Climate talks in Montreal: Averting catastrophe?

For Z Magazine, February 2006

Expectations were high in early December of last year, as 10,000 delegates, representing 189 countries, converged in Montreal to discuss the future of international measures to limit global climate change. A broad spectrum of international NGOs, from Friends of the Earth to the corporate-friendly Worldwide Fund for Nature (WWF), described the negotiations as crucial for saving the planet. The Canadian Prime Minister, Paul Martin, appealed to ‘global conscience’ as he pressed the US to support continuing global talks aimed at reducing greenhouse gas emissions. An estimated 30,000 people took to the streets of Montreal on a frigid Saturday afternoon, in support of the negotiations. Even Bill Clinton made his mark, appearing in Montreal on the last day of the UN conference to offer his support for a ‘precautionary’ approach to climate change.

But in the end, US obstruction nearly carried the day. The US chief negotiator, Harlan Watson, walked out of the talks on what was to be their closing night, after all other countries except for Saudi Arabia had dropped their objections to a final draft resolution. Ultimately, facing diplomatic pressure from the UK and other allies, a bipartisan letter from 24 US Senators, and the likelihood that the outcome would heighten US isolation, Watson returned to the table and agreed to endorse “open and nonbinding” discussions toward continuing reductions in carbon dioxide emissions, so long as the next round of talks required no “new commitments.”

At stake in Montreal was the continuation of a process that began to take shape in Kyoto, Japan in 1997, when 156 countries agreed on measures aimed at reducing carbon dioxide and other greenhouse gases to below 1990 levels by 2012. Developing countries, including India and China, were exempted from mandatory reductions in this first round, but would be eligible for funds that would ultimately help reduce their emissions as well. The US was a signer of the 1992 UN Framework Convention on Climate Change, and thus a participant in the Montreal talks, even though Congress has declined to ratify the more detailed commitments drafted in Kyoto.

The 1997 Kyoto Protocol came into full force early last year after the Russian duma finally ratified the agreement, clinching the support of developed countries representing the necessary 55 percent of global greenhouse gases. Russian support proved crucial once the Bush administration affirmed in 2001 that the US – responsible for a quarter of the world’s emissions – would not ratify Kyoto.

The Kyoto Protocol has its Achilles Heel, however, and it’s one clearly labeled “Made in the USA.” When the Kyoto talks appeared deadlocked, then-Vice President Al Gore made his own surprise appearance. The mainstream press largely credited Gore with “saving” those talks, but his substantive contribution was to insist that any mandatory reductions in greenhouse gases be tied to the creation of a new global market, through which companies achieving better-than-expected reductions could sell “emissions credits” to those less able to do so. This raised the specter of “tradable rights to pollute,” until then a matter of domestic controversy among US environmentalists and policymakers, and made them a potentially universal instrument of global environmental policy.

Thus the discussions in Montreal were not about implementing the technological changes necessary for continuing emission reductions, nor any of a host of policy measures—from ending fossil fuel subsidies, to energy taxes, to raising fines for noncompliance—that could ultimately help achieve substantial reductions. Along with the intensive diplomatic effort to merely keep the US at the table, the main focus of the Montreal meetings was on elaborating, expanding, and refining the emerging global market in carbon dioxide emissions.

Why the Urgency?

For the thousands of people who braved piercing winds to march through downtown Montreal in December, there was little doubt that this UN conference could prove crucial for the future of life on earth. For scientists and policymakers worldwide, global climate disruption is a fact of life, and there is no longer much doubt that its effects are already being felt, nor that the changes we are seeing today are the harbinger of much more severe changes to come.

Outside the US, the scientific debate is no longer about whether climate change is happening, but only how rapid and severe it will be, and whether the changes we are seeing can ever be reversed. Only in the US, where an obfuscating corporate ‘spin’ regarding the nature of scientific debate, consensus, proof, and uncertainty pervades discussions of food safety, environmental toxins, and countless other issues, do scientists still have to defend the idea that industrial emissions of carbon dioxide, methane and other gases are responsible for today’s incremental and accelerating disruption of the earth’s climate.

