The following comment has been produced by members and affiliates of the Climate Justice Now! network. The network numbers more than 1000 organizations in the global north and south. It is a preliminary comment and has not been fully discussed by all members of the network yet. Accordingly, not every recommendation in this comment has been explicitly endorsed by all network members or organizations, but only by those who have signed on below. However, these comments capture many of the ideas and the fundamental consensus, which have been formulated in previous meetings since the CJN! networks’ inception and first articulation of the Principles for Climate Justice in 2008.
Accordingly, as representatives of people’s movements and independent organizations, deeply concerned about the climate crisis and the limited nature of the solutions that have been advanced at the international level thus far, we are further concerned that the Rio+20 process will continue a process of advancing failed “solutions” to the economic and environmental crises of our times. In a desire to embrace and advance the “green economy,” we are concerned that world leaders will not heed the lessons from the implementation of the biggest and newest market in a natural resource—carbon. By ignoring these lessons, the Rio+20 process risks expanding and deepening the climate crisis even further in a vain attempt to “throw money at the problem” instead of finding real solutions. If a “green economy” includes the continued commodification of not just carbon, but water, biodiversity and other natural resources, we are headed down the path of further endangering all life on Earth.
We must recognize that our global economy and every nation’s Gross Domestic Product (GDP) does not now accurately count and measure the things we value, nor does it recognize the value of things that must remain free—such as water, air, and the vast diversity of life itself. In an attempt to get an accurate metric of these things nature offers for free, some suggest we should put a price on them and, where the price is too high, trade them in the interest of economic efficiency, and in order to avoid their depletion, degradation, or chemical imbalance. We suggest this is a path fraught with danger.
As some countries and jurisdictions have come to recognize, the blind pursuit of GDP growth underlies many of our current environmental and social crises, including climate change. Growth in GDP does not equal social and environmental wealth, diversity and wellbeing, yet nearly every nation in the world pursues GDP growth as an end in itself.
Rather than questioning the very foundation upon which our global economy is built, “solutions” to the climate crisis, like carbon trading, build on that foundation, continuing to push for GDP growth, so long as pollutants like carbon are traded.
Yet the clearest lesson from the trade in carbon on a global scale is that it is and has been an utter failure, environmentally and socially. Carbon trading entrenches and magnifies social inequities in many ways: The carbon market creates transferable rights to dump carbon in the air, oceans, soil and vegetation far in excess of the capacity of these systems to absorb it. Billions of dollars worth of these rights have been awarded free of charge to the biggest corporate emitters of greenhouse gases in the electric power, iron and steel, cement, pulp and paper, and other sectors in industrialized nations that have caused the climate crisis and already exploit these systems the most. Costs of future reductions in fossil fuel use have fallen disproportionately on the public sector, communities, indigenous peoples and individual taxpayers.
Rather than incentivize more windmills and solar panels, the Kyoto Protocol’s Clean Development Mechanism (CDM), as well as many private sector trading schemes, have incentivized cheap carbon dumps, such as eucalyptus plantations that destroy the soil and water tables. These schemes have resulted in the creation of a new tool to disenfranchise people from their land, their forests, and their rights including the right of Indigenous Peoples, as enshrined under the U.N., to free, prior, and informed consent. Land grabs are taking place on a massive scale on the African continent and elsewhere in the developing world in order to take advantage of cheap carbon offsets, and cheap land for tree farms and biofuel plantations. This in turn has resulted in: destruction of natural forests and their biodiversity, a drop in water tables, and a rise in the price of food, with devastating consequences for the poorest, especially those who have become landless.
Studies and investigations have brought to light massive corruption in carbon markets, such as the hydrofluorocarbons (HFC-23)-reduction schemes. These schemes have provided huge windfall profits to companies to destroy a powerful global warming gas—HFC-23, which is over 11,000 times more potent than CO2. In doing so, they have actually incentivized the continued expansion of the polluting industry that spawns HFC-23, the manufacture of ozone-destroying chlorodifluoromethane (or HCFC-22). The destruction of HFC-23 is not costly; but its carbon offset support has meant a boon for this industry, while doing nothing to reduce the impact of the fossil fuel industries’ impacts on local communities. Furthermore, precious time and money has been wasted creating and destroying HFC-23 molecules, while clean, truly renewable energy projects have been starved for cash globally. We cannot afford to waste precious time while entire countries, such as Pakistan, El Salvador, Honduras, Thailand, and others are threatened with inundation due to increasingly common extreme weather events.
The climate crisis is being fueled largely by the exploitation of fossil fuels and the clearing of forests, which releases carbon stored in these natural resources into the global atmosphere. We are fast approaching dangerous tipping points in the global climate system, beyond which there is no return. The vast majority of climate scientists recognize that climate change is both underway and proceeding at a pace far faster than even their worst case scenarios had anticipated.
