What Next: Climate, Development and Equity

A copy of this arrived in my post box yesterday.

It can arrive in yours too if you contact info [at] whatnext.org, or request via the website of the Dag Hammerskjold Foundation.

That site also offers a free download, as does the What Next Forum.

I've contributed a chapter on carbon trading, which surveys the latest in the EU Emissions Trading System and the (near-)collapse of the Clean Development Mechanism, as well as explaining how carbon is actually traded.

There are many excellent chapters. I'm still working my way through, but Kevin Anderson's chapter (based on a talk that you can listen to and watch a slideshow of here), and Dale Wen's article on China.

Full contents are:

Foreword John Vidal

Introduction Niclas Hällström

Part I » Setting the Context – Climate, Development and Equity Challenges

Climate change going beyond dangerous – Brutal numbers and tenuous hope
Kevin Anderson............................................................................... 16

Climate debt – A primer
Matthew Stilwell.............................................................................. 41

The North-South divide, equity and development – The need for trust-building for emergency mobilisation
Sivan Kartha, Tom Athanasiou and Paul Baer.................................... 47

Part II » The Climate Negotiations

A clash of paradigms – UN climate negotiations at a crossroads
Martin Khor ...................................................................................76

Why Bolivia stood alone in opposing the Cancun climate agreement
Pablo Solón................................................................................... 106

‘The Great Escape III’
Pablo Solón................................................................................... 108

What happened in Durban?......................................................... 110

Weak ambitions and loopholes.....................................................115

India and Africa at COP 17 – The false dichotomy of ‘survival vs.development’
Sivan Kartha...................................................................................118

Climate finance – How much is needed?
Matthew Stilwell............................................................................ 120

China and climate change – Spin, facts and realpolitik
Dale Jiajun Wen............................................................................. 125

Climate change, equity and development – India’s dilemmas
Praful Bidwai................................................................................. 147

Part III » What Next? – On Real and False Solutions

Climate as investment – Dead and living solutions
Larry Lohmann............................................................................. 164

What goes up must come down – Carbon trading, industrial subsidies and capital market governance
Oscar Reyes...................................................................................185

Darken the sky and whiten the earth – The dangers of geoengineering
ETC Group – Pat Mooney, Kathy Jo Wetter and Diana Bronson....... 210

Ecological agriculture, climate resilience and adaptation – A roadmap
Doreen Stabinsky and Lim Li Ching.............................................. 238

A global programme to tackle energy access and climate change
Tariq Banuri and Niclas Hällström................................................. 264

Reclaiming power – An energy model for people and the planet
Pascoe Sabido and Niclas Hällström............................................... 280

Part IV » Movement Towards Change

Beyond patzers and clients – Strategic reflections on climate change and the 'Green Economy'
Larry Lohmann............................................................................. 295

Civil society strategies and the Stockholm syndrome
Pat[zer] Mooney............................................................................ 327

Leaving the oil in the soil – Communities connecting to resist oil extraction and climate change
Nnimmo Bassey............................................................................. 332

Riding the wave – How Transition Towns are changing the world and having fun
Teresa Anderson............................................................................. 340

Contributors................................................................................. 348

Glossary....................................................................................... 352


 

Blogging and tweeting from Rio+20

I'll be blogging for the Institute for Policy Studies from Rio+20.

My first post, asking "What's at Stake with the Green Economy" is now online here. It claims that simply obtaining measures to implement the commitments made 20 years ago would be better than creating any new corporate-driven initiatives or issuing yet more empty promises.

The post also highlights and links to some key reading ahead of the Rio Summit.

I'd also recommend following the blogs from the World Development Movement.

And finally... I appear to be the latest victim to succumb to twitter, where I'm tweeting from #Rioplus20 as @_oscar_reyes

World Bank Group Environment Strategy 2012 – 2022 at first glance

Rather than waiting on the outcomes of Rio+20, the World Bank has announced just announced it’s new environment strategy for the next decade. The full document can be downloaded here. Here are some very rough notes, on first reading, for anyone who's interested in this type of thing:

