Carbon trading has failed the planet

Published: 31/05/2009

Written by: Liz Walsh
Originally listed under: Edition 142 - June 2009

The tide has definitively turned against the government's proposed Carbon Pollution Reduction Scheme (CPRS). A year ago, many believed Rudd was sincere about tackling climate change, and thought the proposed carbon trading scheme was a step in the right direction.

But today, the mood is very different. There is widespread disappointment at Rudd's woefully inadequate response to climate change and recognition that the government is more committed to protecting the profits of big polluting companies than taking real action to avert the enormous threat to our planet.

In February this year, over 150 green groups, including Greenpeace and Friends of the Earth, met in Canberra and committed to a campaign against the CPRS.

At the time, the Australian Greens, while critical of the CPRS, were still hoping that Rudd might commit to stronger emissions targets. But after Rudd announced changes to the CPRS in May, granting greater concessions to polluting industries, the Greens opposed the legislation, saying that the changes "make Rudd's 'worse than useless' scheme even worse".

Not all green groups have joined the growing chorus to reject Rudd's CPRS. Shamefully, a number have backed Rudd's policy, giving the government a green cover. They include the Australian Conservation Foundation, the World Wildlife Fund and the Climate Institute. The Australian Council of Trade Unions and Australian Council of Social Services have also signed up to support the CPRS.

I say shamefully, because if implemented the carbon trading scheme will cement Australia's reliance on a fossil fuel-based economy while exacerbating economic inequalities by forcing up the cost of basic necessities, such as electricity and gas, for workers and the poor.

Rudd now proposes handing out up to 95 per cent of the carbon permits for free (up from 90 per cent), to what he's labelled "emissions intensive, trade-exposed industries". The government has also proposed allocating $200 million from the Climate Change Action Fund for direct cash payments to corporate polluters in 2009-10.

Changes to the scheme include holding the price of carbon to $10 a tonne for the first year, further delaying any financial incentive for corporate polluters to change their dirty production methods. All up, big polluters are set to be rewarded an obscene $9 billion-plus in publicly-funded handouts. According to the Productivity Commission, this would double the Federal Government's spending on industry support.

It's not surprising then that the Business Council of Victoria and the Australian Industry Group have enthusiastically backed the scheme. It poses no challenge to their economic interests.

To justify backing the CPRS, green groups such as the ACF point to the government's new maximum emissions reduction target which has been increased from 15 to 25 per cent by 2020. But this is disingenuous. The only target the government has committed to is an unacceptable 5 per cent emissions reduction that will guarantee catastrophic climate change. The conditions attached to the new maximum target make it almost impossible that it will be put into practice. The Greens have rightly argued that this "hypothetical 25 per cent target" is an "almost irrelevant green undermine criticism."

Another contemptible feature of the CPRS is that it would be possible to outsource the entirety of the emissions reductions by buying carbon credits on the market, generated from supposedly green projects in developing countries. Not a single tonne of carbon would have to be cut by Australian companies themselves.

This "offsetting" market is rife with corruption. UN sources suggest that up to 20 per cent of offsetting projects don't actually produce any cuts in emissions and were wrongly approved due to "gross incompetence, rule-breaking and possible fraud". Besides, many "genuine" carbon credits are generated by some of the worst corporate polluters in developing countries. For example, the sponge iron manufacturers in India have taken over farm land, depleted water and polluted the air, causing all sorts of health problems - yet they're awarded carbon credits by claiming they're making minor improvements in their industrial operation that hypothetically would not have been made otherwise.

Any progressively-minded person should reject such an outrageous set-up. And the more resolute opposition in Australia to the CPRS is certainly welcome. But most opposition to the CPRS is restricted only to the specifics of the model. The Greens for instance state that they "support an emissions trading scheme that protects the environment, not polluters." However, we need to reject carbon trading and other market-based "solutions" root and branch because they won't stop climate change. This is because they are based on an untenable contradiction, that the cause of global warming - the unplanned and unfettered capitalist market - can also be the solution.

To avert the enormous threat posed by climate change we need a radical shift in every sphere of activity, from energy production, transportation, housing and town planning, to agriculture and commodity production. To achieve this, enormous levels of investment in infrastructure and technology, as well as planning and coordination are needed. Relying on the market as the main mechanism to make this shift is plainly a rank absurdity.

Surely, the deepest economic crisis for over half a century should have demolished any illusions that leaving it to the capitalist market can solve the problem. In the market profits are king and capital flows to whatever area will make the biggest profits instead of what's needed to improve our lives or protect the sustainability of our planet.

In theory there is nothing inherent in capitalism that sets it against deriving energy from renewable sources. However, now that capitalism has evolved with fossil fuel energy at its heart, worldwide it's estimated that $13 trillion dollars of capital is invested in infrastructure directly related to oil and gas production, refining and use. Corporations and governments won't just write this investment off without a massive fight.

And with the world economic crisis squeezing profits and draining credit for new projects, governments and corporations are even less likely to abandon existing investments to embark on extensive investment in renewable energy.

We can't rely on the Rudd government or the capitalist market to bring about the wholesale shift in the economy that's needed. What's required is a mass movement that can argue and fight for these changes; a movement powerful enough to take on the vested interests blocking sustainable development and force the government to take action. But ultimately, saving the environment is intimately tied up with the project of getting rid of the whole exploitative, dirty, destructive, capitalist system that's responsible for the mess in the first place.