Carbon markets: Trading in ignorance

Are tradeable emission credits, offset schemes and carbon markets the way to solve the climate crisis? Do such markets demonstrate how ‘environment’ and ‘development’ can be combined into ‘green capitalism’? In a carefully argued deconstruction of the carbon market fiction, Larry Lohmann explains how such markets effectively conceal and undermine “the knowledge and analysis needed to respond to global warming.”

In his article, Lohmann provides examples of the wilful ignorance inherent in carbon markets. The following is my summary of these ’10 ways in which carbon markets create ignorance’.

1. Corporations that are unable to meet emissions targets can simply buy the emission credits they need from another business in order to make up any shortfall. This means that government regulation of emissions is entirely detached from how cuts in emissions are actually made. On the basis of no supporting evidence whatsoever, the impact of the various technologies or processes being used to make cuts in emissions in one industry or another is assumed to be equivalent. For example, a company may reduce emissions at all its facilities, or it may close several factories completely and concentrate production at one centre. While still reducing overall emissions, this could actually increase the pollution dumped in the unfortunate host community. Which approach is preferable? The carbon market offers no opinion on the matter.

2. The purchase of emission credits described in 1 also detaches the regulation of emissions from where cuts in emissions are made, because credits can be traded around the globe. Chemical companies operating in Lousiana’s notorious ‘cancer alley’ could, for example, purchase credits from firms in New Zealand. It is assumed that the effects of each emission credit are equivalent in each of the various communities implicated in the transaction. The vastly different circumstances of environment and socio-economic status, and of power and politics, in these variously affected communities are simply ignored.

3. Cuts in emissions of other greenhouse gases can be traded as CO2 emission credits through highly dubious equivalences. CO2 equivalences such as these are derived largely in ignorance of the actual atmospheric physics and chemistry of the gases. Lohmann examines the chemical HFC-23, for which the CO2 equivalence was revised in 2007 from 11,700 to 14,800. This latest figure has an error margin of ±5,000. That is to say, the current best estimate is that the figure lies somewhere between 10,000 and 20,000. On this vague basis, emission credits are created and money is made from the destruction of HFC-23 stocks.

4. Carbon markets are based on the assumption that adequate greenhouse gas emission measurement and enforcement systems exist. They don’t. Melinda Marquis and Peter Tans suggest the monitoring network required to do the job would be 10 times larger than that currently in existence.

5. ‘Offset’ projects such as planting trees or setting up windfarms are deemed to be emission reductions. They aren’t. A windmill is not a reduction in greenhouse gas emission. The equivalence exists purely by UN decree. To bring this equivalence into existence, the UN has set up an “enormous technocracy … dedicated to refining arcane metrics for concealing this reality.” The alchemy is explained in mind-numbing detail on the UN’s ‘Clean Development Mechanism’ (CDM) website here.

6. Because of the equivalence outlined in 5, massive funding is available for potentially lucrative offset projects. As Lohmann writes, long-established community knowledge and specific, localised solutions to social, economic and ecological problems are being overwhelmed and destroyed by the scale of such schemes, for the benefit of global carbon markets. By way of example, Lohmann cites 146 hydro schemes proposed or underway in the mountain valleys of Uttaranchal, India. The Asian Human Rights Commission has described the disruptive and violent consequences of just one of these projects on the Bhilangana River here; the application for approximately one million emission credits in respect of this same project under the UN CDM can be found here.

7. Schemes are underway to commodify old-growth native forests in the South, in order to generate emission credits. The rationale for such schemes derives from the idea that the ignorance of rural people of the South is responsible for the destruction of such forests. Such myths were exposed long ago, but they serve well as another necessary fiction supporting the expansion of emission trading.

8. The “spurious commodity of ‘carbon neutrality’” suggests that the offsetting of our ‘unavoidable’ personal consumption choices can solve the climate crisis. Problems of structural power inherent in, say, international oil politics are thereby completely ignored.

9. The climate crisis demands a “wide-ranging grassroots debate and political mobilization.” However, the thick fog of jargon and acronyms generated by the technocrats of the UN and national governments works very effectively to suppress access to knowledge, understanding and discussion of the carbon market and its regulatory systems. Consequently, while corporations and politicians argue about the obscure details of trading schemes, the grassroots debate about coping with climate change isn’t happening.

10. Carbon markets are largely the concern of heavy users of fossil fuels and other intensive greenhouse gas polluters. Communities living in low-emission contexts or grassroots organisations working to reduce the use of fossil fuels are ignored by this system. But these are precisely the people who will lead the way to real, sustainable solutions to the climate crisis.

In summing up his article, Lohmann describes his real fear: that global climate justice will be impossible if nations become trapped into the carbon market and emissions trading system. Carbon markets are “interfering with effective and democratic approaches to global warming” and locking in ignorance about global environmental realities.

We can’t let this happen.


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