Climate Justice Opportunities After US Carbon Market and Legislative Crashes

Fierce debating about United States climate justice (CJ) strategies and tactics on ZNet over the past couple of months leave us ready to continue exploring comradely but sharp differences.

In ZNet Commentaries on these pages, Robin Hahnel and Ted Glick firmly dispute, respectively, two views we hold from a long way away in Durban, South Africa:

• first, to fight global warming, carbon markets are a destructive distraction, and should be decommissioned; and

• second, national legislative campaigning is futile given the prevailing balance of forces (and weak bills) on offer in the US.

Instead, CJ activists everywhere are better off directly confronting the largest emitters, their financiers and their regulators.

We’ll briefly restate these positions, and then provide an alternative CJ opportunity that both us have come to the US to campaign on behalf of during the next two weeks: halting World Bank coal financing.

First, the Kyoto Protocol’s carbon market strategy – called ‘cap and trade’ in the US – is now dead in the water. Hahnel’s thousands of words extolling potential carbon market efficiencies in four ZNet articles since late December are obviously well meaning, yet a waste of time.

Why? ‘The concept is in wide disrepute’, according to the New York Times (ordinarily a booster) last week: ‘Obama dropped all mention of cap and trade from his current budget. And the sponsors of a Senate climate bill likely to be introduced in April, now that Congress is moving past health care, dare not speak its name.’

Don’t blame us. In spite of trying hard to spike this market (e.g. http://www.durbanclimatejustice.org and http://www.storyofcapandtrade.org), we green-left critics of carbon trading cannot claim to have succeeded, if the Times is correct: ‘Why did cap and trade die? The short answer is that it was done in by the weak economy, the Wall Street meltdown, determined industry opposition and its own complexity.’

According to Senator Maria Cantwell (a Democrat from Washington State), cap and trade was ‘discredited by the Wall Street crisis, the Enron scandal and the rocky start to a carbon credits trading system in Europe that has been subject to dizzying price fluctuations and widespread fraud.’

Hahnel assumed such problems could be solved as the market matured. But just one example of brand new fraud was the Hungarian government’s resale of carbon credits, which when exposed recently, drove the price of a tonne from €12 down to €1 and crashed two emissions exchanges. According to a BusinessGreen.com reporter on March 18, ‘Europe’s carbon market descended into chaos yesterday as fears over “recycled” carbon credits sparked a collapse in the price of Certified Emission Reductions.’

A week earlier, the Global Forest Coalition accused the European Union of promoting ‘highly volatile carbon markets that jeopardize forest-dependent peoples’ livelihoods’.

Four days before that, on March 3, Reuters reported: ‘Investors are becoming less convinced that a global carbon market, estimated to be worth about $2 trillion by the end of the decade, can be established as uncertainty over global climate policy persists.’

The report went on, ‘Participants at a carbon conference in Amsterdam were equally downbeat, as carbon prices in the EU Emissions Trading Scheme are weak and range-bound and expectations are low for a climate pact being agreed this year at the talks in the Mexican city of Cancun.’

This is pleasing news, given how bad such a deal would be, and given that the emissions market serves as a profound distraction from serious climate politics, sucking Big Green groups in Washington into corporate quicksand.

Second, then, should organizing be directed at lobbying for a non-market climate law on Capitol Hill? Not yet, not even the legislation that Glick fervently supports, proposed by Cantwell and Maine Republican Senator Sue Collins: the ‘Carbon Limits and Energy for America’s Renewal Act’ (CLEAR).

CLEAR puts a cap at the original source of greenhouse gas emissions, auctions the right to pollute, and gives back a ‘consumer rebate’ from carbon revenues. It’s much preferable to the Waxman-Markey carbon trading bill that passed the House of Representatives last June, to be sure.

However, Maggie Zhou of Secure Green Future in Massachusetts notes that CLEAR’s mandated emissions reductions will be just 8% below 1990 levels by 2020, even though 45% cuts are needed to avoid breaching 2 degrees Centigrade. But Zhou reminds us, ‘It is becoming increasingly clear that even 1oC is unacceptable warming that could trigger many dangerous and potentially irreversible feedback processes.’

CLEAR’s low targets are an unacceptable insult to the rest of the world, and so too is CLEAR’s failure to mention repaying victims of climate change the ‘climate debt’ owed them by the US. Zhou also criticizes ‘offset-like projects’ in CLEAR, its promotion of unproven or dangerous techie fixes (carbon capture and storage, and oil or gas reinjection), and a too-narrow carbon pricing band range (http://securegreenfuture.org/blogs/clear).

(We would add that a genuine climate bill should also strengthen command-and-control regulatory mechanisms and mandates for the Environmental Protection Agency, utility boards and planning commissions. A serious climate/energy bill, yet to be authored, would mandate a profound economic transformation, so as to generate new production, consumption, transport, energy and disposal systems.)

Worse, if CLEAR passes the Senate in coming months, House conference negotiators will no doubt insist on fusing in many of the objectionable features of Waxman-Markey (private offsets, carbon trading, oil/nuke/agro subsidies, EPA neutering, etc).

Glick rebuts that the CJ movement cannot win everything we want at once: ‘Immanuel Wallerstein has written about the need for “movements to internalize the sense that the social transformation they are seeking will not occur in a single apocalyptic moment, but as a continuous process, one continually hard-fought.”’

True, but the critical problem is whether CLEAR drives us towards climate transformation, or puts us in neutral or reverse. Let’s distinguish between serious, structural, ‘non-reformist reforms’ on the one hand, and on the other hand, ‘reformist reforms’ that offer far too little change (just 8% below 1990); give the system a bit of legitimacy (Obama would go to Cancun beaming); amplify the system’s internal logic (auctioning the right to pollute); suffer from system-wide decay (e.g. volatile carbon prices); and weaken our team’s momentum.

