The 'obscenity' of carbon trading
Kevin Smith is a researcher with Carbon Trade Watch, a project of the Transnational Institute which studies the impacts of carbon trading on society and the environment. He wrote the following essay for the BBC's series The Green Room. In it, he expresses the view shared by many that neo-liberal economic mantras are not the way forward to mitigate climate change or to bring environmental and social justice to the Global South.
If we want to curb climate change, carbon trading won't do, argues Kevin Smith in the Green Room this week. From the Stern Review to Europe's Emissions Trading Scheme, he argues, the aim of reducing emissions has been perverted by neo-liberal dogma and corporate self-interest.
In 1992, an infamous leaked memo from Lawrence Summers, who was at the time Chief Economist of the World Bank, stated that "the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable, and we should face up to that".
The recently released Stern Review on climate change, written by a man who occupied the same position at the World Bank from 2000 to 2003, applies a similar sort of free market environmentalism to climate change.
Sir Nicholas Stern argues that the cost-effectiveness of making emissions reductions is the most important factor, advocating mechanisms such as carbon pricing and carbon trading.
While dumping toxic waste in the global South might look like a great idea from the perspective of the market, it ignores the glaringly obvious fact of it being hugely unfair on those getting dumped upon.
In a similar way, Stern's cost-benefit analysis reduces important debates about the complex issue of climate change down to a discussion about numbers and graphs that ignores unquantifiable variables such as human lives lost, species extinction and widespread social upheaval.
'Junk economics'
Cost-benefit analysis can be a useful tool for making choices in relatively simple situations when there are a limited number of straight-forward options to choose from:
biomass :: bioenergy :: biofuels :: energy :: sustainability :: climate change :: carbon trading :: ETS :: neo-liberalism ::
But as Tom Burke, visiting professor at Imperial College London, has observed: "The reality is that applying cost-benefit analysis to questions such as [climate change] is junk economics... It is a vanity of economists to believe that all choices can be boiled down to calculations of monetary value."
Some commentators have applauded the Stern Review for speaking in the economics language that politicians and the business community can understand.
But by framing the issue purely in terms of pricing, trade and economic growth, we are reducing the scope of the response to climate change to market-based solutions.
These "solutions" take two common forms:
* under emissions trading, governments allocate permits to big industrial polluters so they can trade "rights to pollute" amongst themselves as the need arises
* another approach involves the generation of surplus carbon credits from projects that claim to reduce or avoid emissions in other locations, usually in Southern countries; these credits may be purchased to top up any shortfall in emissions reduction
Such schemes allow us to sidestep the most fundamentally effective response to climate change that we can take, which is to leave fossil fuels in the ground. This is by no means an easy proposition for our heavily fossil fuel dependent society; however, we all know it is precisely what is needed.
What incentive is there to start making these costly, long-term changes when you can simply purchase cheaper, short-term carbon credits?
Forcing the market
In the current neo-liberal economic environment, trading rules inevitably succumb to the pressures of corporate lobbying and deregulation in order to ensure that governments do not "interfere" with the smooth running of the market.
We have already seen this corrosive influence in the European Union's Emissions Trading Scheme (ETS), when under corporate pressure, governments massively over-allocated emissions permits to the heaviest polluting industries in the initial round.
This caused the price of carbon to drop by more than 60%, creating even more disincentive for industries to lower their emissions at source.
There are all manner of loopholes and incentives for industry to exaggerate their emissions in order to receive more permits and thereby take even less action.
Market analyst Franck Schuttellar estimated that in the scheme's first year, the UK's most polluting industries earned collectively £940m ($1,792m) in windfall profits from generous ETS allocations.
Given all we know about the link between pollution and climate change, such a massive public concession to dirty industries borders on the obscene.
We are being asked to believe that the flexibility and efficiency of the market will ensure that carbon is reduced as quickly and as effectively as possible, when experience has shown that lack of firm regulation tends to create environmental problems rather than solve them.
Community interest
There is a groundswell of opinion that the "invisible hand" of the market is not the most effective way of facing the climate challenge.
The Durban Declaration of Climate Justice, signed by civil society organisations from all over the world, asserts that making carbon a commodity represents a large-scale privatisation of the Earth's carbon cycling capacity, with the atmospheric pie having been carved-up and handed over to the biggest polluters.
