Africa CO2lonialism Must Stop

Greetings friends,

This was past on to us here a EarlyBird Foundation by the International Rivers Network. It appeared in the East African on Jan. 25. The author is Mark Hankins of Nairobi.

If you have been a reader of ours for some time you know that we are in agreement and will continue to denounce this insidious threat. Join us and pass it on.

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Please Mr. Obama: No More CO2lonialism in Africa

In his inauguration speech, Mr. Obama highlighted climate change as a global crisis, challenging American citizens the take on the problem:
"…and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet." Now, as he enters his office and gets to work, we wait with bated breath to see how the new administration addresses the issue that Dubya steadfastly ignored. Indeed, Africa has a special interest in any Obama "Change" approach to climate change --- and the worldwide development of clean energy sources. Of all of the promises on the table for developing countries in Kyoto ten years ago --- massive new streams of finance for investment in renewable energy, energy for sustainable development and poverty alleviation in villages --- very few have come to fruition in Africa. In today's 60 billion dollar a year market for carbon off-sets, Africa is a miniscule player, and the traders active here are mostly briefcase consultants and multinational carpetbaggers. In Africa, for all the noise made, climate change funding streams are merely making scratches in the ground.

So why did Africa lose out? What happened? Where did the money go? The answer is in the history of Kyoto and the resultant market mechanisms that have much more to offer booming carbon-intensive economies like China, India and Brazil than to the risky, comparatively sleepy and carbon neutral economies in Africa.

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Except for Iraq, Somalia, Zimbabwe, the USA and a handful of other rogue states, all nations in the world have signed the 1997 UN Kyoto Protocol. The agreement, which binds "industrialized" countries to reduce their greenhouse gas (GHG) emissions by 5.2% below 1990 levels by 2012, came into force in 2005 when Russia added its approval.

As expected in international negotiations, in the early days there was a lot of blaming and foot-dragging by leaders presented with irrefutable evidence that the earth is getting warmer because of human activities. Developing countries maintained that their own economic growth --- read fossil fuel use here --- should not be stunted because of a problem largely caused by the North. Industrialized countries (called Annex 1 countries in the treaty) felt that penalizing them alone would provide unfair economic advantages to the South. Given the cacophony of tree-hugger activists, indigenous people NGOs and industry pressure groups at the meetings, it is something of a miracle that so much of the world did, eventually, sign up to the agreement.
The Kyoto Protocol forces countries to honour commitments to GHG emission reductions, implement aggressive actions to reduce emissions, "minimize impacts of climate change on developing countries", monitor national GHG emissions and to set up compliance committees.

For better or worse, we have America to blame for the "flexible mechanisms" by which countries must endeavour to reduce their GHG emissions. These include emissions trading, the Clean Development Mechanism and Joint Implementation (More on these later). Under Clinton, Americans actually did believe in the science of global warming and Al Gore, who much later masterminded An Inconvenient Truth, was one of those tasked to negotiate the USA's platform in Kyoto. Clinton's Administration unilaterally favoured "market" approaches to solving the climate crisis, rather than politically unpalatable "binding targets" - and the US threatened to walk out of the talks if the world didn't play by Uncle Sam's rules.

The US Environment Protection Agency developed the now-famous "cap-and-trade" model. In short, a cap-and-trade approach set emission limits in countries (i.e. "capping"), penalizing those that exceeded their quota while --- at the same time ---- allowing offenders who exceeded limits to "trade" with compliant entities who did meet their targets. Active trading in carbon would create new opportunities based on the fact that it is cheaper to reduce carbon emissions in the some places (the South) than others. Computer models famously showed that this model was much more "efficient" than any other approach to reducing worldwide GHG emissions, and Kyoto reluctantly bought into it.

Unfortunately, shortly after Kyoto, the Bush regime --- fronting for America's vast coal and petroleum industry --- came into power and declared climate change to be nonsense. Any American support for Kyoto was abrogated --- even the flexible mechanisms it forced on the party --- and, with a few loyal supporters (Australia, Russia) the US unsuccessfully attempted to scuttle the entire protocol.

