Copenhagen - Rich countries push global suicide pact

“Up to $63 billion of existing residential buildings” in Australia “are potentially at risk of inundation” from rising sea levels by 2100, according to Climate Change Risks to Australia’s Coasts, a report released on November 14 by the CSIRO and the federal government’s Department of Climate Change. The report cites research presented at a Copenhagen climate conference in March which projects that sea levels will rise between 75 cm and 1.9 metres above 1990 levels by 2100. The amount of sea level rise considered most likely – 1.1 metres – puts between 157,000 and 247,600 individual buildings, along with the Sydney and Brisbane airports, at risk, according to the report.

The report goes on to predict that, even with an international agreement that dramatically reduces greenhouse gas (GHG) emissions by the middle of the century, half a metre of sea level rise will still occur by 2100. In this “low” sea level-rise-scenario, coastal flooding “events that now happen every 10 years would happen about every 10 days in 2100. The current 1-in-100 year event could occur several times a year.” The report gives as an example of a “current 1-in-100 year event” the June 8-10, 2007 storm which flooded Newcastle and parts of the Hunter valley, forced thousands of people to evacuate their homes and caused damages exceeding $1.3 billion. On November 17, three days after this report’s warnings were released, a group of reef and climate scientists explained to Australian senators that without global GHG emissions cuts of 25% by 2020 and 90% by 2050, the Great Barrier Reef has only a 50% chance of survival.

The most recent the review of the global climate data undertaken since the UN’s peak scientific body, the Intergovernmental Panel on Climate Change published its report in 2007, was released last month by 26 scientists from eight countries. Titled The Copenhagen Diagnosis, it noted that “‘’Every year this century has been among the top 10 warmest years since instrumental records began.’’ The authors warned that the data now show us that we have underestimated the climate crisis” and predicted an average rise in global surface temperature by 2100 of 7oC if urgent measures were not taken to reduce GHG emissions. Such a rise would have cataclysmic and irreversible consequences for the Earth’s atmosphere, making large parts of the planet uninhabitable and threatening the basis of human civilisation.

Carbon Pollution Reduction Scheme

Amid these warnings of the real dangers that global warming poses, Prime Minister Kevin Rudd and Minister for Climate Change and Water Penny Wong have posed in the media as “green warriors”, battling the global warming “sceptics” of the Liberal and National parties, in their efforts to pass the Carbon Pollution Reduction Scheme (CPRS) through parliament. In reality, however, the CPRS will do next-to-nothing to reduce the risk of climate catastrophe. The real cause that Wong and Rudd are battling for is the profits of the Australian capitalists, including the owners of polluting industries.

The government’s pathetically low targets for GHG emissions reduction are just the beginning of the farce that it is trying to pass off as global warming policy. Compare the global cuts needed to save the Great Barrier Reef to the government’s target of reducing emissions 5% below 2000 levels by 2020 and 60% by 2050. To achieve the 25% global emissions reductions by 2020 needed to save the Great Barrier Reef, developed capitalist countries like Australia, which have more technological capacity to implement renewable energy and higher per capita emissions than the Third World, would actually need to cut their emissions much more than this amount. Indeed, First World cuts of over 40% below 1990 levels by 2020 are needed to save low-lying island countries from inundation and prevent the loss of the Himalayan glaciers, Arctic summer sea ice, the Greenland ice sheet and the Amazon rainforest.

The generosity that the CPRS fails to show towards our ailing global environment is instead lavished upon the capitalist corporations that are causing the problem. The previous version of the legislation that was voted down in the Senate on August 13 would have handed out $16.4 billion in assistance to polluting industries, largely in the form of free permits to emit GHG pollution. Highly-polluting businesses judged by the government to be “trade-exposed” – that is those that compete for profits on an international level – would have received free permits for up to 94.5% of their pollution in the first year of the scheme, with this assistance fading out at a rate of only 1.3% per year. Coal-fired power stations would also have received handouts of free permits to compensate capitalists who want to profit from destroying the environment for any loss of asset value caused by the CPRS.

If the government was genuine about prioritising reductions in GHG emissions, $16.4 billion could fund the replacement of around one quarter of Australia’s coal-fired power generating capacity with solar thermal power plants. That alone would cut Australia’s GHG emissions by 10%, twice the government’s feeble 2020 target. If the $9 billion annual subsidies to fossil fuel industries were redirected to renewable energy and energy efficiency, fossil fuel-fired electricity generation could be abolished in Australia in around a decade, easily reducing emissions by 2020 more than the 40% demanded of rich countries by most Third World governments.

