Carbon Trading: A Critical Conversation on Climate Change, Privatisation and Powerby Larry Lohmann; Uddevalla: Dag Hammersjöld Foundation, The Durban Group for Climate Justice and The Corner House, 2006; Development Dialogue No. 48. pp. 357. £15.00 (pb). ISSN 03452328.
The climate crisis is not only imminent, but in some respects is already here. As the environmental effects of human-induced climate change become more evident, so too do the political, social and economic ramifications of the strategies adopted to combat them. Larry Lohmann's central argument in this excellent critique of carbon trading is that the trading mechanisms at the heart of the Kyoto Protocol not only fail to address the climate crisis, but also produce new forms of exploitation and inequality that tend to perpetuate colonial-style relationships between the global North and South.
Despite the conversational tone and dialogical structure, this is a meticulously researched and referenced book that progresses from densely packed theoretical arguments to empirical examples. The inclusion of an index might help readers negotiate what is often quite dense material.
Beginning from the premise that avoiding catastrophic climate change will require leaving most of the remaining fossil fuels in the ground, Lohmann convincingly argues that the carbon trading mechanisms enshrined in the Kyoto Protocol and the EU's Emissions Trading Scheme are unequal to this task. This is fundamentally because emissions trading is about organising pollution more efficiently, rather than eliminating it. Lohmann traces the history of this rationality from the US cap-and-trade schemes for sulphur dioxide, lead and nitrogen oxides through to contemporary carbon trading schemes. The claim by advocates that trading reduces pollution more efficiently than conventional regulation is interrogated: what exactly is made efficient, and for whom? Lohmann observes that ‘if a market makes it easier for companies to put their pollution anywhere they want, it will wind up on the doorsteps of the poor and less powerful’ (p. 122). Even the price mechanism at the heart of carbon trading relies more on hope than on sound science when it assumes that carbon absorption rates, baseline emissions and alternative scenarios can be precisely quantified and traded. Situations characterised by uncertainty, ignorance and indeterminacy cannot always be translated into calculable risk.
The practical pitfalls of carbon trading are explored through accounts of specific projects for offsetting emissions through investments in carbon sinks or alternative technologies abroad, such as under Kyoto's Clean Development Mechanism (CDM). Drawing on the work of other researchers and journalists, Lohmann shows how tree plantations in Uganda, for example, not only failed to achieve anywhere near the projected carbon ‘savings’, but also exploited local authorities and displaced rural communities. Some of these examples are rather brief and raise more questions than they answer, but what is lost in depth is gained in breadth.
One of the more in-depth examples focuses on a World Bank project to earn carbon credits by capturing and burning methane from the Bisasar waste dump in Durban, South Africa. This has drawn fierce opposition from local residents and environmentalists, such as Sajida Khan, whose personal struggle tragically ended with her death in July 2007 from the cancer she attributed to the dump's carcinogenic emissions. The complex and multifaceted story of Bisasar is handled sensitively by Lohmann, who allows space for multiple perspectives – including the support for the project from groups living in the adjacent Kennedy Road informal settlement.
In contrast, the Kuyasa housing project in Cape Town was awarded the ‘Gold Standard’ for CDM projects that are deemed to be highly environmentally and socially sustainable. The project retrofitted low-cost Reconstruction and Development Programme homes in Khayelitsha township with insulation, energy efficient lighting and solar water heaters. Lohmann's critique of such attempts at certification as marginal is justifiable within his broader argument, and he shows that the Kuyasa project was primarily a one-off public sector investment which was ‘virtually incompatible’ with CDM as it currently operates (p. 297). However, rather than entirely rejecting such efforts at certification as Lohmann does (pp. 182–184), perhaps they might offer some possibility of a more socially and environmentally sustainable form of carbon trading, especially if the price of carbon credits rises and there is pressure from activists and civil society for ‘Gold Standard’ credits to become the norm rather than the exception.
Broadly, however, the critique of carbon trading as a ‘market fix’ – the myth that calculating risks and efficiencies will bypass tough political struggles and decisions – is spot on. As Lohmann notes, ‘markets transform and centralise coercion in certain ways; they do not get rid of it’ (p. 342). Trading carbon is not the only, nor even the most obvious option, we are reminded, and large-scale public works, the shifting of subsidies, conventional regulation, green taxes and legal action are all presented as alternatives. In the end his demolition of the notion of trading our way out of the climate crisis is so compelling, and the alternatives he offers so familiar, that it is almost possible to lose sight of quite how radical and important this contribution is.