The basic facts are familiar to everyone who reads the scarce environmental news in our daily papers or popular magazines. The earth’s average temperature has already risen by an average of one degree (Fahrenheit) since the 1950s, and much greater changes—comparable to the difference between today’s global temperatures and those during the peak of the last Ice Age—appear increasingly imminent. The past several years have been the warmest since people began keeping records in the mid-nineteenth century, and evidence from ice cores and tree rings suggests that we are experiencing the warmest weather in at least a thousand years. The climatic instability triggered by this anthropogenic warming has brought extremes of erratic weather: droughts, floods, heat waves, and a devastating increase in the severity of hurricanes.

A representative of the Munich Reinsurance company presenting at a public forum in Montreal reported that the annual incidence of “great natural disasters” has increased since the 1950s from an average of 2 to 7 per year; if we consider only directly weather-related events, their data shows a jump from 1 per year to 5. To most of us, Hurricane Katrina was a profound human catastrophe and the official response assaulted our most basic sense of justice; for the insurance industry it caused $125 billion in losses, the greatest financial loss from any single event in history.

Climatologists have deduced that the increase in ocean temperatures that is attributable to climate change was responsible for one third to one half of the increased duration and severity of tropical storms last summer. “The situation is analogous to rolling loaded dice,” explained a team of scientists writing for the web site (September 2, 2005). One cannot definitively say that any given event, like Katrina, was “caused” by climate change, but loading the dice dramatically improves the odds. Can the tumultuous 2005 hurricane season be explained instead by natural cycles, as we’ve repeatedly been told? Perhaps partially, but as Dr. Peter Höppe of Munich Re explained in Montreal, the last climatic cold cycle was comparable in average temperature to the previous warm cycle, and the current warm cycle is notably warmer than the last.

Recent data on Arctic melting and the shrinking of glaciers worldwide is even clearer in its implications. The European Environment Agency reported last fall that ten percent of Alpine glaciers disappeared during the summer of 2003 alone. Similar observations have been recorded from the Rocky Mountains to the Himalayas; Mt. Kilimanjaro in Tanzania has lost 85% of its ice cap during the last century. Antarctica and Greenland are both shedding large volumes of ice, and the extent of Arctic sea ice during summer months is at its lowest recorded levels. While Arctic peoples struggle with changes in wildlife habitat and seasonal hunting and fishing patterns due to melting ice and thawing permafrost, and tropical island dwellers contemplate abandoning their ancestral homes due to rising sea levels, investors are salivating over predicted increases in the accessibility of Arctic shipping lanes. Meanwhile, melting ice triggers destabilizing climatic feedback loops, as thawing seas reflect less sunlight back into space (demonstrating the well-known “albedo effect”), and organic matter previously trapped in permafrost begins to decompose, releasing large quantities of climate-altering methane.

Throughout most of the world, these are rarely disputed scientific facts. Only in the US are they challenged, like evolution, as ‘mere theory.’ Scientists are generally cautious and conservative by nature. It requires an extraordinary convergence of data from a wide array of different studies for predictions as radical as those now favored by atmospheric scientists to become so widely accepted.

A series of studies published last fall helped focus the world’s attention on the implications of climate disruption for human health. Devastating hurricanes and other intense storms have brought increases in malaria, dengue fever and cholera to vulnerable tropical regions. The European heat wave of 2003 killed 20 – 30,000 people. A recent World Health Organization-sponsored study linked climate changes to an additional 150,000 deaths and 5 million illnesses per year, a toll that could more than double by mid-century. Rising temperatures allow the wider dispersal of tropical diseases, and trigger chemical reactions that increase smog levels in the world’s cities. One sixth of the earth’s population that relies on spring snow melts for their fresh water are especially vulnerable to climate-related changes.

Disease-bearing ticks are moving northward, West Nile virus and various crop diseases are spreading faster during warm summers, and harmful algal blooms (‘red tides’) are toxifying coastal areas. Dr. Paul Epstein of Harvard Medical School, summarizing many such findings in the New England Journal of Medicine last October, wrote, “ All in all, it would appear that we may be underestimating the breadth of biological responses to changes in climate.”