• There seems to be a very weak interconnection between the Bank's environment strategy and its “core infrastructure business,” beyond some waffley rhetoric. Further work is needed to see how the environment strategy maps onto and relates to Bank’s energy and infrastructure strategies.
• The Strategy assumes a continuing (expanded?) role for the Climate Investment Fundss – with no “sunset” in sight. By way of background, these controversial funds were started with a "sunset clause," which should mean that they disappear once a Green Climate Fund is up and running.
• Wealth Accounting and Valuation of Ecosystem Services (WAVES) is the first of 7 strategic focusses identified in the Strategy. The Bank looks set to push policy advice that “focuses on the value of natural capital and integration of “green accounting” in more conventional development planning analysis. ” Very briefly, this approach looks to have elements of a positive framing (moving beyond GDP as a measure) but is ultimately wound back into a policy-promotion framework that encourages the financialisation of nature. The WAVES framework (the first phase of which is funded by the UK’s DfID) is something the Bank looks keen to launch at Rio, in the form of proposing “an international program of action on Ecosystem Accounting” at the Summit.
• “Blue carbon” (relating to coastal regions and wetlands) is increasingly a part of the Bank’s “green” agenda; while soil carbon is a critical concern for the Bank’s work in Africa.
• There’s a lot on REDD (Reducing Emissions from Deforestation and Degradation) and some “innovations” to support REDD are foreseen. These include “wildlife premiums” (Zoellick’s proposal from Cancun on “charistmatic species”) as well as instruments (including bonds) that could support a REDD market in the current context of virtually non-existent demand for credits
• Despite the obvious failings of carbon markets, the Bank shows no sign of retreat (it currently holds a $2.7 billion portfolio of carbon funds). Quite the opposite, in fact: “Developing access to carbon finance for low-income countries will be the centerpiece of the WBG’s strategy.” (p.61). The Bank envisages a 3-fold approach: (1) encouraging policies and simplified regulations to “accelerate speed to market” (irrespective of contradictions with environmental integrity); support for developing countries’ development of “capacity, technical knowledge, and carbon market infrastructure”; and support for “building up the potential supply for a scaled-up future carbon market” so as to “avoid possible future market dysfunctions resulting from supply shortages. ” Setting aside all of the major critiques of carbon markets for a moment, this is quite an extraordinary and unjustified focus given the obvious over-supply problems that the market faces.
• The WB highlights the following carbon funds as key in moving forwards: Carbon Partnership Facility (including support for sectoral approaches), Forest Carbon Partnership Facility (REDD readiness), Partnership for Market Readiness (piloting new market instruments, and “increasingly... examining the possibilities for carbon trading between domestic markets on a bilateral or multilateral basis. ”); BioCarbon Fund Tranche 3 (BioCF T3) (next generation): (including developing new methodologies for forestry and agriculture); Carbon Initiative for Development (CI-Dev) (capacity building, technical assistance, and financing to the seller entities behind the programs).
• This confirms a trend that’s already been apparent for the last couple of years – namely, that the Bank is shifting it’s emphasis beyond project-based funding to support new market infrastructures across whole economic sectors, plus putting guarantees/funding to the investors (rather than purchasing credits directly).
• The IFC is becoming more involved in climate-related activities. “While the IFC’s investment and advisory work in energy efficiency, renewable energy, and resource efficiency will remain the mainstay of its climate change activities, it also aims to grow its Cleantech venture investment portfolio. ... The IFC is working on several initiatives to mobilize commercial and concessional funding to support private sector climate investments in the form of equity, debt, and technical assistance.” It will also build on its post-2012 Carbon facility (which targets European utilities and energy companies).
• Carbon neutral greenwashing is being upscaled (p.63) : “As with the headquarters, the carbon emissions of country offices will also be offset, along with emissions from staff travel. ”
• Climate risk insurance (p.64) is likely to form a key part of the Bank’s adaptation agenda

UK aid to Morocco will fund electricity for Europe

Money taken from the UK aid budget is to be used by the World Bank to finance the Ouarzazate solar project, designed to prioritise export to Europe rather than to ensure that ordinary Moroccans can access affordable electricity.

The project is part funded the World Bank’s Clean Technology Fund, which receives 14 per cent of its money - or £385 million – from the UK overseas aid budget.

Investment in renewable energy is essential to the fight against climate change. But measures to tackle climate change will only work if they also address poverty and inequality. By setting in place an export-led model that is likely to see electricity costs for the Moroccan people increase, and by asking the Moroccan government to subsidise the creation of a risky mega-project, Ouarzazate could make it more difficult for ordinary Moroccans to access electricity, especially in rural areas. And yet the project is being funded from the UK’s overseas aid project, the very purpose of which is to reduce poverty.

You can read this new report, published by the World Development Movement, by following this link.

It's the second in a series called Power to the People?, looking at the World Bank's Clean Tech Fund. The first report, on a wind project in Mexico, can be found here.

World Bank State and Trends of the Carbon Market 2012: market growth is more spin than substance

The World Bank's annual State and Trends of the Carbon Market report is out, and can be found here:

It's a very useful source of data which, like all WB stuff, needs to be treated with caution. The spin is all about a growing carbon market, rising to $176 billion, an 11% increase on the previous year's figures for 2010. (see, for example, how Reuters picked it up) However, it is worth noting that :

• The largest proportion of the "carbon market growth" is accounted for by a change in how the World Bank counts the figures, the explanation for which is buried in an annex: “Instead of using external data, however, in 2012 the authors calculated the volumes and values for 2010... . The calculation resulted in higher volumes and values, particularly for EUA and secondary CER transactions. Instead of the global carbon market of US$142 billion reported in 2010, the revised calculations resulted in a global carbon market that is greater by about US$17 billion year on year (yoy). A higher value in the EUA market accounted for about US$14 billion, 80% of the difference. This year’s calculation also resulted in a secondary CER market greater by US$2 billion in 2010 yoy. The remaining differ- ence is explained by the value of the post-2012 CER transactions, not reported last year, which reached over US$1 billion in 2010. ” (p.124) 
• That said, the market still grew a bit, and the reason given for that is a rise in hedging and speculative trades: “Trading volumes soared in 2011, coinciding with the second decline in verified emissions in three years. A considerable portion of the trades is primarily motivated by hedging, portfolio adjustments, profit taking, and arbitrage." (there's quite a useful box explaining this around p.39) 
• It's also worth noticing that the Bank has massaged the figures to overcome the embarrassment of a shrinking CDM Last year's "primary" CDM market (ie. the value of the credits generated by projects; rather than the cumulative value of further trading in these credits) was $900 million, the lowest ever (comparisons below - figures in US$billions) 