There is an urgent need for stricter regulation, oversight, and penalties for polluters. Effective action on climate change involves demanding, adopting and supporting policies that reduce emissions at source as opposed to offsetting or trading.
Carbon trading isn't an effective response; emissions have to be reduced across the board without elaborate get-out clauses for the biggest polluters.
There is an urgent need for stricter regulation, oversight, and penalties for polluters on community, local, national and international levels, as well as support for communities adversely impacted by climate change. But currently such policies are nigh-on invisible, as they contradict the sacred cows of economic growth and the free market.
There is, unfortunately, no "win-win solution" when it comes to tackling climate change and maintaining an economic growth based on the ever increasing extraction and consumption of fossil fuels.
Market-based mechanisms such as carbon trading are an elaborate shell-game of global creative accountancy that distracts us from the fact that there is no viable "business as usual" scenario.
Climate policy needs to be made of sterner stuff.
Article continues
If we want to curb climate change, carbon trading won't do, argues Kevin Smith in the Green Room this week. From the Stern Review to Europe's Emissions Trading Scheme, he argues, the aim of reducing emissions has been perverted by neo-liberal dogma and corporate self-interest.
In 1992, an infamous leaked memo from Lawrence Summers, who was at the time Chief Economist of the World Bank, stated that "the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable, and we should face up to that".
The recently released Stern Review on climate change, written by a man who occupied the same position at the World Bank from 2000 to 2003, applies a similar sort of free market environmentalism to climate change.
Sir Nicholas Stern argues that the cost-effectiveness of making emissions reductions is the most important factor, advocating mechanisms such as carbon pricing and carbon trading.
While dumping toxic waste in the global South might look like a great idea from the perspective of the market, it ignores the glaringly obvious fact of it being hugely unfair on those getting dumped upon.
In a similar way, Stern's cost-benefit analysis reduces important debates about the complex issue of climate change down to a discussion about numbers and graphs that ignores unquantifiable variables such as human lives lost, species extinction and widespread social upheaval.
'Junk economics'
Cost-benefit analysis can be a useful tool for making choices in relatively simple situations when there are a limited number of straight-forward options to choose from:
biomass :: bioenergy :: biofuels :: energy :: sustainability :: climate change :: carbon trading :: ETS :: neo-liberalism ::
But as Tom Burke, visiting professor at Imperial College London, has observed: "The reality is that applying cost-benefit analysis to questions such as [climate change] is junk economics... It is a vanity of economists to believe that all choices can be boiled down to calculations of monetary value."
Some commentators have applauded the Stern Review for speaking in the economics language that politicians and the business community can understand.
But by framing the issue purely in terms of pricing, trade and economic growth, we are reducing the scope of the response to climate change to market-based solutions.
These "solutions" take two common forms:
* under emissions trading, governments allocate permits to big industrial polluters so they can trade "rights to pollute" amongst themselves as the need arises
* another approach involves the generation of surplus carbon credits from projects that claim to reduce or avoid emissions in other locations, usually in Southern countries; these credits may be purchased to top up any shortfall in emissions reduction
Such schemes allow us to sidestep the most fundamentally effective response to climate change that we can take, which is to leave fossil fuels in the ground. This is by no means an easy proposition for our heavily fossil fuel dependent society; however, we all know it is precisely what is needed.
What incentive is there to start making these costly, long-term changes when you can simply purchase cheaper, short-term carbon credits?
Forcing the market
In the current neo-liberal economic environment, trading rules inevitably succumb to the pressures of corporate lobbying and deregulation in order to ensure that governments do not "interfere" with the smooth running of the market.
We have already seen this corrosive influence in the European Union's Emissions Trading Scheme (ETS), when under corporate pressure, governments massively over-allocated emissions permits to the heaviest polluting industries in the initial round.
This caused the price of carbon to drop by more than 60%, creating even more disincentive for industries to lower their emissions at source.
There are all manner of loopholes and incentives for industry to exaggerate their emissions in order to receive more permits and thereby take even less action.
Market analyst Franck Schuttellar estimated that in the scheme's first year, the UK's most polluting industries earned collectively £940m ($1,792m) in windfall profits from generous ETS allocations.
Given all we know about the link between pollution and climate change, such a massive public concession to dirty industries borders on the obscene.
We are being asked to believe that the flexibility and efficiency of the market will ensure that carbon is reduced as quickly and as effectively as possible, when experience has shown that lack of firm regulation tends to create environmental problems rather than solve them.
