Transnational Institute - Carbon Trading

Transnational Institute | Carbon Trading
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Carbon Trading
A brief introduction
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Carbon Trade Watch (/users/carbon-trade-watch)

September 2009
See also
Carbon trading from Kyoto to Copenhagen
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(/primer/carbon-trading)
A guide to why carbon trading will not work in justly tackling climate change and what alternatives might.
How Not to Write an Effective Climate Policy

(/archives/smmith_climatepolicy)
Unveiling Carbon Trading (/article/unveilingcarbon-trading)
Profiting From Pollution: the G8 and climate change (/archives/smith_profitingfrompollution) The case against carbon trading (/archives
/smith_casegainst)
Contents: 1. 2. 3. 4. 5. 6. What is cap and trade? (#capandtrade) What are carbon offsets? (#carbonoffsets) So what's wrong with cap and trade? (#capandtradewrong) Will markets concerned with growth be able to deliver reductions of carbon? (#marketgrowth) What examples have there been of Cap and Trade schemes? (#capandtradeschemes) Why does European Union Emissions Trading Scheme (EU ETS) consistently grant over-allocation of pollution permits?
Also by Carbon Trade Watch

Fact Sheet: Carbon Offsets (/article/fact-sheetcarbon-offsets) December 2009 Fact Sheet: Cap and Trade (/article/fact-sheetcap-and-trade) December 2009 350 Reasons that Carbon Trading won't Work
(/article/350-reasons-carbon-trading-wont-work)
(#euoverallocation)
7. But didn't the second phase of the EU ETS (2008-2012) resolve this over-allocation? (#etsphase2) 8. But isn't Phase II nevertheless leading to emissions reductions? (#etsphase2reductions) 9. So who profited from carbon trading? (#profits) 10. What about phase III of the EU ETS? (#etsphase3) 11. So what is the problem with carbon offsetting? (#offsetproblems) 12. Carbon offsets have serious negative social and local environmental impacts (#offsetimpacts) 13. Might reforestation programmes such as REDD work? (#redd) 14. What impact will new trading schemes have on offsetting and forest carbon markets? (#offsetexpansion) 15. What are sectoral credits? (#sectoralcredits) 16. But isn't carbon trading better than nothing? (#betterthannothing) 17. So what are the alternatives to carbon trading? (#alternatives)
November 2009 Carbon Trading (/primer/carbon-trading) September 2009 The Carbon Connection (/tnibook/carbonconnection) April 2008
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/global-economic-justice/transnational-companies)
Deforestation (/category/issues/environmentaljustice/deforestation)
Carbon trading is allowing industrialised countries and companies to avoid their emissions reduction targets. It takes two main forms: cap and trade and carbon offsetting. 1. What is cap and trade? Under cap and trade schemes, governments or intergovernmental bodies set an overall legal limit of carbon emissions in a certain time period (a cap) and then grant industries a certain number of licenses to pollute (carbon permits). Companies that do not meet their cap can buy permits from others that have a surplus typically, because they have been given an overly generous allowance in the first place. They can also purchase offsets. 2. What are carbon offsets? Carbon trading runs in parallel with a system of carbon offsets. Instead of cutting emissions themselves, companies, and sometimes international financial institutions, governments and individuals, finance emissions-saving projects outside the capped area to generate carbon credits which can also be traded within the carbon market. The UN's Clean Development Mechanism (CDM) is the largest such scheme with almost 1,800 registered projects in developing countries by September 2009, and over 2,600 further projects awaiting approval. Based on current prices, the credits generated by approved schemes will be worth around $35 billion by 2012. Although offsets are often presented as emissions reductions, what these projects do at their hypothetical best is to stabilise emission levels while moving them from one location to another, normally from Northern to Southern countries. In practice, this best case scenario is rarely seen, with the result being that offsetting increases emissions whilst also exacerbating social and environmental conflicts. 3. So what's wrong with cap and trade? There are fundamental theoretical flaws in the whole cap and trade scheme even before you look at the actual record of its implementation. This is because the scheme was never set up to directly tackle the key task of a rapid transition away from fossil fuel extraction, over-production and over-consumption. It seeks instead to quantifying existing pollution as a means to create a new tradeable commodity. Within this framework, traders invariably opt for the cheapest credits available at the time, but what is cheap in the short-term is not the same as what is environmentally effective or socially just. Some of the key problems with the cap and trade approach are:
Climate Talks (/category/issues/environmentaljustice/climate-talks)
Climate Justice (/category/issues/environmentaljustice/climate-justice)
Carbon Trading (/category/issues

/environmental-justice/carbon-trading)
Carbon Offsets (/category/issues/environmentaljustice/carbon-offsets)
Environmental Justice (/taxonomy/term/60) EU Emissions Trading Scheme (ETS)

