Big polluters demand billion-dollar 'ransom'

Adam Morton, March 18, The Age

AUSTRALIA'S electricity generation industry is demanding massive compensation from the Federal Government in return for its co-operation in efforts to curb greenhouse gas emissions.

In a challenge to the Government's climate adviser, Ross Garnaut, the power generators have warned of soaring costs to consumers and disruptions to supplies unless they are compensated for the costs of complying with anti-greenhouse laws.

With most of Australia's electricity coming coal-fired generators, the industry is the nation's largest producer of greenhouse emissions, and the main focus of efforts to curb them. A planned carbon trading system will force the industry to pay to emit greenhouse gas.

The National Generators Forum, in a submission to Professor Garnaut's Climate Change Review, has argued that failure to compensate the biggest polluters could, perversely, hurt the environment by directing industry funding away from clean energy research to maintaining baseload energy supply.

Climate Change Minister Penny Wong yesterday unveiled a timetable for drawing up carbon trading legislation. The scheme, to start in 2010, will involve carbon emissions being capped and pollution permits sold at a market-set price.

The push by power companies for a payout is at odds with an interim report from by Professor Garnaut last month, which argued against sweeping compensation.

Climate Institute policy director Erwin Jackson has rejected the suggestion that refusing compensation to power generators would hurt the environment, arguing a strong emissions cap would force the market to invest in cleaner forms of energy.

"We shouldn't be giving (compensation) to industries that have failed to respond to what the market has been telling them was on the way for a long time," he said.

The debate coincides with worsening predictions about the pace of climate change, including a UN report that found glaciers melted nearly twice as fast in 2006 as in 2005.

With growing evidence that Asia-Pacific will be severely affected by climate change "in our lifetime", the Australian Climate Group — a collaboration between scientists, environmentalists and insurers — will today release a report calling on the Government to stabilise greenhouse emissions by 2010.

The National Generators Forum, representing 22 power generators, has estimated that Australia's electricity costs will soar from $78 billion to $150 billion if the Government target of a 60% cut in greenhouse emissions by 2050 is met.

Ms Wong said details of the emissions trading legislation would be released in December, preceded by a public discussion paper in July.

Professor Garnaut will release a report on emissions trading on Thursday. www.garnautreview.org.au

From False to Real Solutions for Climate Change

Patrick Bond, January 05, ZNET

Amidst her welcome critique of the biofuel mania, Vandana Shiva's ZNet commentary last month (December 13, 2007) also made this point: 'The Kyoto Protocol totally avoided the material challenge of stopping activities that lead to higher emissions and the political challenge of regulation of the polluters and making the polluters pay in accordance with principles adopted at the Earth Summit in Rio. Instead, Kyoto put in place the mechanism of emissions trading which in effect rewarded the polluters by assigning them rights to the atmosphere and trading in these rights to pollute.'

Indeed in 1997 at Kyoto, Al Gore bamboozled negotiators into adopting carbon trading as a central climate strategy in exchange for Washington's support - which never materialized.

Likewise last month's Kyoto Conference of Parties in Bali allowed the 'everyone v. the USA' debate to obscure much more durable problems. Even many environmentalists and well-meaning citizens think that building on Kyoto is the correct strategy for post-Bali negotiations.

These include the Climate Action Network of NGOs and corporate-funded environmental groups including the IUCN, Sierra Club, World Wildlife Federation and Environmental Defense Fund. Senators Sanders, Kerry, Lieberman, McCain, Leahy, Feinstein, Bingaman, Snow, Specter, Alexander and Carper proposed laws in 2007 featuring emissions trading.

'Fixing a market problem (pollution) with a market solution' is still a mantra to some light-greens, notwithstanding a year's worth of scandalous reports from practitioners and the press.

A year ago, Citigroup's Peter Atherton confessed in a powerpoint that the European Union's Emissions Trading System (ETS) had 'done nothing to curb emissions' and acted as 'a highly regressive tax falling mostly on poor people.' On whether policy goals were achieved, he admitted: 'Prices up, emissions up, profits up... so, not really. Who wins and loses? All generation-based utilities - winners. Coal and nuclear-based generators - biggest winners. Hedge funds and energy traders - even bigger winners. Losers... ahem... Consumers!'

The Wall Street Journal confirmed last March that emissions trading 'would make money for some very large corporations, but don't believe for a minute that this charade would do much about global warming.' The paper termed the carbon trade 'old-fashioned rent-seeking... making money by gaming the regulatory process.'

Speaking to Channel Four news last March, the European Commissioner for Energy offered this verdict on the ETS: 'A failure'. Yvo de Boer, the sanguine head of the UN Intergovernmental Panel on Climate Change, warned of 'the possibility that the market could collapse altogether.' In April 2006, the price of carbon in Europe's market fell by half overnight due to authorities' mismanagement of the ETS.