For public officials, development agencies, and health workers around the world, the watchword in response to these changes is “adaptation.” A series of government-sponsored public forums in Montreal featured adaptation to climate change as its central theme. A parade of officials and experts from every continent summarized the latest work on risk assessment, risk management, adaptation, and mitigation of climate change. For most of these speakers, the focus was on immediate local responses to global changes, from severe erosion and storm surges in the Canadian north, to hurricanes and coastal erosion in Cuba, infiltrations of sea water onto many tropical islands, and losses of fisheries and popular beaches in south Asia.

One common theme appeared to emerge from these scores of short presentations: beyond all the statistics, policy frameworks and “adaptation strategies,” the most effective adaptations are resilient local ecosystems and simple, indigenous technologies. The places in the world where local ingenuity over many generations has pioneered accessible, low cost innovations in water storage, crop adaptation, human dwelling patterns and the like are those places where the worst consequences of climate disruption can perhaps be abated.

Kyoto’s fatal flaw?

Ever threatening to the guarded optimism of those participating in various educational events and public demonstrations around Montreal was the looming question of whether the Kyoto Protocol would actually contribute substantively to averting climate catastrophe. Some NGOs, most notably WWF, with their ubiquitous “I ? [heart] Kyoto” stickers (featuring an image of the earth, morphed into a 3D heart shape), harbored no such reservations, but disturbing questions continued to hover over the proceedings.

First, the reductions in carbon dioxide emissions originally mandated by Kyoto represented a mere 5 percent of the developed world’s emissions, whereas scientists tend to agree that cuts on the order of 60 – 80 percent are needed. Second, amidst all the detailed technical discussions taking place inside Montreal’s heavily guarded Palais des Congrès, the vast majority were not about direct emissions reductions at all, but rather about implementing the Protocol’s mandate for creating a new global market in carbon dioxide credits.

“Ninety to 95 percent of the discussions are about the details of creating a carbon market,” explained Larry Lohmann of the UK-based think tank known as the Cornerhouse. Lohmann joined with environmental justice activists from around the world in presenting a series of panel discussions at a makeshift Climate Justice Convergence Center, established as a counterpoint to the city’s official educational fora. Many of the same individuals and groups had met in Durban, South Africa prior to the 2004 round of climate negotiations, and issued a public statement declaring that “Carbon trading will not contribute to achieving this protection of the Earth’s climate. It is a false solution which entrenches and magnifies social inequalities…”

The 2004 Durban Declaration further explained, “History has seen attempts to commodify land, food, labour, forests, water, genes and ideas. Carbon trading follows in the footsteps of this history and turns the earth’s carbon-cycling capacity into property to be bought or sold in a global market. Through this process of creating a new commodity – carbon – the Earth’s ability and capacity to support a climate conducive to life and human societies is now passing into the same corporate hands that are destroying the climate.”

In a series of Z articles from 1990 to 1997, and subsequently in my book Earth for Sale (South End, 1997), I outlined the key economic, political, and environmental objections to the trading of various forms of pollution. Marketable “pollution rights” have been used in the US since the 1970s, and were first proposed by Chicago economist Ronald Coase in 1960. The key underlying myth is that markets breed efficiency: if a given company can reduce pollution at a lower cost than its peers, then others should be able to pay that company to reduce as much pollution as possible instead of being required to implement their own costlier controls. Local experiments involving emissions trades between companies were used on a limited basis to reduce levels of lead and other air pollutants in the 1970s and eighties. In 1990, the EPA issued the first pollution credits designed to be freely traded as a commodity, as part of its effort to reduce the sulfur dioxide emissions that cause acid rain. Tradable water rights, fishing allotments and mining permits were soon proposed, and sometimes implemented.

In the US context, emissions trading has been credited with nominally helping to reduce acid rain since 1990. But those credits were limited to a few dozen large power plants, the number of available credits were substantially reduced each successive year, and monitoring requirements were fairly stringent. Still, the trading of sulfur dioxide emissions was dominated by a few large companies, and the program consistently failed to encourage the deployment of new anti-pollution technologies. “The beauty of trading,” explains Syracuse University law professor David Driesen, who has written extensively on the subject, “is that it encourages cost effective measures that really don’t change anything.”