(/category/tags/eu-emissions-trading-scheme-ets)
Clean Development Mechanism (/taxonomy

/term/242)
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1. The trade component does not reduce any emissions. It simply allows companies to choose between cutting their own emissions or buying cheaper carbon credits, which are supposed to represent reductions elsewhere 2. The cap has too many holes and sometimes caps nothing. The cap is only as tight as the least stringent part of the whole system. This is because credits are sold by those with a surplus, and the cheapest way to produce a surplus is to be given too many credits in the first place (hot air credits as a result of caps being set too high). The aim of trading is to find the cheapest solution for polluting industry, and it is consistently cheaper to buy hot air credits than to actually reduce emissions. Cap setting is a political process that is highly susceptible to corporate lobbying which means that there is invariable over-allocation of pollution permits. In fact, lobbying is encouraged through extensive industry stakeholder involvement 3. Offsets loosen the cap. While cap and trade in theory limits the availability of pollution permits, offset projects are a licence to print new ones. When the two systems are brought together, they tend to undermine each other since one applies a cap and the other lifts it. An offset is essentially a permit to pollute beyond the cap. Most current and proposed cap and trade schemes allow offset credits to be traded within them including the EU Emissions Trading Scheme (EU ETS) and the US cap and trade scheme (proposed in the 2009 American Clean Energy and Security Act, ACES)
4. Will markets concerned with growth be able to deliver reductions of carbon? The other problem is that markets are by essence growth-oriented, so look for new sources of accumulation. In carbon markets, this is achieved by increasing their geographical scope and the number of industrial sectors and gases they cover. Yet this contradicts the essence of tackling climate change which is about reducing use of fossil fuels and consumption. It is therefore not a surprise that introducing carbon as a commodity has resulted in new opportunities for profit and speculation. The carbon market is already developing the way of the financial market with the use of complex financial instruments (futures trading and derivatives) to hedge risk and increase speculative profit. This runs the risk of creating a carbon bubble. This is not a surprise, as it was created by many of the same people at the Chicago Climate Exchange who created the derivatives markets that led to the recent financial crash. 5. What examples have there been of Cap and Trade schemes? There have been a number of Cap and Trade markets the EU ETS, the United States Acid Rain Program, the Los Angeles Region Clean Air Markets (RECLAIM), the Chicago Emissions Reduction Market System (ERMS) and the Regional Greenhouse Gas Initiative. The EU ETS, established in January 2005, is the largest cap and trade scheme in operation worldwide and is the best for illustrating how carbon trading has failed in practice. 6. Why does European Union Emissions Trading Scheme (EU ETS) consistently grant over-allocation of pollution permits? Most cap and trade markets use projections of historical emissions provided by industry itself to calculate the initial caps. Industry has a clear incentive to overstate its past emissions to gain more credits. As a result, cap and trade markets start out with too many permits. This was true of the EU ETS which consistently awarded major polluters with more free pollution permits (called EUAs, European Union Allowances) than their actual level of carbon emissions. This means it gave them no incentive to reduce emissions, and as a result the price of the permits collapsed from a peak of 31 to end 2007 at 0.01 . In phase I (2005-2007) as a whole, according to the EU's own data, major polluters had permits worth 3.4 per cent more than their actual level of emissions. 7. But didn't the second phase of the EU ETS (2008-2012) resolve this over-allocation? The EU claims that it has learned from its mistakes and that the second phase of its scheme is working. Whilst it is true that for the first time in 2008, polluters were awarded fewer permits than their actual level of emissions, there is still over-allocation of permits: 1. The vast majority of factories and economic sectors are still over-allocated it is only the power sector that needs to purchase credits 2. The impact of the EU-wide recession means that the ETS as a whole
