‘We have no time for emission offsets’

Why doesn’t carbon trading work?

The basic argument for carbon trade is that since global warming is a worldwide phenomenon it does not matter where the emissions are reduced. But it creates pollution hotspots.

If the larger energy crisis underlying the problem is to be addressed, the entire energy system—how we produce, distribute and use energy—has to change. The use of fossil fuel has to stop. Carbon trading is a cheaper option than such transformation. It allows the North to keep putting off the expensive switch from fossil fuels to renewables while continuing to pollute.

Carbon offsets are part of carbon trade that are mostly visible in the South. They don’t reduce emissions but move emissions to another place. For instance, a reduction through clean development mechanism, or CDM, project in India allows an extra emission by a company in an industrialised country.

What about CDM?

In theory, CDM projects allow entities in the South to reduce emissions against payments and sell the reductions to large corporates in the North, and in the process help the South shift to sustainable energy infrastructure. In reality, CDM is the largest subsidy mechanism for polluters in the South, and its ultimate beneficiaries are the over-consuming countries in the North. Most CDM registered energy projects in the South are not replacing fossil fuels but merely supplementing them. In key CDM countries like China, India and Brazil fossil fuel-powered infrastructures are sometimes directly financed through CDM.

Isn’t it true CDM allows communities in the South to access clean technology?

On the contrary, the communities rarely stand a chance to benefit. They have no resources to enter international negotiations, no money to pay consultants to prepare technological documents, and very few emissions to reduce.

"CDM is the largest subsidy mechanism for polluters in the South. Its final beneficiaries are over-consuming countries in the North"

The basic problem is the host country defines which emissions reduction technology is sustainable. The cheapest are often the worst solutions. Consider clean coal. It is being promoted over transition to solar energy. This time I visited several CDM project locations in India. Their effects are devastating.

At the first super-critical coal power plant in Tiroda (near Nagpur), for instance, CDM is being used to subsidise the construction of a coal power plant. Even seemingly harmless projects like small hydel plants and wind farms are harming the low-carbon way of life of communities by displacing them and destroying their livelihood. What’s worse is that most power produced goes into the grid and then to urban areas, bypassing communities who have to live with impacts like deforestation.

What’s the future of climate deals?

UN climate negotiations have got the wrong end of the stick. They have boiled down to haggling and horse-trading for ‘carbon space’. The South is on the logical ground when it argues that it has used very little of the space historically.

But at the same time, it is selling the space cheap with every offset credit. It is also using up its space fast. Look at the energy patternss of India, China, Brazil and Mexico. In India, Maharashtra alone plans 99 coal-fired projects; Germany and the US plan 30-odd. It is as if climate change is not a reality. All national energy plans, both in the North and South, are based on the assumption that a significant part of our energy will continue to come from fossil fuels.

What is the option before the South?

Negotiate and negotiate harder, not get bullied into selling carbon space or allowing offsets to the North. Rising powers in the South have to show they are willing to embark on an energy path that benefits communities, not just corporations. Of late, there has been very little difference between the stances of the North and South. If Southern countries sanction offsets, it becomes difficuilt for us, the civil societies in the North, to push against the continued overuse of fossil fuels in our countries.