Instead, as part of its deal with Liberal leader Malcolm Turbull to get his support for passage of the CPRS legislation through the Senate, the government has proposed amendments to it that hand out an extra $7 billion to corporate polluters over the next 10 years in direct subsidies and free permits to go on polluting. The November 25 Sydney Morning Herald reported: “The big winners are coal-fired electricity generators. They will receive an extra $4 billion in free permits, taking their overall compensation to $7.3 billion over 10 years. The Opposition had sought $10 billion for the generators over 15 years. The Government will also establish a series of potential protection measures for coal generators — which make up 44 per cent of Australia’s emissions — including loan guarantees. Companies will be able to gain further free permits if they increase energy efficiency in their coal-fired power plants.”

The SMH reported that handouts to coal mining companies will be doubled — to $1.5 billion, and mining companies and manufacturers will get $1.1 billion over two years, on top of free permits, to “compensate” them for electricity price increases. “The natural gas industry also won out, receiving $600 million in extra free permits —- money the Opposition did not ask for in its proposed amendments. Agriculture, as previously announced [by Wong and Liberal negotiator Ian MacFarlane], is indefinitely excluded from the scheme.” Agriculture was the source of 16.3% of Australia’s GHG emissions in 2007, according to the National Greenhouse Gas Inventory.

Emissions trading

But what is most dangerous about the government’s CPRS is its reliance on emissions trading as the main mechanism for “achieving” cuts in GHG emissions. And even more worrying than its plan to apply this method to Australia is the government’s alliance with other rich countries’ governments, such as those of the European Union (EU) and the US, which want to implement emissions trading on an international level. Indeed, the government’s offer to lift its 2020 emissions reduction target above 5% — possibly up to 25% — was conditional on “fully functional global carbon markets”, according to its May 6 document Strengthening Australia’s 2020 Carbon Pollution Target.

But this method has failed and been counterproductive where it has been applied. On a global scale, it would be a disaster. It could allow pollution to actually increase in spite of any supposed target and would prevent the implementation of more straightforward and effective means of reducing emissions. Referring to the First World countries’ push for these false solutions to global warming at the UN’s December 7-18 Climate Change Conference in Copenhagen, Maldives president Mohamed Nasheed warned Third World governments that they were being pressured to sign a “global suicide pact”.

In an emissions trading scheme (ETS), a government or international agreement sets a cap on emissions and then divides this total amount into units, such as tonnes of CO2-equivalent (CO2e). Permits to emit units of CO2e are distributed, through auction or free handout, to GHG-emitting companies, which must surrender a permit for every unit of emissions at the end of each year. Companies that emit less than the permits they hold can sell these permits for additional profit, while companies that fail to keep emissions below the level corresponding to their permits have to buy extra permits or suffer a penalty, such as a fine.

The largest example of an emissions trading scheme in practice is the European Union ETS, which commenced operation in January 2005. A Dangerous Obsession, a research report released in November by the UK Friends of the Earth (FoE), explains that, “Over the period 2005-2007 (covering Phase I of the EU ETS), emissions in the sectors covered by the scheme rose by about one per cent per year when the caps were supposed to have resulted in an overall decline in emissions from sources covered by the scheme. There was a decline in emissions under the EU ETS in 2008. However … the economic contraction in Europe resulting from the global economic downturn is … a significant factor in bringing about the decline.”

In fact, as is pointed out in A Dangerous Obsession, the EU’s emissions reductions since the beginning of 2008 have been no greater than the US’s. This is despite the EU having an ETS and the US not having one. Indeed, overall proportional emissions reductions by companies covered by the scheme since the beginning of 2008 have actually been smaller than reductions by EU-based companies not covered by the scheme! The main reason for the failure of the EU ETS is the over-allocation of permits in both phase I and II of the scheme. This has already resulted in the price of emissions permits collapsing twice, once in 2006 and again in 2008-09. Indeed, the price of permits has never risen high enough to force many companies to take serious action to reduce their emissions, much less make renewable energy production competitive against fossil fuels.


Exacerbating the over-supply of permits in the EU ETS is the use of “offsetting”, through the Kyoto Protocol’s so-called Clean Development Mechanism (CDM). This allows companies or governments in the First World to achieve part of their emissions “reduction” by funding projects in the Third World that supposedly reduce GHG emissions below what they supposedly would have been had the project not been implemented. CDM offset projects don’t actually have to lead to net emissions reductions — they can produce emissions permits simply by reducing otherwise-expected growth in emissions.

