The way in which the crusade for a global treaty to prevent catastrophic climate destabilisation is being hijacked and degraded is truly terrifying. Not only are countries seeking to escape their reduction obligations by buying carbon credits elsewhere, resulting in paper transactions with no benefit for the climate, but they are also demanding that credits be awarded for practices that are destructive or just plain absurd. The ambitions of the biotech and nuclear industries to hitch a free ride by jumping onto the Kyoto Protocol bandwagon fall under this category. Both sectors claim that their controversial technologies are fully eligible for carbon credits and subsidies from the Clean Development Mechanism. The International Primary Aluminium Institute also falls under the absurd category with its claim that the substitution of aluminium for heavier materials in cars reduces CO2 emissions from car use, elegantly avoiding the uncomfortable fact that aluminium production is one of the most energy-consuming industrial activities. [31] Anticipating the huge profits that can be reaped from the commercialisation of the atmosphere, a new industry is emerging- the global greenhouse gas emission brokers.

Hot Air Trade

The best-known form of climate corruption with candidature for inclusion in the Kyoto Protocol is the trade in 'hot air'- spare emissions permits offered up for sale. The amount of hot air that can be bought in the global carbon market could be large enough to allow the US to meet nearly all of its Kyoto commitments by doling-out money for permits, without having to spend a cent on reducing emissions at home. Major providers of hot air will be Russia, the Ukraine and Kazakhstan, the CO2 emissions of which are some 45% below 1990 levels. [32] These cash-strapped countries are eager to offer their massive surplus emissions rights in return for hard currency. Trade in hot air could reach some US$30 billion per year. [33] As the buying and selling of hot air does nothing to help global warming, this form of climate fraud will undoubtedly lead to a net increase in emissions rather than the 5.2% reduction that is the Kyoto target. [34]

EU countries have also entered the hot air game. The UK government, which has reduced its CO2 emissions beyond its Kyoto commitments and plans to sell the difference, has announced that it will offer CO2 credits worth one billion pounds to the US and other potential buyers. This is a clear case of climate fraud, as the reduction is a side effect of closing down coalmines and instead pumping up more natural gas - which is only slightly less damaging to the climate - from the North Sea. [35] Rather than letting the climate benefit from this reduction, the UK hopes to cash in and sell its 'right to pollute'.

Bubble Economy

It is not only governments that can trade emissions permits and carbon credits- corporations can also get in on the act. Corporations have already started trading emissions, reaching trading volumes worth 50 billion US$ in 1999. [36] The emissions trading market could swell to astronomic proportions. The Electric Power Research Institute, for instance, estimates that the total value of carbon dioxide permits could be $13 trillion by 2050. [37] This explains the explosive emergence of a global market for emissions, despite the fact that the Kyoto rulebook is yet to be finalised. The World Bank has established a prototype Carbon Fund that mobilises funds from Northern governments and corporations and pumps them into projects in Southern countries. The World Bank in return pays out carbon credits, related to the emissions reductions achieved, as dividend to the investors. Among the first investors in the Bank's Carbon Fund were the Dutch government and corporations such as Mitsubishi and Shell. [38] The World Bank also hopes to land a role in running the CDM, a rather shameless ambition considering the institution's continued promotion of fossil fuel dependency in the South. The Bank aggressively promotes the privatisation of the energy sector, and a mere 1.4% of its lending for energy projects between 1980 and 1997 involved renewables. [39]

Governments and corporations investing in the World Bank's Carbon Fund are rewarded with cheap carbon credits, but taking the lead also de facto means developing the rules of the game and exploring where and how the largest profits can be made down the road. Meanwhile, UNCTAD, the UN agency for trade and development, has assisted in the creation of the International Emissions Trading Association. This partnership with players such as the Australian Stock Exchange, the International Petroleum Exchange, Shell, BP Amoco, Statoil and Tokyo Electric Power, aims to create a global emissions market, with or without the Kyoto Protocol. [40] Both BP Amoco and Shell have adopted internal emissions trading systems, and the companies are developing plans for CDM projects. In its distorted interpretation of what is clean and climate-friendly, Shell is betting on earning emissions credits by supplying more natural gas for heating and power and liquefied gas for cars, and by building gas-fired power plants.

Carbon 'Casino Capitalism'

The dominance of emissions trading within the climate change negotiations has given rise to a new, fast-growing profession- emissions brokers. SGS Group (Societe Generale de Surveillance), Trexler and Associates, Winrock International, Evolution Markets LLS and other 'greenhouse gas credit brokers' identify projects that are eligible for receiving carbon credits and help buyers and sellers get together. "What we are seeing is a convergence of capital and environmental markets," Richard Sandor of the Environmental Financial Products Company told the Financial Times. [41] Like other global financial markets, the emissions market will also feature transactions that are purely speculative. Trading house Mitsubishi, for instance, envisages "a business in which we purchase emission rights at low prices and sell them at higher prices for profit." [42] "The potential rewards for smart players in the field are enormous," according to Natsource, a New York-based "over-the-counter broker of energy derivatives." [43] Not only will emissions credits be traded, their derivatives will also constitute a billion dollar market. [44] Hedge funds will also undoubtedly find a niche, as will speculating in 'futures' and 'options'. There is a real danger that the entire range of controversial speculative instruments known from the global financial markets could emerge in the emissions trading game.