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will again be over-allocated in 2009 3. Corporations get the same number of credits even if they temporarily close or scale down operations for short-term economic reasons 8. But isn't Phase II nevertheless leading to emissions reductions? The EU claims emissions reductions of 3 per cent, or 50 million tons, in ETS sectors in 2008. The trouble is that at least 80 million tons of carbon offsets in the developing world were bought as part of the ETS in 2009 more than the level of the cap. So, again, the ETS does not require emissions reductions by companies in the EU. 9. So who profited from carbon trading? Companies receive most carbon credits for free. This is equivalent to a subsidy and with allocations made on the basis of historical emissions, the largest subsidy goes to the dirtiest industry (especially coal-fired power plants). Windfall profits also arise from an accounting trick around opportunity costs. Power companies choose to do the cheapest thing to meet their ETS target which is usually buying Clean Development Mechanism (CDM) credits but passing on costs as if they were doing the most expensive actually reducing emissions. Even power companies receiving free credits from the ETS have nevertheless passed on the cost of these credits to consumers. Research by marketanalysts Point Carbon and WWF calculated that the likely
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w i n d f a l l p r o f i t s m a d e b y p o w e r c o m p a n i e s i n p h a s e I I c o u l d b e b e t w e e n 2 3 a n d 7 1 b i l l i o n , a n d t h a
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t t h e s e p r o f i t s w e r e c o n c e n t r a t e d i n t h e c o u n t r i e s w i t h t h e h i g h e s t l e v e l o f e m i s s i o n s . A r c e l o r M
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i t t a l , t h e w o r l d s l a r g e s t s t e e l c o m p a n y , i s a n o t h e r t y p i c a l e x a m p l e . I t r o u t i n e l y r e c e i v e s a q u a
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r t e r t o a t h i r d m o r e c r e d i t s t h a n i t w o u l d h a v e n e e d e d t o e v e n b e g i n r e d u c i n g e m i s s i o n s . T h e c o m p a n y
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i s l i k e l y t o h a v e m a d e o v e r 2 b i l l i o n i n p r o f i t s f r o m t h e E T S b e t w e e n 2 0 0 5 a n d 2 0 0 8 , w i t h o v e r 5 0 0 m i
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l l i o n o f t h i s a c h i e v e d i n 2 0 0 8 a l o n e y e t h a s n e e d e d t o m a k e n o p r o a c t i v e c h a n g e s t o i t s e m i s s i o n s t o
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d o s o . 1 0 . W h a t a b o u t p h a s e I I I o f t h e E U E T S ? E U E T S p h a s e I I I r u n s f r o m 2 0 1 3 t o 2 0 2 0 , a n d t h e d e b a t e i
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n B r u s s e l s i s f o c u s s e d o n t h e r i s k o f c a r b o n l e a k a g e . T h i s r e l a t e s t o i n d u s t r y c l a i m s t h a t s t r i c t
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r e g u l a t i o n s i n o n e p a r t o f t h e w o r l d w i l l e n c o u r a g e o u t s o u r c i n g t o l o c a t i o n s w h e r e r e g u l a t i o n s a
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r e w e a k e r . I t i s a l r e a d y b e i n g u s e d a s a b l a c k m a i l t a c t i c b y i n d u s t r y t o r e d u c e i t s t a r g e t s o r o b l i g a
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t i o n s w i t h i n t h e E U E T S ( a n d o t h e r p r o p o s e d s c h e m e s i n A u s t r a l i a a n d t h e U S ) . O v e r h a l f o f t h e 2 5 8 i n d
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u s t r i a l s e c t o r s i n E u r o p e b e i n g a s s e s s e d f o r e x p o s u r e t o c a r b o n l e a k a g e u n d e r t h e E U E T S w i l l q u a l i
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f y f o r f r e e e m i s s i o n a l l o w a n c e s f r o m 2 0 1 3 , a c c o r d i n g t o a n i n i t i a l a s s e s s m e n t b y t h e E u r o p e a n C o m m
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i s s i o n . 1 1 . S o w h a t i s t h e p r o b l e m w i t h c a r b o n o f f s e t t i n g ? C a r b o n o f f s e t s a l l o w c o m p a n i e s a n d c o
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u n t r i e s t o a v o i d c u t t i n g t h e i r o w n e m i s s i o n s b y b u y i n g t h e i r w a y o u t o f t h e p r o b l e m w i t h t h e o r e t i c a
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l r e d u c t i o n s e l s e w h e r e . T h e r e a r e b o t h i n t e r g o v e r n m e n t s c h e m e s m o s t f a m o u s l y t h e U N C l e a n D e v e
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l o p m e n t M e c h a n i s m ( C D M ) a s w e l l a s v o l u n t a r y p r o g r a m m e s u n d e r t a k e n l a r g e l y f o r p u r c h a s e b y i n d i
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v i d u a l c o n s u m e r s . U n f o r t u n a t e l y b o t h s y s t e m s a r e d e e p l y f l a w e d : 1. S e l l i n g s t o r i e s . O f f s e t t i n g r
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e s t s o n a d d i t i o n a l i t y c l a i m s a b o u t w h a t w o u l d o t h e r w i s e h a v e h a p p e n e d , o f f e r i n g p o l l u t i n g c
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o m p a n i e s a n d f i n a n c i a l c o n s u l t a n c i e s t h e o p p o r t u n i t y t o t u r n s t o r i e s o f a n u n k n o w a b l e f u t u r e i n t