But not just in Europe. According to Newsweek magazine's investigation of Third World carbon trading (through the Clean Development Mechanism) last March, 'It isn't working... [and represents] a grossly inefficient way of cutting emissions in the developing world.' The magazine called the trade 'A shell game' which has transferred '$3 billion to some of the worst carbon polluters in the developing world.'

After an exhaustive series on problems associated with carbon trading and offsets, the Financial Times concluded they were merely a 'carbon "smokescreen"'.

In June, The Guardian newspaper headlined its investigation with equal scorn: 'Truth about Kyoto: Huge profits, little carbon saved... Abuse and incompetence in fight against global warming... The inconvenient truth about the carbon offset industry.'

Meanwhile the Big Green groups' professionalism and reasonableness - or simple cronyism (since key personnel from CAN now work in the industry) - have made them utterly useless as watchdogs on the carbon trade.

So then who do we turn to?

The Bali conference featured an alternative movement-building component outside: a Climate Justice Now! coalition made up of Carbon Trade Watch (the Transnational Institute); the Center for Environmental Concerns; Focus on the Global South; the Freedom from Debt Coalition, Philippines; Friends of the Earth International; Women for Climate Justice and the Global Forest Coalition; the Global Justice Ecology Project; the International Forum on Globalisation; the Kalikasan-Peoples Network for the Environment; La Vía Campesina; the Durban Group for Climate Justice; Oilwatch; Pacific Indigenous Peoples Environment Coalition; Sustainable Energy and Economy Network (Institute for Policy Studies); The Indigenous Environmental Network; Third World Network; Indonesia Civil Society Organizations Forum on Climate Justice; and the World Rainforest Movement.

The coalition criticised carbon trading and called for genuine solutions: 'reduced consumption; huge financial transfers from North to South based on historical responsibility and ecological debt for adaptation and mitigation costs paid for by redirecting military budgets, innovative taxes and debt cancellation; leaving fossil fuels in the ground and investing in appropriate energy-efficiency and safe, clean and community-led renewable energy; rights-based resource conservation that enforces Indigenous land rights and promotes peoples' sovereignty over energy, forests, land and water; and sustainable family farming and peoples' food sovereignty.'

In October 2004, the Durban Group was founded to tackle the problems in the carbon trade, warning of all the dangers above, especially Shiva's point that the transfer of the right to pollute is a multitrillion dollar giveaway to the people who caused the bulk of the climate problems.

But establishment figures will continue confusing matters. At the Bali meeting, a key Third World leader was South African environment minister Marthinus van Schalkwyk - successor to FW de Klerk as leader of the National Party after serving the apartheid police as a spy against fellow students (he later folded the NP into the ruling African National Congress and was rewarded with a do-little ministry). His strategy for bringing the US into the fold came at the price of evacuating any emissions target and accountability mechanism in the official declaration, and reinforcing the carbon trade.

Van Schalkwyk's leadership is a travesty, for he has said nothing about South Africa's own $20 billion in new investments - partly privatised through the US multinational AES - in cheap coal-fired electricity generation for the sake mainly of large corporations; he endorses nuclear energy expansion. SA already has an emissions output per person per unit of GDP twenty times worse than the US, and van Schalkwyk's official carbon trading policy argues that it is primarily a 'commercial opportunity.'

This is true only if there is resistance; in Durban, Sajida Khan fought carbon trading before her death by cancer caused by an apartheid-era landfill next door - SA's Clean Development Mechanism pilot for methane-extraction.

In contrast to carbon trading, what is reverberating within grassroots, coalface and fenceline struggles in many parts of the world is a very different strategy and demand by civil society activists: leave the oil in the soil, the resources in the ground.

This call was first made as a climate strategy in 1997 in Kyoto by the group OilWatch when it was based in Quito, Ecuador. Heroic activists from Accion Ecologia took on the struggle to halt exploitation of oil in part of the Yasuni National Park. This led President Rafael Correa to declare in mid-2007 that the North should pay Ecuador roughly $5 billion in compensation for its commitment to permanently forego exploitation of Yasuni (albeit with concern amongst indigenous people about nearby oil extraction especially by the voracious Brazilian firm Petrobas).

A year ago at the World Social Forum in Nairobi, many other groups became aware of this movement thanks to eloquent activists from the Niger Delta, including the Port Harcourt NGO Environmental Rights Action. For example, women community activists regularly disrupted production at oil extraction sites with sit-ins in which, showing maximum disrespect for the petro multinationals, they removed their clothing.

