From 7th to 18th December
2009, delegates from 192 countries will be gathering in Copenhagen, Denmark,
in order to create a new, “legally-binding”, global treaty on climate change.
The UN Climate Conference in Copenhagen (known
as COP15) marks the culmination of two-years of negotiation to try and generate
a replacement for the Kyoto
protocol, which is due to expire in 2012.
Global climate change treaties, such as the
Kyoto protocol,
are based on the assumption that the market, if given the correct regulation
and incentives, can solve the problems of climate change. The main basis of the
Kyoto treaty
was the UN “Clean Development Mechanism” (CDM), which allows countries to treat
carbon dioxide (CO2) emissions as a commodity that can be traded
just like any other. Countries are given a CO2 limit that they must
keep to; however, any country exceeding their limit can “offset” their
emissions by purchasing “carbon credits” from a country that is below its limit.
These “cap-and-trade” schemes have existed
in various forms for some time, and have been proven to be completely
ineffective at best, and genuinely harmful at worst. A scheme known as
“Reducing Emissions from Deforestation and Degradation” (REDD) allows wealthy,
carbon-hungry countries to offset their emissions by paying poorer, tree-rich
countries to reduce deforestation. In many cases this has become a new form of
conditional bilateral aid, which The Economist describes as an “arboreal Washington consensus,
with an approved set of tree-related economic-policy prescriptions”.
Cap-And-Trade
The EU has also set up a cap-and-trade
system, known as the Emissions Trading Scheme (ETS). This was designed to put a
price on CO2 emissions and encourage industry to invest in low-carbon
technologies. However, after pressure from Big-Business, the EU allowed
large-emitting industries, such as aviation, to be exempt from the ETS, and
created a large excess of carbon-credits, resulting in a crash in the price of
carbon and a continuation of business-as-usual for everyone. Andrew Simms,
policy director at the New Economics Foundation, described the situation
perfectly, saying “The ETS initially issued more permits to pollute than there
were emissions and now, in the recession, is trading emissions that don’t exist
– so-called hot air”.
The USA is the latest country to
attempt to introduce a carbon-trading scheme, but this time Big-Business has managed
to get its foot in the door even earlier, giving “donations” to Senators in
exchange for the promise of a watered-down cap-and-trade bill. As a result, the
latest proposal that is working its way through the Senate includes subsidies
for nuclear, extra support for US
oil and gas industries (under the guise of “energy security”), and a potential
“border tax” on goods from countries with lax environmental standards – essentially
a carbon tariff.
The International Institute for Environment
and Development, a British think-tank, says the global carbon market could be
worth $118 billion a year, whilst others estimate that carbon-trading could
become a financial industry worth trillions. Like most other transactions in
the financial sector, this carbon-trading is what Marx referred to as
“fictitious capital” – capital without any real value, which only serves to
create asset bubbles, temporarily helping the bankers and stock-brokers to make
a tidy profit. New Scientist reports that, “The potential for making a profit
from buying or selling carbon-credits has encouraged a whole landscape of speculators,
hedge funds, carbon brokers, and complex financial instruments to spring up”,
and then goes on to point out that, “If we cannot trust financiers with
something as apparently straightforward as the housing market, why should we
imagine they can triumph at controlling global pollution?”. Meanwhile, in a
recent report entitled “A Dangerous Obsession”, the environmental group
“Friends of the Earth” (FotE) say that, “The complexity of the carbon markets,
and the involvement of financial speculators and complex financial products,
carries a risk that carbon trading will develop into a speculative commodity
bubble that could provoke a global financial failure similar in scale and
nature to that brought about by the recent subprime mortgage crisis”.
Whilst New Scientist and FotE are both
correct in pointing out the flaws of carbon-trading, they are not revolutionary
organisations, and ultimately they both point to government “regulation” and “intervention”
as the solution to climate change. The British Government, however, has shown
no desire to regulate or to intervene, and will never do so as long as it
supports Big- Business. The Government nationalised the banks to protect the
bankers, not to direct investment into green-technologies; for example, nearly 20%
of GDP in the UK has been spent to prop up the financial sector, compared to
just 0.0083% on green economic stimulus. Meanwhile, instead of regulating
important industries such as the cartel of energy companies, which make huge
profits from selling electricity and gas at extravagant prices to poor
pensioners, the Government chooses to liberalise these markets even further.
Carbon Tax
Friends of the Earth, like many others,
propose the idea of a “carbon tax” instead of establishing a price for carbon
through trading schemes. Socialists, however, must oppose such a suggestion, as
a carbon tax would be a regressive tax, driving up energy prices for the
unemployed, pensioners, and other people in “fuel-poverty” who, according to
academic studies, already spend up to 19% of their income on heating in some
cases.
It is clear that climate change is a grave
danger to the planet and to humanity. According to the latest report by the
Intergovernmental Panel on Climate Change (IPCC), “it is more than 90% probable
that humankind is largely responsible for modern-day climate change”; however,
Socialists should point out that, like all inequality created by Capitalism,
climate change is problem that is caused by a rich minority, but that affects
the poor majority. Developing countries across the world will be more affected
by climate change due to flooding, drought, and a greater risk of disease,
whilst it is the most vulnerable sections of society within rich countries that
will be hit by climate change, such as pensioners who are unable to heat their
homes during the periods of extreme cold that are the result of climate change.
Many politicians and environmental activists
across the world are placing great hope in the Copenhagen talks, seeing a global climate
treaty as the only possible solution to the problem of climate change. Most
people, however, have already given up any hope of an agreement being reached
in Copenhagen, predicting that the talks will fail due to the contradictions
between the demands of rich countries, such as the USA, and developing
countries, such as China and India. Socialists, however, recognise that the
problem with climate treaties is much deeper; the problem is due to
contradictions within Capitalism itself.
A System For Profit
Capitalism is a system that is run solely
for short-term profit, and does not place any value in the environment or the
plant. Climate change is an inherently long-term problem, and can never be
solved by market-based solutions such as carbon-trading or by governments such
as New Labour that buy into Capitalism. If you accept Capitalism, then you must
also accept the logic of Capitalism. This logic dictates that you cannot regulate
Capitalism and try to create a greener, more benevolent version of it. Any
attempt to tame the damage that Capitalism causes on planet will inevitably eat
into profits, and is therefore unacceptable to the Capitalist system. Creating
a commodity out of carbon just exposes the environment to the same anarchy of
the market that has created the latest deep recession and all other recessions
before it.
Climate change can only be solved under
Socialism – a system in which the economy is democratically planned according
to the needs of people and the planet, involving the nationalisation of the
major levers of the economy, such as the banks, the energy industry, and
transport, all under workers control. Climate change is an international
problem, and international Socialism is the only solution.