The Kyoto Protocol expands this flawed model to a grand international scale, representing, according to Larry Lohmann, “one of the largest schemes for creating property rights in history, [and which] may become the largest market ever created.” Kyoto actually contains three separate processes for creating markets in carbon dioxide emissions and allowing them to be bought, sold and traded on a global scale. The first is relatively straightforward trading of emissions among the 38 largest industrial economies, excluding non signatories, namely the US and Australia. Through this scheme, credits are allocated among countries in proportion to their 1990 emissions, and are in turn distributed free of charge among the leading industrial players in each country. Europe has already set up a trading system that has allocated tradable carbon credits to an estimated 9000 industrial installations; the British component alone, only 3 – 5 percent of the estimated world total, is valued at more than 5 billion euros a year. Since Russia’s level of industrial production has dramatically declined since 1990, with energy production falling by 30 percent, several European countries are banking on meeting their Kyoto obligations largely by investing in excess Russian credits.

The second component of emissions trading under Kyoto is termed Joint Implementation, through which companies gain additional credits for investing in particular low-emission and energy saving projects, usually in second-tier industrial countries such as in Central and Eastern Europe. A central part of the corporate agenda in Montreal was to press for “flexible” rules for the establishment of this secondary market.

The third and most controversial of the Kyoto processes is the so-called Clean Development Mechanism (CDM), through which investors can reap even more carbon dioxide credits by investing in new projects in developing countries that are not yet mandated to cap their emissions. Originally, these credits were to be funded with penalties levied on countries that failed to meet emissions reduction goals, but this provision was dropped in negotiations subsequent to Kyoto. Under CDM, the opportunities for abuse are compounded, as development projects are granted credits based on a hypothetical comparison of their expected outcome, versus a ‘business as usual’ scenario in which the project is not built. Several ventures around the world have already gained financing coupled to the issuance of carbon credits through a Prototype Carbon Fund established in 1999 by the World Bank.

Perhaps the most complex sets of negotiations in Montreal involved the development of detailed rules for determining and certifying which projects are suitable for receiving carbon credits under the CDM. Corporate interests were represented in Montreal by a BINGO (Business-initiated NGO) known as the International Emissions Trading Association (IETA), which boasts an Alcan Aluminum vice president as its chairman, vice chairs from Barclay’s Bank and Shell Oil, and directors from Toyota, BP and Norsk Hydro. With roots in the controversial World Business Council for Sustainable Development, IETA serves as a conduit to assure its over 100 corporate members a prominent seat at every table where the detailed implementation of Kyoto is being discussed.

Greening “Development”?

Among the numerous questionable projects that are eligible for the granting of carbon credits under the CDM are large scale tree plantations throughout the global South. Transnational timber companies promote plantations throughout the world as an alternative to logging native forests, but environmentalists and indigenous activists on the ground tell a very different story. In reality, plantations displace native forests and uproot communities of people that depend on them. Trees have a finite life cycle, and plantation timber is harvested on especially short rotations, hence the idea that plantations ‘sequester’ carbon dioxide is a myth. Wally Menne of Timberwatch in South Africa describes plantations as “green deserts,” encouraging depletion of nutrients, high pesticide use, lowering of water tables, and more frequent wildfires, as well as the loss of traditional livelihoods. Two years ago, parties to the Kyoto Protocol added insult to injury by ruling that even plantations of environmentally threatening genetically engineered trees could qualify for carbon credits under the CDM.

Jutta Kill of SinksWatch in the UK told climate justice activists in Montreal that the vast majority of activities currently being considered for these credits are small scale projects involving the capture of hydroflurocarbons—which are implicated in ozone depletion as well as climate change—and the extraction of methane from landfills. While such efforts are admirable, they get a disproportionate share of credits due to the high carbon-equivalence (heat-trapping capacity) of these gases. They also divert scarce capital from projects that could reap longer-term benefits, especially the development of significant renewable energy resources.