As journalist Dan Welch wrote in the May-June 2007 issue of the magazine Ethical Consumer, “Offsets are an imaginary commodity created by deducting what you hope happens from what you guess would have happened.”

As explained in A Dangerous Obsession: “[F]ossil fuel-intensive projects such as new coal-fired power stations qualify for CDM credits as long as they can demonstrate marginal improvements in emissions compared to similar projects nearby. For example, the Tanjavur natural gas combined-cycle power plant in Tamil Nadu, India, claims to reduce carbon emissions by 180,000 tonnes by being cleaner than existing power plants in the region, and so displacing dirtier power from the grid.

“Although it is cleaner, it is still a new fossil fuel power station, average by western standards. In this case the CDM is helping India to copy and lock in to a high-fossil fuel, Western development path, rather than take a low-carbon path. CDM projects can claim to be additional and therefore receive credits if it can be shown that there are no laws requiring the introduction of new technology which would produce the same effect. This has the perverse effect of creating significant incentives for companies planning offset projects under the CDM to lobby against the introduction of new laws, and further incentives for governments hosting such projects not to introduce new laws.”

Offsetting is even having the perverse effect of encouraging capitalist firms to increase polluting activities. According to a July 24, 2007 report from a UK parliamentary committee on a climate change bill, “the economic incentives offered by the CDM appear actually to be encouraging the building of refrigerant plants in the developing world, simply in order that the HFC by-products from the plant can be incinerated, and the credits generated from this sold at a large profit”. But these refrigerant plants produce pollutants other than the powerful GHG HFC-23. Author Larry Lohmann has cited the example of the Indian company SRF, which made a $600 million profit from selling pollution permits after spending $2.2 million installing infrastructure that allows it to burn off HFC-23: “Meanwhile, residents of the area near the SRF installation have complained about chemical leaks which they claim have affected crops and water. Suresh Yadav, a local landowner, said: ‘Fifty per cent of my crops are damaged by the chemicals. Our eyes are pouring, we can’t breathe, and when the gas comes, the effects last for several days.’”

The EU is planning to achieve around half of the emissions “reductions” it intends to offer at the Copenhagen climate conference through offsets. According to ETS S.O.S., a report released in July by the UK-based NGO Sandbag, this will help drive EU companies’ already-huge stockpile of surplus emissions permits to 1.6 billion tonnes of CO2e by 2012. This means that the average ETS-covered EU company could wait until 2016 before having to cut emissions at all. Australia is proposing to meet nearly all of its 5% emission “reduction” target through offsets. A bill currently before the US Senate would establish an ETS that allows 1 billion tonnes of domestic offsets and 1 billion tonnes of international offsets. According to analysis published on May 21 by the US-based progressive think-tank Breakthrough Generation, this would actually allow emissions in sectors covered by the proposed US ETS to rise by 9% between 2005 and 2030.

Rich countries’ responsibility

This makes impossible the goal of having global emissions peak before 2015 and decline thereafter, so as to avoid the likelihood of a global average surface temperature rise of greater than 2oC. To achieve this goal would require immediate, actual, substantial cuts in emissions in First World countries combined with action to stop growth in Third World emissions. The latter would also have to be largely the responsibility of First World governments and companies, through technological, financial and other forms of aid. This is because past First World capitalist plunder and exploitation of the colonies and neo-colonies that now make up the Third World have given the developed capitalist countries a relative monopoly over advanced technology, such as large-scale renewable energy.

This is also a matter of social justice. As detailed in A Dangerous Obsession, “Developed countries, while representing only 15 per cent of the world’s population, have emitted almost three quarters of historic emissions … Per capita emissions in the United States are … nearly four times … [the per capita] emissions … in China, and 20 times … [the per capita emissions] in India.” Offsetting prevents a fair solution because it allows “double-counting”: The (inadequate) technology and funds transfers to the Third World for offset projects are counted as both climate aid and as emissions reductions in the First World. This actually increases the emissions inequality between rich and poor countries. According to FoE’s A Dangerous Distraction report, “Whereas the current per capita consumption in developed countries is at least three times that of developing-country per capita emissions,” global application of offsetting by First World countries at the EU ETS’s current 50% level, “would increase this inequality by a factor of more than eight.”

