The World Bank sees money in emissions trading

Daphne Wysham is the co-author of a recent report, The World Bank and the G-7: Changing the Earth's Climate for Business . She is also the coordinator of the sustainable energy and economy network, a project of the Washington-based Institute for Policy Studies. Nikhat Jamal Qaiyum spoke to her at the recently-concluded Fourth Conference of Parties (CoP-4) to the United Nations Framework Convention on Climate Change (UNFCCC) in Buenos Aires

Published: Sunday 31 January 1999

On the lopsided negotiating position of the US at CoP-4:
The us position in the climate talks is an extension of the belief that the free market can solve the problem that the free market has created. The us is pushing hard to globalise emissions trading, because big industries, whose interest they want to protect, claim that free market in "pollution credits" is more successful than regulation ever would be. The us negotiators don't seem bothered about how this system has affected the average American, much less the environment.

On why the US emissions trading logic is flawed:
There are two major flaws in the emissions trading system in the us . Firstly, some studies reveal how the supposed emission reductions that are taking place in the us have happened because of an increase in the baseline (the reference point for reduction) before the so-called emission reductions were achieved. It is analogous to what happens in California, when there is a water shortage. As the situation gets dryer, everyone knows that they will soon have to reduce from their average consumption levels. So what happens is that everyone consumes more water, so that when they have to reduce, they reduce from an artificially inflated level of consumption. With regard to climate change, there is a shortage of what the atmosphere can absorb. But can we trust the wealthiest corporations and the government not to do what the average Californian would do in a water crisis?

Secondly, domestic emissions trading norms assume that you have a right to pollute, but not that you have a right to live without pollution. Why should the right for corporations to pollute be enshrined in international law in the form of legalised emissions trading?

On why the US is saying no to a limiting 'cap' on emissions trading:
A memo of the World Business Council for Sustainable Development ( wbcsd ) shows that 'no-caps' (on reductions through the mechanisms) is the cheapest way for transnational corporations to achieve the Kyoto Protocol commitments. They are, therefore, putting pressure on negotiators to insist on 'no caps'. It is clearly evident that the political system in the us is manipulated by the moneyed interests.

The wbcsd , which started in 1972, has roughly 200 members, all of whom are chief executive officers ( ceo s) of the largest transnational corporations. They include Mobil, General Motors, Ford, Chrysler, Amoco, Monsanto, DuPont, Occidental, International Telegraph and Telephone and ibm . Their ability to manipulate the policies of the us on climate change will have global consequences.

On what the us public feels:
The us public overwhelmingly wants action on climate change. But they are not being given correct information or options. There is a misinformation campaign in the us which has been spread by the fossil fuel lobby. They allege that this is a Third World plot to rob them of their money.

On the larger picture of money politics:
Development institutions are losing sight of their mandate because there is so much money to be made out of emissions trading. Everyone -- from the wb and the European Bank for Reconstruction and Development ( ebrd ) to the United Nations Commission on Trade and Development ( unctad ) -- wants a piece of the pie. There is an enormous perverse incentive to develop fossil fuel-based industries in developing countries because banks like the wb and the ebrd get repaid, relatively quickly, in hard currency. Additionally, if they capture carbon permits from these same projects in developing countries, they can make much more money by selling it to the industrialised countries. Global emissions trading will result in the migration of energy-intensive and toxic industries to the poorest regions of the South.

On how the WB proposes to capitalise on an international market for emissions trading:
The wb proposes to collect a five per cent commission on all transactions through its Prototype Carbon Fund, which had been kept under wraps at Buenos Aires. This is because even the us government has voiced concern that this development represents an enormous conflict of interests. Their own internal documents show that by the year 2005, the wb expects to make us $100 million from a global carbon transaction volume worth us $2 billion. The wb 's documents suggest that the cost of climate action to the Organisation for Economic Cooperation and Development ( oecd ) countries with emissions trading by 2020 will be us $150 billion and without emissions trading it will be three times that or us $450 billion.

Subscribe to Weekly Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.