In my own neighbourhood, which includes two of Africa's largest oil refineries, the South Durban Community and Environmental Alliance has been mobilising against corporate and municipal environmental crime, including three major explosions and fires since September and a massive fish kill at Christmas from toxic dumping in Durban's harbour, the busiest in Africa.

But the legacy of resisting fossil fuel abuse goes back much further, and includes Alaskan and Californian environmentalists who halted drilling and even exploration. In Norway, the global justice group ATTAC took up the same concerns at a conference last October, and began the hard work of persuading wealthy Norwegian Oil Fund managers that they should use the vast proceeds of their North Sea inheritance to repay Ecuadorans some of the ecological debt owed.

Perhaps the most eloquent climate analyst in the North is George Monbiot, so it was revealing that last month, instead of going to Bali, he stayed home in Britain and caused some trouble, reporting back in his Guardian column:

'Ladies and gentlemen, I have the answer! Incredible as it might seem, I have stumbled across the single technology which will save us from runaway climate change! From the goodness of my heart I offer it to you for free. No patents, no small print, no hidden clauses. Already this technology, a radical new kind of carbon capture and storage, is causing a stir among scientists. It is cheap, it is efficient and it can be deployed straight away. It is called ... leaving fossil fuels in the ground.

'On a filthy day last week, as governments gathered in Bali to prevaricate about climate change, a group of us tried to put this policy into effect. We swarmed into the opencast coal mine being dug at Ffos-y-fran in South Wales and occupied the excavators, shutting down the works for the day. We were motivated by a fact which the wise heads in Bali have somehow missed: if fossil fuels are extracted, they will be used.'

Canada is another Northern site where activists are working to leave the oil in the soil. In an Edmonton conference last November, the University of Alberta's Parkland Institute and its allies argued for no further development of tar sand deposits (which require a litre of oil to be burned for every three to be extracted, and which devastate local water, fisheries and air quality).

Institute director Gordon Laxer laid out careful arguments for exceptionally strict limits on the use of water and greenhouse gas emissions in tar sand extraction; realistic land reclamation plans and financial deposits; no further subsidies for the production of dirty energy; provisions for energy security for Canadians (since so much of the tar sand extract is exported to the US); and much higher economic rents on dirty energy to fund a clean energy industry (currently Alberta has a very low royalty rate).

I have mentioned this demand in many sites over the past two years, enthusiastically commenting on the moral, political, economic and ecological merits of leaving the oil in the soil. Unfortunately, in addition to confessing profound humility about the excessive fossil fuel burned by airplanes which have taken me on this quest, I must report on the only site where the message dropped like a lead balloon: with dear comrades in petro-socialist Venezuela.

Never mind, there are a great many examples where courageous communities and environmentalists have lobbied successfully to keep nonrenewable resources (not just fossil fuels) in the ground, for the sake of the environment, community stability, disincentivising political corruption and workforce health and safety.

The highest-stake cases here in South Africa at present are the vast Limpopo Province platinum fields and the titanium and other minerals in the Wild Coast dunes (where, ironically, the film Blood Diamond was shot). Tough communities are resisting multinational corporations, but will need vigorous solidarity, because the extraction of these resources are extremely costly in terms of local land use, peasant displacement, water extraction, energy consumption and political corruption, and require constant surveillance and community solidarity.

Still, the awareness that local activists are generating in these campaigns makes us all more aware of how damaging bogus strategies like carbon trading can be, in contrast with a genuine project to change the world.

(Patrick is co-editor of a book on climate change which will be launched in several sites in the Northeastern US in Feb-March; details will be posted at http://www.ukzn.ac.za/ccs)

Red faces as the state's green scheme hits wall

Wendy Frew and Marian Wilkinson, September 11, Sydney Morning Herald

NSW'S flagship scheme to cut greenhouse gas pollution is on the verge of collapse, putting jobs and millions of green investment dollars at risk and killing the incentive for householders to cut soaring electricity consumption.

A plunge in the state's carbon price - caused by an oversupplied market colliding with investor uncertainty - is crippling the Greenhouse Gas Abatement Scheme. As big energy companies stop buying emission savings, the green-friendly companies that sell them are finding their cashflow drying up.

Blame for the crisis has been sheeted home to the NSW and federal governments. Critics say the State Government has made it too easy for polluters to participate in the market and that the Federal Government has created long-term uncertainty about climate change policy.

Paul Gilding, the head of the high-profile energy saving company Easy Being Green, told the Herald yesterday the scheme was in crisis and that the survival of his company was on the line.

"Easy Being Green is absolutely at risk of ceasing to exist in NSW if the price stays where it is," he said. "It means the end of operations in this state and the end of 140 permanent jobs and 100 full-time contractors."

The revelation of the crisis is an embarrassment for the NSW Government, which will release the Owen report this morning, recommending the sale of the state's electricity retailers and generators.

