Ripoffs, exploitation, injustice and ecological degradation: The CDM in action

A carbon market may encourage the public to feel that the pressing problems of climate change are being addressed by the emission credit trading system. Even those who have some doubts tend to accept it (on the most minimal grounds possible) as ‘better than nothing’. Yet there are substantial problems with the Kyoto Protocol that suggest that it might well be worse than nothing.

One of the ways by which the market operates is to allow new credits to be created or, as we are led to believe, ‘earned’ as recompense for investment in certain schemes and projects. These schemes generally take the form of:

– renewable energy developments such as hydro schemes,

– projects to destroy greenhouse gases such as N2O and HFC-23, or

– carbon ‘offset’ (or ‘sink’) projects such as tree plantations.

By way of some magical equations, developed by a huge UN bureaucracy, these projects are deemed to be the same as reductions in greenhouse gas emissions. Many such schemes operate in the countries of the South under the so-called “Clean Development Mechanism” (CDM).

How can it be that such noble sounding ‘clean development’ schemes are actually worse than nothing?

Firstly, CDM projects are supposed to be schemes that would not have otherwise happened but for the income generated by the credits. However, according to Larry Lohmann, many supposed CDM projects are not ‘additional’ projects at all, but simply ‘business as usual’ relabelled as CDM projects in order to gain carbon credits into the bargain. In this way, the CDM simply provides a nice little earner on the side of a project that is already fully funded.

Kevin Smith writes in Red Pepper magazine of a 2006 investigation in India, conducted by an adviser to the CDM executive board, which conservatively estimated that one-third of all projects fell into this category.

Secondly, the number of credits gained from each of these projects is largely at the discretion of the organisation involved, which provides a second scamming opportunity for the unscrupulous, This arises from the way credits are earned, which is by calculating the difference between the level of emissions that occur in a world with the CDM project and the level of emissions that would have occurred in a hypothetical alternative world imagined without the project. On this basis, a corporation funding a CDM project can effectively award itself just about any number of emission credits it pleases on the basis of its own choice of imagined parallel universe – the more imaginative the better as far as investors are concerned.

Lohmann suggests that estimates of the benefits of CDM projects can vary by hundreds of percent. An unpublished UN report, summarised by Guardian reporters Nick Davies and David Adam, seems to agree, suggesting that there may be faults with up to 20% of CDM carbon credits already sold.

Now we can see why so many people favour the market approach – while it might not actually do anything about climate change, it sure does seem like a great way to make truckloads of money. It is clear that the CDM has no demonstrable integrity and highly doubtful effectiveness as a means to tackle climate change.

But even if the CDM did have some integrity in its own terms, its external impacts would still be distressing. At the sharp end of the CDM schemes, the South becomes a ‘carbon dump’ for the industrialised world, as land previously used by local people is enclosed and converted to tree plantations.

These monoculture tree plantations usually consist of fast-growing exotics such as eucalyptus. (The term ‘forest’ is inappropriate as it conveys the idea of an ecosystem, which these plantations patently are not.) The documentary The Carbon Connection shows vividly how such plantations in Brasil have caused the drying up of streams, because eucalyptus is a thirsty tree.

Sometimes the enclosure is by forcible means. A report from the World Rainforest Movement describes the circumstances of a Norwegian company leasing land in Uganda for a carbon sink project. The project was linked to the building of gas-fired power stations in Norway which had political support because, through the offset scheme, they were thought to be ‘environmentally friendly’. It caused the eviction of 8,000 people from 13 villages.

More recently, in 2007, the World Rainforest Movement reported how the FACE Foundation (set up by the Dutch Electricity Generating Board) operates a carbon offset project in the Mt Elgon National Park in eastern Uganda: “Villagers living along the boundary of the park have been beaten and shot at, have been barred from their land and have seen their livestock confiscated by armed park rangers guarding the ‘carbon trees’ inside the National Park. The ‘offset’ project sells carbon credits to Greenseat, a Dutch company with clients including Amnesty International, the British Council and the Body Shop”.

Kevin Smith relates another similar story, this time of credits derived from a CDM wind farm project in Maharashtra, India. The credits were sold by UK-based ‘carbon broker’, Ecosecurities. Unfortunately, a visit to the project in 2007 revealed that “The gigantic wind farm had been built on traditional grazing grounds and provided no energy to the villagers themselves. Those who resisted met with repression.”

In summary, then, Kyoto CDM schemes are deeply flawed in themselves and seriously detrimental, both ecologically and socially, in their external consequences. As the examples above illustrate, the CDM promotes the privatisation of collective property and rewards another round of colonial land grabbing with tradeable emission credits.

Many people around the world now recognize these schemes for what they are.

39 climate justice groups, many from the South, recently published a statement indicting “market based ‘innovative’ financial mechanisms” as “false solutions” that are “really for the benefit of corporations … This is a new 21st century phase of colonialism.”

Friends of the Earth Australia notes that the CDM is “flawed and corrupted. Many carbon credits schemes and projects, including those in the CDM are also threatening the livelihoods and environment of communities in the developing world.”

The forestry and forest peoples’ activist organisation, Forests and the European Union Resource Network (FERN), states that when “viewed through the lens of forests and forest peoples, there was little reason to rejoice when governments decided to include carbon sinks as a project category eligible for credits in the CDM. Even worse, governments failed to put meaningful safeguards in place ensuring that environmentally or socially harmful projects were avoided.”

International Rivers, an organisation committed to the protection of rivers and river communities, regards the CDM as “a huge failure that is actually increasing greenhouse gas emissions behind the guise of promoting sustainable development.” Some projects from the CDM’s “hydro hall of shame” are described by Barbara Haya.

Rising Tide Australia is a grassroots group based in Newcastle, NSW, home of the world’s largest coal port. Group member Steve Phillips says that “carbon trading arrangements … allow rich nations to buy their way out of real pollution cuts and impose timber monocultures on third world communities.”

All these organisations, and many others besides, recognize the reality of the carbon market as succinctly summed up by Heidi Bachram: “The trafficking in emission credits serves only to place the cloak of ecological respectability over local and global unequal power relations”. The credits that offset schemes generate are tainted by exploitation, injustice and further ecological degradation. Those concerned for the environment and for social justice cannot possibly support them.


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