We asked Wallerstein, who agrees, ‘The problem is always to decide about a particular project – in which category it falls.’ We’ve made the case that CLEAR is a reformist reform, to be avoided, and so it’s over to Glick.

Until legislation emerges and power relations change so we’re not dumped back within the toxic swamp of US congressional parameters, can’t leading CJ activists like Glick once again step up movement-building that cuts more quickly to the chase?

A good example was the March 18 Washington protest against EPA slobs who are not doing their jobs in West Virginia. For hours, Kate Finneran and Adrian Wilson blocked the EPA headquarters entrance atop stilts and two 20 feet mock blue mountains, demanding a halt to mountaintop removal by coal companies.

Joshua Kahn Russell of Rainforest Action Network explained, ‘Despite the Obama administration’s big announcement last year that it was going to take “unprecedented steps” to reduce the environmental damage from mountaintop removal coal mining in Appalachia, the EPA has been slow moving.’ Activists demand that EPA ‘block every single mining permit application that seeks to remove America’s oldest mountaintops and dump the waste into waterways,’ he said. And next, go after power companies.

Two more examples of CJ opportunities will be Fossil Fool’s Day, when on April 1, Rising Tide North America will ‘pull some pranks that pack a punch’ (http://www.fossilfoolsdayofaction.org/2010/15-actions-to-topple-the-fossil-fuel-empire/); and the Rainforest Action Network’s Tax Day (April 15) protests against coal financier Chase Bank.

Another campaign closer to our home entails fighting the World Bank’s coal portfolio (http://www.groundwork.org.za/). On April 8 the Bank Board is expected to approve a $3.75 billion loan to the South African electricity utility Eskom, to build the world’s fourth largest coal-fired power plant, Medupi. The US Treasury could veto, and thus ‘keep the coal in the hole’, but more pressure is needed.

If activists lose, paying for Medupi will require a 127% real price increase from 2007-12 for ordinary South Africans (to nearly $0.15/kiloWatt hour). Meanwhile the world’s biggest metals and mining houses – Anglo American Corporation, BHP Billiton, Arceleor Mittal and other multinationals – still get the world’s cheapest electricity from Eskom (less than $0.02/kWh).

These companies benefit from apartheid-era ‘Special Pricing Agreements’ that Eskom keeps secret, yet there are very few jobs and economic linkages because locally-sold steel and aluminum cost far more than the same products which are send abroad. Also sent abroad are their vast profits, contributing to the country’s severe payments deficit.

More than 200 organisations across the world have endorsed a critique of the loan (http://www.earthlife.org.za/?p=858). South Durban activists launched the campaign on February 16 with a spirited protest at Eskom’s main local branch.

South Durban has been an epicenter of protest against fossil fuels, given that our neighbours include the largest and least responsible petro-chemical firms south of the Niger Delta. With electricity prices soaring, many more residents in South Durban are being disconnected. They often reconnect illegally, and as Eskom and the municipality clamp down, the result is more social strife, in a country with what is probably the world’s highest rate of community protest (http://www.ukzn.ac.za/ccs/default.asp?2,27,3,1858).

In Limpopo and Mpumalanga provinces, anger at Eskom and the World Bank comes from eco-social threats in the vicinity of Medupi and the dozens of new coal mines that will feed it. Local ecologies are adversely affected, especially the notoriously degraded water table, as well as the air, land, vegetables and animals due to mercury emissions from coal.

If these reasons are not enough, Eskom’s desire to privatize 30% of generating capacity is explicitly advanced in the loan, leading to opposition from trade unions – especially the National Union of Metalworkers of South Africa – and consumers.

Corruption is rife, too. Contrary to supposed anti-corruption policies, the Bank loan will directly fund African National Congress (ANC) ruling party coffers, because the power plant will be built with Hitachi boilers that in turn kick back an estimated $700 million thanks to a convenient – and utterly dubious (everyone admits) – ANC investment in Hitachi. When the deal was done, Eskom chair Valli Moosa was also a member of the ANC’s finance committee. A government investigation released last Thursday found his conduct in this blatant conflict of interest to be ‘improper’.

Finally, there’s historic racial injustice. The World Bank’s financing of apartheid began just three years after the 1948 election of the Afrikaners’ Nationalist Party, and included $100 million for Eskom. During that period, the World Bank’s money financed electricity to exactly zero black households and instead empowered white businesses and residences.

If the Bank makes the loan on April 8, South Africans will call for the revival of the World Bank Bonds Boycott, to encourage divestment by institutional investors similar to anti-apartheid tactics, and will also lobby for rejection of the Bank’s forthcoming recapitalization.

Scores of organizations across Africa are already on board this campaign, and the next step beyond the World Bank will be to demand that South Africa confront its own climate debt to the continent.

These opportunities for activism against the world’s largest producers, financiers, regulators and consumers of fossil fuels reflect the need for solidaristic global-local linkages. Seeking these out is one benefit behind building internationalist CJ politics as quickly as possible.

(The authors are South Durban residents. Bond is University of KwaZulu-Natal Centre for Civil Society director and is giving talks about keeping SA coal in the hole on April 4 in Berkeley, 5 at New York University, 6 at City University of NY, 8 at Clark University in Worcester, 9 in Boston at Encuentro 5, and 11 in Washington with AfricaAction. D’Sa leads the Community Environmental Alliance and will discuss the campaign on April 5-6 in Washington, 8-10 at Yale, and 10-12 in Chicago. For more details see http://www.ukzn.ac.za/ccs)

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