Under the scheme - the first of its kind in Australia - power plants, forestry groups and energy efficiency companies that act to cut greenhouse gas emissions are awarded certificates, each one representing the equivalent of one tonne of carbon dioxide avoided.

They sell these certificates to energy retailers, which have to meet mandatory emissions targets set by the State Government. The costs are passed on to electricity consumers.

The certificates generated since 2003 are estimated to be worth about $450 million. But over the past few months a series of federal and state policy announcements has sent the market into a spin. The price of carbon

has plummeted 50 per cent, from $12 a tonne of carbon dioxide mid-year to just over $6 yesterday.

Doubts were raised about how a state scheme would merge with any national emissions trading scheme when the Prime Minister, John Howard, released his emissions trading report in May.

The NSW carbon price, already languishing around $11 a tonne, fell further in July when Mr Howard appeared to exclude demand management and energy efficiency abatement from the scheme. At $6, it is no longer economical for companies such as Easy Being Green, Neco and Fieldforce to install light bulbs, low-flow showerheads and other energy-saving devices into homes free or at heavily discounted prices.

Mr Gilding said the scheme's most cost-effective and efficient way of cutting greenhouse gas pollution would disappear. "That will be a tragedy," he said. "This is the scheme that is cutting greenhouse gas pollution at the mass consumer level."

The NSW Government has been accused by some market participants and green groups of contributing to the collapse by making it too easy to generate certificates that did not represent genuine greenhouse gas cuts. The NSW Minister for Climate Change, Environment and Water, Phil Koperberg, declined a request for an interview. A spokeswoman for him blamed the Federal Government for the market crash.

The State Government has formed a taskforce to investigate the price collapse.

The head of the NSW advisory panel on climate change, Martijn Wilder, from the law firm Baker & McKenzie, said he believed a number of energy efficiency companies in the market were "on the edge". He said there were two simple factors: the oversupply of certificates and the uncertainty in the market since the Federal Government announced its carbon trading scheme.

Fieldforce's managing director, Craig Bathie, said if the price of carbon remained at $6, more than half of NSW householders would miss out on free or discounted energy installations, and his company might have to lay off a couple of hundred employees in rural areas.

Neco's carbon services director, Ben O'Callaghan, said his company might have to close its regional Carbon Services Division, and 60 jobs in 10 regional locations would be lost.

No change on climate at APEC: envoy

Katharine Murphy, August 8, The Age

PRIME Minister John Howard's hand-picked climate change envoy says APEC is unlikely to deliver big breakthroughs on global warming.

And he says the United States will not accept emissions trading until there is a new president.

Former Macquarie Bank deputy chairman Mark Johnson says APEC economies were "not at a level yet where there is a common aspiration" about how to reduce the risks of global warming.

"There will certainly be no targets (agreed in September). There's not that degree of commonality," Mr Johnson said in an interview in Canberra on Tuesday.

He said national environmental reforms now being considered by the US Congress were unlikely to yield change "until the next president".

"I think it will take a long time to get to emissions trading in the United States," he said.

But Mr Johnson said next month's meeting of APEC leaders in Sydney could deliver business some much-needed priorities in areas such as improving energy efficiency and support for new emissions reduction technology.

Mr Johnson met Mr Howard privately in Canberra late yesterday to outline business priorities for the APEC meeting.

Achieving progress on climate change and energy security is number one on the business wish list.

Mr Johnson was appointed by Mr Howard in June in a special outreach role to encourage regional economies to come up with a co-operative approach to climate change.

He is also chairman of APEC's high-powered business advisory council. In a new report to APEC leaders handed to Mr Howard yesterday, the business delegation calls for September to deliver transparent rules and incentives to deal with the challenges of global warming and energy security, and a bolder approach to free trade and investment liberalisation.

The wish list also flags business support for significant changes to allow the free movements of labour across APEC members.

Business is preparing a push to allow skilled labour and guest workers from countries such as Mexico and the Philippines freer movement into developed economies within APEC, to tackle looming changes in the labour market, including the retirement of the baby boomers.

Mr Howard has previously played up the importance of the APEC meeting for breakthroughs on climate change, but the focus of key international players, particularly the US, has shifted to a United Nations gathering in December, and a separate meeting of polluters being spearheaded by US President George Bush.

Mr Johnson said business did not expect APEC to "change its nature", but corporations in the member economies were looking for action from their political leaders across a range of fronts.

He said business would view the September gathering as a success if issues such as climate change were "elevated as a discussion item" and if economies could deliver principles on issues such as transparency of rules and regulations, and government incentives.

Trade is also a significant agenda item. Yesterday's brief to Mr Howard calls for APEC leaders to consider a free trade area for the Asia-Pacific region.