Other projects seeking carbon credits under CDM and the World Bank’s Prototype Carbon Fund have proved far more problematic. Projects cited by Larry Lohmann in a recent article on carbon trading in Science as Culture (September 2005) include a pig iron plant in Brazil that was endorsed by the World Bank’s fund for deciding not to switch from burning wood to coal; a notoriously toxic landfill in South Africa that was granted credits—and thus an extended lifetime—for extracting methane to produce electricity; and a group of UK companies that received more than £100 million in an experimental trading scheme for “keeping emissions down to levels they had already achieved.”

Development projects, and ultimately entire countries, face perverse incentives to exaggerate their “business as usual” baselines—even to increase near-term emissions—so as to improve the ‘carbon economy’ of their activities and reap more emissions credits. If allowed to grow at the pace favored by the business lobbyists of the IETA, emissions trading will inevitably produce scandals that make Enron pale by comparison. “This is one of the greatest scientific frauds of recent times,” Lohmann explained to activists gathered in Montreal. “The only solution is to keep fossil carbon in the ground; anything else is an evasion.”

Still, the idea of buying our way to a greener world remains the ultimate capitalist fantasy, one that holds tremendous appeal for many environmentalists. While environmental groups from WWF to Greenpeace all rushed to celebrate the “success” of Montreal, a nay-saying “free market” think tank was left to distribute mock emissions credits printed on toilet paper inside the official climate conference. A new UK company, Climate Care, has contracted with more than 40 businesses, including British Gas and British Airways, to offer customers the option of supporting energy saving projects in the developing world as a way to ‘offset’ the climate consequences of personal travel, gas and electric use. Efforts like this, however well meaning, help validate the myth that it’s all a matter of personal choice, and ultimately relieve pressure on governments and corporations to take much larger steps toward reducing wasteful energy use.

So did any good come out of Montreal? The answer is a definite “maybe.” The UN climate convention, for all its faults, is the only global forum for attempting to mitigate climate chaos, and the process will now continue beyond 2012, albeit under US-imposed conditions of “no new commitments.” The 140+ countries that have ratified the Kyoto Protocol will continue to move forward more rapidly, under newly adopted rules for administering and monitoring the various trading systems, and Europe will continue to lead the way in deploying renewable energy technologies, so long as they can be shown not to impede economic growth. The Clean Development Mechanism was broadened somewhat, so that policy initiatives toward energy efficiency and curbing deforestation (a priority for several African and Latin American countries), can be accredited along with individual development projects. Funds were allocated to support a new adaptation fund to support both planning and action to mitigate the effects of climate changes. Whether all these measures will actually help stabilize the climate is anyone’s guess.

In the US, the most promising initiatives are at the local level. The mayors of 195 cities, both large and small, have signed a pledge, initiated in Seattle, to reduce greenhouse gas emissions to 7 percent below 1990 levels by 2012. The pledge calls for comprehensive changes in land use, transportation and energy policies, sustainable building practices, energy conservation, and public education initiatives.

More guardedly, seven Northeastern states signed a compact in December committing them to modest reductions in carbon dioxide emissions by 2020, implemented via a regional trading system. That agreement was almost derailed when Massachusetts Governor Romney withdrew, citing insufficient protections for local businesses; the press viewed this as a slap at New York Governor Pataki, one of Romney’s expected competitors for the 2008 Republican presidential nomination. In California, which has defied the national trend by continuing to reduce per capita carbon dioxide emissions, Governor Schwarzenegger announced a plan for statewide reductions of 11 percent by 2010 and 80 percent by 2050. Critics are skeptical, however, whether California, with its fast-growing economy and population, will actually meet these targets.

Clearly, across the US, as in much of the industrialized world, modest reductions in greenhouse gases are popular with a broad, environmentally aware public. But it is clear that more fundamental changes are needed to head off the worst consequences of global climate disruption. Analysts such as Colorado’s Amory Lovins have been arguing since the late 1970s that rather drastic reductions in energy use are possible with existing technology and minimal lifestyle changes. But implementing these changes will require much more than demonstrating their theoretical feasibility. As long as energy and environmental policies are governed primarily by “free markets” and profit-oriented trading schemes, it is clear that we still have a very long way to go.

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