Community interest
There is a groundswell of opinion that the "invisible hand" of the market is not the most effective way of facing the climate challenge.
The Durban Declaration of Climate Justice, signed by civil society organisations from all over the world, asserts that making carbon a commodity represents a large-scale privatisation of the Earth's carbon cycling capacity, with the atmospheric pie having been carved-up and handed over to the biggest polluters.
There is an urgent need for stricter regulation, oversight, and penalties for polluters. Effective action on climate change involves demanding, adopting and supporting policies that reduce emissions at source as opposed to offsetting or trading.
Carbon trading isn't an effective response; emissions have to be reduced across the board without elaborate get-out clauses for the biggest polluters.
There is an urgent need for stricter regulation, oversight, and penalties for polluters on community, local, national and international levels, as well as support for communities adversely impacted by climate change. But currently such policies are nigh-on invisible, as they contradict the sacred cows of economic growth and the free market.
There is, unfortunately, no "win-win solution" when it comes to tackling climate change and maintaining an economic growth based on the ever increasing extraction and consumption of fossil fuels.
Market-based mechanisms such as carbon trading are an elaborate shell-game of global creative accountancy that distracts us from the fact that there is no viable "business as usual" scenario.
Climate policy needs to be made of sterner stuff.
Article continues
Saturday, November 11, 2006
Thai experts call to plant more eucalyptus trees for bio-oil production
Scientist will use the fast pyrolysis process to produce eucalyptus-based biofuel. Fast pyrolysis is a thermochemical bioconversion method in which (renewable) biomass is rapidly heated to 450-600°C in the absence of air. The outcome of the process is bio-oil (70%), char (18%) and bio-gas (12%) (more info at the IEA Bioenergy Task 34 on fast pyrolysis, at the Pyrolysis Network - a global network of researchers and developers of fast pyrolysis, or at the EU's broader ThermalNet, researching thermochemical biomass conversion processes such as gasification, direct combustion and pyrolysis).
The economic viability of fast-pyrolysis technologies mainly depends on the cost of the biomass feedstocks. Tropical countries where forest plantations have high yields and grow very fast, have a competitive advantage over more temperate countries where biomass productivity is considerably lower. This is why fast-pyrolysis is an attractive technology for implementation in the Global South. Case-studies show that developing countries (like Mozambique) can produce a huge amount of bio-oil (up to 3 million barrels of oil equivalent per day), export it over vast distances (e.g. to Rotterdam) and still deliver a fuel competitive with petroleum, with a low GHG and a high energy balance. The reason: they have the agro-climatic, land and labor resources to produce biomass feedstocks (such as eucalyptus) at low costs (the Mozambican case-study - *.ppt)
Nikhom Laemsak knows this and wants a first pyrolysis plant to be built in Roi Et province, which has a wide range of eucalyptus plantations. However, he adds that Thailand would need more eucalyptus supplies if it was interested in producing bio-oil on a large-scale and if it wants to tap crucial scale-advantages.
"The plant would require at least 100 tonnes of eucalyptus a day to generate 75,000 litres of bio-oil, which can be used as a substitute for crude oil in electricity generation and vehicle gasoline", he said:
biomass :: bioenergy :: biofuels :: energy :: sustainability :: eucalyptus :: bio-oil :: pyrolysis :: Thailand ::
Thailand had failed to expand eucalyptus plantation areas due to strong opposition from environmentalists and local people, who claimed that the tree contains toxic substances that reduce soil quality and consume large amounts of water, causing dryness in the area.
Currently, most eucalyptus plantations are located in the northeastern provinces of Roi Et, Khon Kaen, Maha Sarakham, Nakhon Ratchasima and Chaiyaphum, and the eastern provinces of Chachoengsao and Prachin Buri.
Mr Nikhom said the idea of producing bio-oil from eucalyptus trees was in line with the government's policy of increasing the use of renewable energy supplies to 4% of the total energy supply.
Renewable energy use currently amounts to only 1.35% of the energy supply, so a bigger push would be needed.
Gen Chavalit Yongchaiyudh, chairman of the Poverty Eradication Centre, who gave an opening speech at the seminar, backed the eucalyptus and bio-oil initiative.
He said commercial forest plantations would not only become a new source of fuel, but also a source of income for poor people, who could work in the plantations and sell trees to the bio-oil plant.
Article continues
posted by Biopact team at 9:29 PM 0 comments links to this post