Sinks: Soil, Agriculture and Forests

"We have been saying all along sinks are important, sinks are important, sinks are important. The administration seems to be coming our way."

- Frank Maisano, Global Climate Coalition. [45]  

The US has repeatedly threatened not to ratify the Kyoto Protocol unless carbon sinks are included. The reason for this obstinacy is that the US administration expects that 'sinks' may cover up to half of its annual reduction obligations by 2010. [46] US agri-business corporations, with Monsanto leading the pack, see 'carbon sequestration' as a highly lucrative new market and have lobbied hard to get the US government to defend forests and farm land 'sinks' as a source of carbon credits. At Monsanto, there is great excitement about the expanded sales of 'climate-friendly' Roundup herbicide and genetically modified Roundup Ready seeds, not to mention the future earnings potential of marketing genetically modified crops with a higher carbon absorption capacity.         

The Canadian government is eagerly pushing for measures that would enable governments to receive credit for carbon stored in forests, soils and wood products. The Canadians want to include all kinds of carbon sinks imaginable, including carbon stocked in wood products like furniture and houses and even paper stored in landfills! However, the West Coast Environmental Law Association concluded in a recent study that giving "credit generated by sequestration that will happen in any event will allow more greenhouse gases to enter the atmosphere." [48] Allowing sinks would enable Northern countries to emit some 12.5% more greenhouse gases than permitted under the Kyoto Protocol. [49]

Growing trees to remove CO2 from the atmosphere by allowing it to be absorbed in the wood may sound benign, but in fact this scheme is quite dodgy. [50] There is serious scientific uncertainty about the capacity of forests to act as stable carbon sinks, and it is moreover virtually impossible to adequately measure the sequestered carbon. [51] Beyond this, the promoters of carbon sinks deliberately ignore the very destructive impacts of large-scale industrial tree plantations around the world. These plantations cause significant social and environmental upheaval by displacing communities, aggravating inequalities in land ownership, encouraging deforestation, destroying animal and plant diversity and depleting water resources.

Climate Change: a Comeback for Nuclear Energy?

Climate change offers the last window of opportunity for a nuclear comeback in Europe, where many countries intend to shut down nuclear power plants and some have opted for complete nuclear energy phase-outs. The Clean Development Mechanism (CDM) might, however, breathe new life into the nuclear industry. This industry, supported by the US, Japan and other Northern governments, is lobbying for the inclusion of nuclear technology as one of the possible options for the CDM, which would give a massive boost to the proliferation of nuclear power plants around the globe. Some influential Southern governments, like China and Brazil, are also in favour of including nuclear energy projects within the CDM.

Greenpeace has calculated that carbon credits could reduce the construction costs of new nuclear power plants in China by between 10 and 40%. ["UK Hopes to Win Carbon Credits Deal With China", The Guardian, 23 May 2000] The nuclear industry itself believes that the percentage might be even higher. ["The Influence of Climate Change Policy on the Future of Nuclear", Jonathan Cobb, speech at the Uranium Institute's Twenty Fifth Annual International Symposium 2000] In short, this would turn the Clean Development Mechanism into a new subsidy for the nuclear industry. ["Row over Role of Nuclear in Climate Treaty", ENDS Daily, 10 March 2000] Predictably, the nuclear industry callously views climate change as "the best friend we have had in the past 40 years". [61]

The EU opposes nuclear energy in the CDM, and is arguing for the inclusion of a list of 'positive technologies' like renewable energy projects and energy efficiency and demand management schemes. Its position is however weakened by the fact that the UK and France fully support the incorporation of nuclear energy into the CDM. [62]

The UK government is in fact encouraging British Nuclear Fuels to build nuclear power plants in China, through which the UK would earn carbon credits. Within the European Commission there is also growing support for the idea that nuclear energy is necessary for fulfilling the EU's greenhouse gas reduction commitments, a position publicly defended by the EU Commissioner for Energy Policy and Commission Vice President Loyola de Palacio. [63]

What the nuclear lobby conveniently neglects to mention is that nuclear power is indirectly responsible for colossal CO2 emissions through its energy-intensive activities such as the construction and decommissioning of reactors; the extraction, processing, transport and reprocessing of nuclear fuel; and the storage and treatment of nuclear waste. Furthermore, nuclear power is the least cost effective - not to mention the most dangerous - method of producing electricity. It is no coincidence that the clearest voice against the infiltration of the CDM by nuclear energy comes from the Association of Small Island States (AOSIS), the member countries of which are first-hand witnesses to the dangers of nuclear waste transport. [64]

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