Kyoto's execution fell to the Europeans, and they took the cap-and-trade message to heart. They quickly developed the multi-billion dollar EU Emissions Trading Scheme that is, to date, the largest carbon market in the world. Millionaire trading companies, based on trading packets of air, sprang up overnight, bringing new meaning to the term "bubble". London became the world's carbon finance center, racheting up a market valued at $60 billion by 2007. Europe's voluntary offset market, worth several billion dollars per year, also developed almost overnight. Due to their clever lobbying throughout the process, more than a third of the first few year's cash bounty found its way back to carbon spewing multinationals who were freely given massive allowances by governments so that they would play along! Indeed, cap-and-trade and ETS was relatively successful in reducing European emissions.

For Africa, the only way to play in the carbon trading market was through the project-based Clean Development Mechanism (CDM) or through the unregulated voluntary emissions market.
CDM is the UN-arranged marriage of the North, which wanted opportunity to off-load surplus carbon emissions and the South, which desired investment and sustainable development. Using the CDM, industrialized country companies can invest in carbon-reduction projects in the South, and claim the carbon reductions. Southern countries register and approve the projects, and a wobbly UN administering system keeps track of the carbon credits. So, for example, owners of a coal-fired power plant in Germany can invest in a wind-farm scheme in China, claim those bona fide reductions, and meet their reduction targets without having to do a thing to their plant.

In 2007, the CDM pipeline had 3000 pipeline projects worth about 12 billion. But here's the rub: In practice, very little has happened with the CDM in Africa. In a recent census, China --- desperately needing green power to supplement the dozens of coal-fired power plants it builds each year --- had on the order of 860 CDM pipeline projects, more than 60% of all projects registered. In the same census, Brazil had 240 pipeline projects. Mexico had 175.

As of August 2008, all of Africa had only 50 registered CDM pipeline projects, about half of them in the carbon-intensive economy of South Africa (Kenya accounts for seven of these, for geothermal, cogen and hydropower projects). In short, Africa doesn't spew out enough carbon to make CDM projects, which must demonstrate avoided emissions, worthwhile! And Africa is a tricky a place to do business... So, the "magic market mechanisms", touted by economists with capes and wands ten years ago, have again failed Africa in favour of more bustling economies.

In the meantime, so-called voluntary emissions traders have set up shop in Africa alongside the development NGO ranks. They famously raise funds by tried-and-true methods: Convincing rock stars (Coldplay, Pink Floyd, etc.) to pay cash for off-setting world tour carbon emissions, or by getting travellers like you and me to pay an $5 extra for air tickets. As was done by the Catholic Church in medieval times, these self-inflicted penalties buy carbon remissions for guilty Northerners through "development projects" that plant trees, promote small-scale village energy systems or help rural poor. Largely un-regulated, these efforts have much more to do with marketing and corporate responsibility than serious carbon reductions or new energy projects, and their record of "success" in actually reducing carbon emissions is extremely spotty.
* * *What started as a plan to bring new and clean energy sources to poor while simultaneously reducing conspicuous emissions of carbon in the North, has met neither of these goals in Africa. It has become a form of CO2lonialism where the money ends back in the north and where the rules of the game are rigged against the very people who were supposed to benefit.

Carbon is an item to be speculated on in the North: bought cheap, sold when prices rise, and off-loaded like toxic stock when the market crashes. In a very cozy world of deal-makers, the same companies that buy and sell carbon also develop projects, calculate carbon savings, validate projects and conduct highly-paid consultancies for multinationals, the World Bank and the UN.
Moreover, country incentives are perverse under Kyoto --- instead of encouraging countries to genuinely plan for reduced carbon emissions, the carbon trading system rewards developing countries that demonstrate a carbon-intensive path! The more you plan to emit, the more you can claim off on your CDM baselines.

But the worst thing about carbon trading is that it does not directly do that what needs to be done now in these days of rapidly accumulating global greenhouse gases. Instead of simply making the polluter pay or change his way, it allows the dirty player to claim credit for something that may or may or not have happened in a far away land. Instead of "acting locally and thinking globally", the opposite happens. Or not.

The little we have had of carbon trading is enough for Africa. It does not work. So, Mr. Obama, when the USA finally does come to the table and signs the Kyoto Protocol, we need the game to change, and we need America to help repair the broken system it help build. We need a much improved system for reducing carbon emissions for the world. We need a system that rewards, not carbon speculators, not deal-makers, not far-away faceless companies whose only care is their own balance sheet, but real builders of the clean energy systems needed today by 90% of Africa's population who go without power and lighting on a daily basis. Like you say, we have a long way to go, but we must face the task and get on with it.

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EarlyBird