Some proponents of emissions trading who are critical of the farcical nature of current emissions trading schemes propose that this system could be made better with more regulation – such as reduced reliance on offsets, permit price controls, prohibition of speculation on permits, lower overall emissions caps, etc. However, this perspective is based on the naive view that capitalist governments support emissions trading primarily out of concern for the environment and/or that they are class-neutral bodies that can be “reasoned” with. In fact, they exist to represent the priorities of their capitalist ruling classes – a tiny but economically dominant minority whose chief concern is maintaining a system in which they can continue to profit from the exploitation of labour and the plundering of nature.

Emissions trading is an extension of this priority: It exists, not to save the environment, but to create the appearance of action on global warming while preventing serious impacts on corporate profiteering. As billionaire investor George Soros said at a London School of Economics seminar in July, “The system can be gamed; that’s why financial types like me like it – because there are financial opportunities.” According to A Dangerous Obsession, “The global carbon market has roughly doubled in size every year since 2005. By 2008 it had reached US$126 billion … [G]lobal financial services firm Merrill Lynch has predicted that the global carbon market could be ‘one of the fasting-growing markets ever, with volumes comparable to credit derivatives inside of a decade.’ Some predictions put the global market value at US$3.1 trillion per year by 2020.”

Conveniently, emissions trading and offsetting are — like the credit derivatives markets — so difficult to comprehend that the capitalists have so far largely got away with their scam. In Australia, while a majority of people support action to prevent dangerous global warming, a majority also support the CPRS — a scheme that will impede real action. Even sections of the environment movement have fallen in behind the CPRS. This shows the importance of environmental activists carefully considering the demands around which they try to mobilise the pro-environmental protection majority.

Simply mobilising around vague slogans like “climate action now” or around numerical targets for emissions reduction or atmospheric GHG concentration risks allowing the movement to be co-opted by capitalist politicians and used to support counterproductive policies. Even if the capitalists were to accept a much more stringent ETS than those currently planned or in existence (highly unlikely, given the impact this would have on their profits), this kind of scheme allows large parts of the cost to be passed onto consumers – most of whom are working people – which in turn risks undermining support for action against global warming in general.

Thus, demands for specific measures, such as an end to the thermal coal industry, an emergency program to replace fossil fuels with renewable energy sources and for rich countries (and, particularly, the rich minority within the rich countries) to pay the cost – and of course to reject emissions trading scams – are important. Of course, those with something to lose from the achievement of these demands will tell us that this is impractical, impossible and would destroy the (capitalist) economy. But human civilisation and the natural environment have a much more convincing claim for the right to survive than the capitalist economy. And if when can kick the capitalists out of their power over the world’s industries and governments, the measures necessary would not be impractical or impossible.

A world with clean energy

According to an article in the November issue of Scientific American by Mark Jacobson, professor of civil and environmental engineering at Stanford university, and Mark Delucchi, from the institute of transportation studies at University of California, Davis, currently-available solar, wind and water-based power generation technologies could produce over 620 terawatts (TW) of power globally.

Global electricity generation, transport, heating, cooking, industrial processes, and all other power use is, at most, 12.5 TW in total. Jacobson and Deluchhi suggest that global power consumption for all these purposes could feasibly be provided by renewables by 2030.

They estimate the cost of the necessary infrastructure, including 3.8 million wind turbines, hundreds of thousands of wave and tidal turbines, 1.7 billion rooftop photovoltaic solar panels, and tens of thousands of solar power plants, at around $100 trillion. In 2008 the world’s governments spent $1.47 trillion on their militaries, meaning that Jacobson and Delucchi’s estimate is equivalent to around 70 years’ global military spending. Given that most military forces exist to defend the property of different national gangs of capitalists from each other, the elimination of capitalism would free up the resources to eliminate all fossil fuel use for any reason within this century.

The end of irrational patterns of consumption promoted by capitalism would free up even more resources, thus bringing the end of fossil fuels even closer. Jacobson and Delucchi point out that if coal-fired power were used to meet the world’s additional energy needs by 2030, this would gobble up $10 trillion in resources to construct 13,000 new coal-fired power stations – and that doesn’t include the costs of massively expanding coal mining and transport to feed these plants.

Ending the pollution caused by the burning of fossil fuels, on the other hand, would save trillions of dollars in health care costs and the costs of degrading the soil, waterways, and air upon which we rely for food. A big chunk of the materials currently used to manufacture 73 million cars and light trucks every year could be redirected to renewable power infrastructure if, instead of developing cities around private developers’ profiteering and corporate-promoted car culture, they were built according to a rational plan allowing many people to live near places of work, schooling and recreation and were serviced by free and efficient public transportation.