Despite this clear and present danger, governments, corporations and international financial institutions continue to support and finance fossil fuel exploration, extraction and other activities that worsen global warming, such as forest degradation and destruction on a massive scale. Meanwhile, carbon markets continue to distract policy-makers from meaningful action and only token sums have been dedicated to renewable energy.
When the Kyoto Protocol was signed in 1997, carbon markets were only supposed to comprise a small fraction of the overall action on the climate crisis. Today, carbon trading has become the primary “solution” to the climate crisis, despite its record as a failure. Greenhouse gas emissions have grown at a faster pace in countries that have carbon markets up and running. Carbon offset schemes, such as the Clean Development Mechanism, have been riddled with corruption, perverse incentives to pollute and deforest faster than countries otherwise would in order to artificially raise a baseline from which to “reduce” emissions.
The process of commodifying carbon passes the Earth’s capacity to support life into the same corporate hands that are destroying the climate, and puts in charge the same bankers that destroyed the global economy. Gaming the subprime mortgage market resulted in the collapse of the global economy, something nearly every country is now feeling the effects of. Gaming in the carbon market has been underway for several years. This must be stopped if we are to prevent the next big bubble—a carbon bubble–from bursting, and serious action must be taken now to prevent runaway climate change.
There are other ways forward – ways that recognize and build on the statements of the Rio Declaration of 1992. Key among the items endorsed by all of the world’s countries in that document was:
National authorities should endeavour to promote the internalization of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear the cost of pollution, with due regard to the public interest and without distorting international trade and investment.
Carbon trading turns this principle upside-down. Instead of paying the costs, many polluters are in fact profiting from their pollution.
We suggest there are several measures which could be taken to address the root causes of the economic crisis, while also mitigating poverty, and providing finance for the necessary transition to an economy for the people and the planet.
1. Tax pollution—carbon or otherwise—and use the revenue generated to help build local food systems, public transportation, affordable energy for cooking, clean renewable (non-combustion) energy and other pieces of an ecologically grounded and socially just economy. A pollution/natural resource tax should focus as a priority on reducing consumption of energy and resources in an equitable manner. A tax can come in the form of a “tax and dividend,” but taxes on pollution should be universally pursued to discourage leakage into other countries.
2. Replace or supplement the GDP with a set of indicators that reflect overall environmental and social wellbeing, such as the Index of Sustainable Economic Welfare or the Genuine Progress Indicator, in order to more accurately measure and value the kind of world we want to build.
3. Reject any scheme in which individuals, groups, corporations or governments profit from placing a price on and gambling with the control over our planet’s carbon cycling capacity, our water, our food supply, or other elements essential to life sustaining itself.
4. Remove all subsidies from fossil fuels and biofuels. The U.S. currently provides over $35 billion in subsidies to the fossil fuel industry. Globally, fossil fuel subsidies amount to over $250 billion per year—a figure that is more than twice what would be needed ($100 billion) to provide the entire planet with renewable energy within 10 years. Biofuel subsidies are driving increased demand for land and rising food prices, while contributing to, rather than mitigating, climate change.
5. Finalize the creation of a democratic and accountable Green Climate Fund under the United Nations to channel climate finance from industrialized countries to countries and communities impacted by climate change in the global South. Developed countries have committed to providing $100 billion per year by 2020 for climate finance – not enough for the scale of the need, but a start. The World Bank, export credits agencies, and all other international financial institutions must be kept out of the Green Climate Fund. Their continued support of fossil fuel projects, extractive industries, and carbon offset programs put them in direct conflict with the goals of a climate fund. Despite being handed the responsibility of providing clean energy finance in Rio in 1992, the World Bank is currently breaking its own records for lending to oil, gas and coal, while providing relatively little in the way of renewable energy lending.
6. Implement a financial transaction tax (a.k.a. Robin Hood Tax or FTT). By placing a tiny tax on trades in stocks, currencies, derivatives and other financial assets an FTT could slow the rate of speculation in global financial markets and curb instability, while generating hundreds of billions of dollars per year. The revenue from which could be channeled into the Green Climate Fund and used to help finance clean energy, forest protection and reforestation schemes, public health, climate change adaptation, and other development needs. Ideally, an FTT would ultimately be implemented internationally, but countries can (and have) acted on their own to put in place effective financial transaction taxes.
World Development Movement, U.K.
Gender Action, U.S.
Global Forest Coalition, Paraguay
Biofuel Watch, U.K.
Jeunes Volontaires pour l’Environnement-International
Centre for Civil Society Environmental Justice Project, South Africa
Ecologistas en Accion, Spain
Plataforma Boliviana Frente al Cambio Climático, Bolivia
Pan-Africa Climate Justice Alliance, Kenya
Sustainable Energy & Economy Network, Institute for Policy Studies, USA