Accord. And, naturally, the north’s failure to account for its vast "climate debt" continued. Pakistan suffered 50bn in climate-related flood damage alone this year, yet the total on offer from the north to the whole world is just 30bn for 2010- 12.

And even that’s funny money, according to Hedegaard. When last February she complained (according to WikiLeaks) that Tokyo and London were trying to pay their share partly in the form of loan guarantees, not grants, US state department deputy climate negotiator Jonathan Pershing registered his approval: "Donors have to balance the political need to provide real financing with the practical constraints of tight budgets."

The Copenhagen Accord, signed by Jacob Zuma , Barack Obama, Wen Jiabao, Luiz Inacio Lula da Silva and Manmohan Singh, is already compromised by bribery. The Maldives and Ethiopia — once leaders in the Group of 77 and Africa — dropped their resistance to that shoddy deal in exchange for payola, WikiLeaks revealed. After Hedegaard told Pershing that the Alliance of Small Island States "could be our best allies, given their need for financing", he provided a 50m aid package to the Maldives. The island’s ambassador to the US, Abdul Ghafoor Mohamed, told Pershing on February 23 that if "tangible assistance" was given to his country, then other affected countries would realise "the advantages to be gained by compliance" with the US climate agenda.

Whether a comprehensive Durban deal replaces Kyoto, continuing climate-market failures and worsening corruption are distracting the world from the more serious work required to go post-carbon.

To prevent the ozone hole from growing, an outright ban was required against chlorofluorocarbon emissions, and the Montreal Protocol achieved this starting in 1996. There’s our model for serious mitigation action.

Given SA’s own carbon addiction and the lamentable role SA’s climate negotiators play, slowing progress out of self-interest, Cancun’s desperate turn to the market will backfire next year. In Durban, an uncivil society starved for climate change mitigation and the rerouting of cheap electricity from guzzling metals smelters to the masses will be especially noisy.

Bond is professor of development studies at the University of KwaZulu- Natal’s Centre for Civil Society, and co-editor of Climate Change, Carbon Trading and Civil Society (UKZN Press, 2009).