While some NGOs and "green" businesses favor the carbon trade and view it as a win-win solution that reconciles environmental protection with economic prosperity, some environmentalists and grassroots organizations claim that it is no answer to environmental problems and that it does not address the causes of global warming. By Carmelo Ruiz
Global warming has spawned a new form of commerce: the carbon trade. This new economic activity involves the buying and selling of "environmental services.” Such "services,” which include the removal of greenhouse gases from the atmosphere, are identified and purchased by eco-consulting firms and then sold to individual or corporate clients to "offset" their polluting emissions. While some NGOs and "green" businesses favor the carbon trade and view it as a win-win solution that reconciles environmental protection with economic prosperity, some environmentalists and grassroots organizations claim that it is no answer to environmental problems and that it does not address the causes of global warming.
The carbon trade works like this: an eco-consultancy that brokers environmental services conducts an eco-audit of a client and comes up with a presumably accurate estimate of how much carbon the client's activities release to the atmosphere. Carbon is the common denominator in all polluting gases that cause global warming.
At the other end of the operation, the firm scours the world in search of environmental services that could offset its client's emissions. These services are usually forests and tree-planting projects and are known in the business as carbon assets or carbon sinks, because trees remove carbon from the atmosphere and sequester it in their wood. The activity of these sinks is often called carbon sequestration.
Using a variety of methodologies, the environmental services broker arrives at an estimate of how much carbon a particular sink sequesters, and then assigns it a monetary value and sells it to a client. The client then subtracts from its carbon account the carbon sequestered by its newly purchased carbon sink. The client is said to be carbon-neutral or climate-neutral when its carbon assets equal its carbon emissions.
The carbon trade is supported by the Intergovernmental Panel on Climate Change (IPCC), a prestigious scientific body that advises the Climate Change Convention. It is also authorized by the Kyoto Protocol's Clean Development Mechanism (CDM).
Contrary to what many environmentalists believe, the protocol does not seek substantial reductions in greenhouse gas emissions. The industrialized countries that sign on to it commit themselves to reduce their emissions to 5.2% below 1990 levels. However, the IPCC stated that in order to prevent a global disaster, these reductions must be of 60% below 1990 levels. The CDM is one of the protocol's three market-based "flexible" mechanisms. The other two are emissions trading, in which industrialized countries trade pollution permits among each other, and Joint Implementation, in which Western industrialized countries fund climate-friendly projects in the former Soviet bloc.
The players in the carbon trade include:
- Firms that do consulting and brokerage of carbon sinks, like EcoSecurities, NatSource, Co2e.com and Climate Change Capital.
- Companies that "validate" and "certify" the quantities of carbon sequestered by sinks, like Det Norske Veritas and Societe General de Surveillance, both European.
- United Nations agencies, like the Environment and Development programs (UNEP and UNDP), which help corporations to locate and purchase carbon sinks.
- Certain U.S.-based environmental groups, which include the World Resources Institute and Environmental Defense.
- Multilateral banks like the World Bank, which has set up a Prototype Carbon Fund.
Climate Care and Future Forests, both of them U.K.-based carbon sink brokers, are private entities that have carried out high profile public relations campaigns to promote both themselves and the carbon trade in general.
Climate Care is a nonprofit organization that sells carbon sinks to individuals and companies and invests the profits in environmentally friendly projects, including wildlife protection in Uganda, energy efficiency in the Indian Ocean island of Mauritius, and small scale hydro dams in Bulgaria. Climate Care's clients are mostly ecotourism companies like Ecotours, Whale Watch Azores and Nature Trek.
Future Forests, a for-profit business, says in its Web page, "We help you to see how much CO2 is produced by the things you do, and suggest ways you can reduce those emissions. What you can't reduce, we can neutralize (or 'offset') for you -- by planting trees that reabsorb CO2 and by investing in projects that cut down CO2 emissions, such as those which use renewable energy sources." The firm's clients include celebrities like Pink Floyd, Simply Red, Kitaro and filmmaker Ridley Scott, corporations such as Fiat, Mazda, Volvo, Marriott hotels, BP, Price Waterhouse Coopers, Warner Brothers, Tower Records, Harper Collins and even NGO's like Amnesty International and the International Union for the Conservation of Nature. However, some environmental organizations have been speaking out against the carbon trade and refuting the industry's claims.
"We are concerned that these companies are indirectly blocking the real solution to global warming, which is reducing and finally halting fossil fuel burning,” declared Heidi Bachram of
Carbon Trade Watch, a group campaigning to curb global warming. "The idea that people can burn fossil fuels and then plant trees to clean up the carbon dioxide which results is simply wrong. This false 'solution' will merely keep people digging up oil and coal, instead of trying to shift to clean energy."
"Pretending that a [metric ton] of carbon stored in trees is the same as a [metric ton] of fossil carbon ignores the very basics of the natural carbon cycle," said Jutta Kill, director of
SinksWatch, an organization that monitors projects claiming to 'neutralize' fossil fuel pollutants. "There is enormous scientific controversy about how much carbon dioxide any given tree-planting can take out of the air, and for how long."
"There's a difference between planting trees, which benefits the climate, and planting trees as part of a program sanctioning further fossil-fuel burning, which does not," stated Mandy Haggith of Worldforests. "It's the difference between green action and greenwash."
"To be able to say you've 'neutralized' the emissions from your car by investing in efficient stoves or machinery, you have to be able to calculate exactly how much of an improvement over 'business as usual' you're making,” said Larry Lohmann of the campaigning group The Corner House. "But there are huge disputes raging over these calculations. Experts are coming up with estimates that differ by orders of magnitude."
According to Oilwatch, "'carbon sinks' are not the solution and they will bring more problems, without solving the root cause of the problem. Like it or not the industrialized countries -- which are responsible for the climatic tragedy that is occurring -- have a great problem to solve and that is the reduction of emissions and the transition to clean, renewable and low impact energy sources. Only then could a solution to the future of the Earth and its inhabitants become possible."
In its defense, Future Forests responded in its web page that "there are 'purists' who believe that the only way to address climate change is to reduce emissions. Future Forests agrees that reductions are critical to dealing with the issue. However, our view is that reductions
and offset are all part of the approach we should be taking. The fact is that until new technologies are commercialized, people will continue to drive cars, take flights and use energy from fossil fuel sources."
"Once a client has reduced CO2 emissions as far as possible, 'offset' is the only way to deal with the unavoidable emissions. Future Forests offers best practice carbon offset, which benefits local communities. The only framework for international action on climate change has a target of a 5% reduction. Future Forests' clients by going carbon neutral are able to go much further to reduce the net impact of their operations, products or services."
But the carbon trade's critics have a different view. "The real solution is the conservation of energy, the reduction of consumption, a more equitable use of resources and equitable development and distribution of clean and renewable low impact energy sources,” stated the World Rainforest Movement. "Yet, while it is almost a platitude to say so, the political will of governments will be necessary. This is scarce, and when it does exist, it must face very powerful and implacable interests.”
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Carmelo Ruiz is author of a bilingual blog on biotechnology, globalization, free trade, and the environment.
A version of this article appeared in the July/August issue of Z Magazine<?a?>
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