  2011	0.9
  2010	1.5
  2009	2.7
  2008	6.5
  2007	7.4
  2006	5.8
  2005	2.6

• The Bank then boosts this figure by adding another $1.9 billion for forward pCER post-2012" value - "call options" on credits that are not yet issued. Put simply, it's counting an option to buy a credit that does not yet exist as part of the value of the CDM. A lot of carbon is actually traded this way, although the press doesn't exactly get very far in explaining this. But the real massaging of the figures is revealed here (p.49) : “without a brighter market outlook, it is unlikely that a substantial proportion of these post-2012 ERPAs will be exercised at the indicative prices and volumes established in these documents. ” (ie. the figures written to Emissions Reduction Purchase Agreements, which are the basis for this $1.9 billion, would generally - I'd wager almost exclusively - mean that options would not be taken up with CDM credits going for less than €3.50 per ton, as at present). 
• With the CDM, too, the story is one of greater financialisation. The biggest trade in CDM credits passes through the UK and Switzerland (where a lot of the financial intermediaries are based "Entities in the UK transacted the largest share, accounting for 47Mt or 39% of pre-2013 pCERs and 44Mt or 26% of post-2012 pCERs. The primary catalyst for this was the high concentration of buyers in the UK. However, a large portion of these vol-umes are known to be redistributed upon deliv-ery. Switzerland had a robust increase in 2010 and in 2011 in both pre-2013 and post-2012 markets compared to previous years. The Swiss market share came right after the UK, for the same reasons as the latter." (p.55)

Carbon Markets After Durban - The Atmosphere Business

The most recent issue of the journal ephemera is a special issue on “The atmosphere business”. It takes a critical look at "climate capitalism". My contribution on "Carbon Markets after Durban" can be found here It starts out fro, the contradiction of the push for new market mechanisms in the context of offset prices crashing to all-time lows and carbon branded the ‘world’s worst performing commodity’.

After COP17: Where now for civil society engagement in UNFCCC climate negotiations?

I recently contributed to a report, commissioned by Earthlife Africa Johannesburg , to reflect on civil society’s impact on the United Nations Climate Change Conference (COP17) in Durban, and to spark an internal reassessment of global civil society’s actions towards the UNFCC; for whatever we are doing, it is not working.

If there is a single message about the engagement with the United Nations Framework Convention on Climate Change that comes out of this report, it is that civil society should stop looking at the COP process as a “quick fix” for climate change. Instead, civil society needs return to the hard, expensive and time-consuming work of grassroots mobilisation to create real and substantial mass movements that have the sheer weight of numbers to force change. National governments need to go to a COP knowing that their populaces want a global deal on climate change and will not take kindly to them returning from a COP with only empty promises and a hollow text.

The full report can be downloaded from here.

After Durban: All talked out?

The current issue of Red Pepper includes my assessment of the COP17 UN Climate Change Conference in Durban. Read the full article here


If a lexicon of international climate conferences is ever written, Durban will be listed right after the words debacle, delusion, disaster and disillusionment. Even the disappointments were not surprising at the 17th Conference of the Parties of the United Nations Framework Convention on Climate Change, which took place in South Africa last December. Instead, they followed the usual script: two weeks of ineffectual jargon-filled bickering followed by an agreement to delay action on climate change beyond the political lifespan of most of the governments present

Paying the polluters: EU emissions trading and the new corporate electricity subsidies

Industry lobbying on EU climate policy looks set to secure further subsidies for energy-intensive industries through the reform of State Aid, according to a new report, Paying the Polluters: EU emissions trading and the new corporate electricity subsidies, published by Corporate Europe Observatory and Carbon Trade Watch. The report shows how the Commission's proposals have opened the door to millions of euros of subsidies to help some of the biggest polluters pay their energy bills.

Read the full report here.

EU on Kyoto: not really an "agreement"

Isn't it funny how, when it comes to determining how to interpret EU emissions trading rules, the Durban Package is insufficient to be defined as an "international agreement"

http://ec.europa.eu/clima/news/articles/news_2012011101_en.htm

The adoption of a second commitment period of the Kyoto Protocol without a legally binding agreement for the period beyond 2012 under which other developed countries commit themselves to comparable emission reductions and economically more advanced developing countries commit themselves to contributing adequately according to their responsibilities and capabilities is therefore not an international agreement as referred to in Article 11a(7) of the EU ETS Directive and Article 5(3)of the Effort Sharing Decision.