Green Economics 10/12

[Over an extended period ZNet has been publishing excerpts of chapters from Robin Hahnel’s latest book, Green Economics: Confronting the Ecological Crisis, available from M.E. Sharpe. Excerpts published here are not the full chapters which are made available inside the book. More information about the book and links to purchase it are below. Or, if you want, first, go to previous excerpts: Introduction / Chapter 1 / 2 / 3 / 4 / 5 / 6/ 7 / 8 / 9]



What Kyoto Got Right


The first thing negotiators in Kyoto got right was that climate change will not be averted unless countries mutually agree to binding emission reductions in an international treaty…. Theory predicts that a voluntary approach will not work. The free-rider dilemma is a huge obstacle to averting climate change, and anyone who fails to understand this has no hopes of solving the problem. Moreover, the historical record between the meetings in Rio and in Kyoto five years later confirms what theory predicted…. The second thing that Kyoto got right was the recognition that countries bear different responsibilities for causing climate change, countries have different capabilities to bear the costs of averting climate change, and efforts to mitigate climate change should reflect these “differential responsibilities and capabilities”….


Monitoring Problems


Perhaps no area of climate policy is more misunderstood than measuring and monitoring…. there is a huge difference between (1) monitoring country compliance with caps on national emissions during a calendar year (i.e., policing governments who are the signatories), and (2) figuring out how much credit to award a particular project for reducing emissions (i.e., policing the international carbon market). Failure to understand crucial differences between the measurement problems posed by these two completely different tasks has been the source of a great deal of confusion and many misplaced criticisms of Kyoto….


Measuring national annual emissions is far easier than measuring the amount by which a particular project reduced greenhouse gas (GHG) emissions. The reason is that in the first case we do not need to create a hypothetical scenario of what would have happened had something not occurred. None of the complications introduced because we must establish a hypothetical baseline to measure “additionality” and control for “leakage” when awarding emission reduction credits to a single project raise their ugly heads when we measure annual national emissions.



Carbon Trading: Myth Versus Reality


Despite widespread belief to the contrary, if Annex-1 governments meet their treaty obligations – which is not difficult to monitor — it is impossible for any trading between Annex-1 governments or between individual sources in Annex-1 countries to undermine the overall emissions reductions those countries agreed to—no matter how much chicanery is involved in the certification and trading process. This is an important point that many critics fail to understand….


Only trading between sources in Annex-1 countries where national emissions are capped and sources in non-Annex-1 countries where national emissions are not capped can possibly puncture a hole in the global emissions can, and this can only happen if CDM authorities responsible for certification fail to ensure that reductions are additional and without leakage, as they are supposed to. Much of the criticism of carbon trading through the CDM is not compelling. Many critics fail to acknowledge dramatic improvements in monitoring after the first year of the program, including a significant tightening of standards. Many critics wrongly criticize what they consider over- or underpaying for CERs as undermining global reductions or “inefficient,” even though the price paid for CERs has no bearing on reductions or efficiency, but only on equity. Many critics fail to understand that the problem with bogus trading is it is unfair to others living in countries where bogus sales are certified. And few critics make any attempt to compare the beneficial effects of CER trades that are legitimate with ill effects from CER trades that are not. More importantly, critics fail to consider obvious ways to correct the flaws in Kyoto that make carbon trading through the CDM mechanism problematic.


Carbon trading reduces pressure on MDCs to undergo necessary changes


Many people see carbon trading as a loophole permitting the MDCs to weasel out of making necessary adjustments to their carbon-guzzling domestic economies and unsustainable lifestyles…. In the end, MDC governments will have to regulate, tax, or cap carbon emissions—as well as spend massive sums on economic conversion. But the way to force them to launch an all-out “Green New Deal” is to lower their national caps dramatically while simultaneously making it as cheap as possible for them to meet lower caps by allowing full carbon trading. Moreover, since trading makes reductions easier, it increases the likelihood of winning the crucial political battles that lie ahead to lower caps even more than what can be won today.


REDD dispossesses indigenous communities

Critics have attacked a new feature of Kyoto called Reducing Emissions from Deforestation and Degradation (REDD) because they claim it dispossesses indigenous peoples and forest communities…. REDD is an attempt to correct for a perverse incentive Kyoto created to destroy existing forests in non-Annex-1 countries and then receive credit for replanting…. REDD was designed to eliminate this perverse incentive by awarding credits for preserving threatened forests…. For the first time, REDD made protecting existing forests in LDCs financially valuable.  But according to climate justice critics that is the catch because it makes control over existing forests more valuable than before. Critics worry that REDD gives global corporations and landed aristocracies an incentive to dispossess forest people and grab land titles even if they do not want to search for minerals or oil, burn the forest to make pastureland, or log it off for timber sales.

By design, REDD does make forests inhabited by indigenous peoples more valuable provided they are protected. But in this case, if forest dwellers can retain possession of their lands, they can reap financial rewards without destroying the forests and upsetting their traditional ways of life in any way. REDD rewards forest people financially for maintaining their traditional ways of life. All they have to do is avoid expulsion by global sharpsters. Perhaps climate justice activists and advocates for the rights and well-being of indigenous people should concentrate their efforts on helping forest dwellers keep their lands instead of denouncing a program willing to pay them considerable amounts for continuing to live exactly as they prefer.


Enforcement Problems: The Invisible Elephant


While many other issues have been the subjects of heated debates at meetings since Kyoto, enforcement has all the markings of the proverbial elephant that is invisible to everyone sitting with it in the room. Without a credible answer to how an international climate treaty will enforce negative consequences on violators, one could argue that the treaty, and all the debate that surrounds it, is little more than a tale “full of sound and fury, signifying nothing.”


Green Economics: Confronting the Ecological Crisis by Robin Hahnel is available from M.E. Sharpe.

To purchase the print edition please click here.

To order 180-day online access from the Sharpe E-text Center click here.

Coming soon from Google eBookstore and Barnesandnoble.com.


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