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o b a n k a b l e c a r b o n c r e d i t s . T h e E U a d m i t s t h a t a t l e a s t 4 0 p e r c e n t o f t h e s e a r e b o g u s , w h i l e a s u r v e y b
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y I n t e r n a t i o n a l R i v e r s f o u n d o v e r 6 0 p e r c e n t o f p r o j e c t s t o b e n o n a d d i t i o n a l . 2. O f f s e t s i n c r e a s
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e e m i s s i o n s . T h e n e t r e s u l t f o r t h e c l i m a t e i s t h a t o f f s e t t i n g t e n d s t o i n c r e a s e r a t h e r t h a n r e d u c e
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g r e e n h o u s e g a s e m i s s i o n s , d i s p l a c i n g t h e n e c e s s i t y t o a c t i n o n e l o c a t i o n b y a t h e o r e t i c a l c l a i m t
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o a c t d i f f e r e n t l y i n a n o t h e r . M o r e o v e r , i t k e e p s d e l a y i n g a n y r e a l d o m e s t i c a c t i o n a n d a l l o w s t h e e
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x p a n s i o n o f m o r e f o s s i l f u e l e x t r a c t i o n s . 3. M a k i n g t h i n g s t h e s a m e . T h e v a l u e o f C D M p r o j e c t s i s p r e m
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i s e d o n c o n s t r u c t i n g a w h o l e s e r i e s o f d u b i o u s e q u i v a l e n c e s b e t w e e n v e r y d i f f e r e n t e c o n o m i c a n
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d i n d u s t r i a l p r a c t i c e s , w i t h t h e u n c e r t a i n t i e s o f c o m p a r i s o n o v e r l o o k e d t o e n s u r e t h a t a s i n g l e c
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o m m o d i t y c a n b e c o n s t r u c t e d a n d e x c h a n g e d . T h i s d o e s n o t a l t e r t h e f a c t t h a t b u r n i n g m o r e c o a l a n d o
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i l i s i n n o w a y e l i m i n a t e d ( a n d c e r t a i n l y n o t i n t h e s a m e t i m e f r a m e ) b y b u i l d i n g m o r e h y d r o e l e c t r i
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c d a m s , p l a n t i n g m o r e t r e e s o r c a p t u r i n g t h e m e t h a n e i n c o a l m i n e s . 1 2 . C a r b o n o f f s e t s h a v e s e r i o
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u s n e g a t i v e s o c i a l a n d l o c a l e n v i r o n m e n t a l i m p a c t s T h e u s e o f d e v e l o p m e n t r h e t o r i c m a s k s t h e f
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u n d a m e n t a l i n j u s t i c e o f o f f s e t t i n g , w h i c h h a n d s a n e w r e v e n u e s t r e a m t o s o m e o f t h e m o s t h i g h l y p o l
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l u t i n g i n d u s t r i e s i n t h e S o u t h , w h i l e s i m u l t a n e o u s l y o f f e r i n g c o m p a n i e s a n d g o v e r n m e n t s i n t h e N
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o r t h a m e a n s t o d e l a y c h a n g i n g t h e i r o w n i n d u s t r i a l p r a c t i c e s a n d e n e r g y u s a g e . I n p r a c t i c e , c a r b
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o n o f f s e t p r o j e c t s h a v e m o s t o f t h e t i m e s r e s u l t e d i n l a n d g r a b s , l o c a l e n v i r o n m e n t a l a n d s o c i a l c o
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n f l i c t s , t h e d i s p l a c e m e n t o f I n d i g e n o u s P e o p l e s f r o m t h e i r t e r r i t o r i e s , a s w e l l a s t h e r e p r e s s i o
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n o f l o c a l c o m m u n i t i e s a n d m o v e m e n t s . 1 3 . M i g h t r e f o r e s t a t i o n p r o g r a m m e s s u c h a s R E D D w o r k ? T h e
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i n c l u s i o n o f t r e e p l a n t i n g a n d s i m i l a r s i n k s p r o j e c t s i n t h e C D M a n d c a p a n d t r a d e s c h e m e s i s a l s o
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u n d e r c o n s i d e r a t i o n . T h e s e p o s e a d d i t i o n a l m e a s u r e m e n t p r o b l e m s , a s m a n y p r o j e c t s a r e n o t a d d i
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t i o n a l , a r e d i f f i c u l t t o m e a s u r e , d o n o t i n c l u d e t h e u p k e e p o f t h e t r e e s a n d a s s u m e i n s t a n t a b s o r p t
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i o n o f a l r e a d y r e l e a s e d c a r b o n w h e n i n f a c t i t w i l l t a k e t h o u s a n d s o f y e a r s f o r t h e c a r b o n t o b e a b s o
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r b e d . R e f o r e s t a t i o n a l s o t e n d s t o c o u n t m o n o c u l t u r e p l a n t a t i o n s a s f o r e s t s , w h e n t h e y a r e n o t
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a s t h e y l a c k b i o d i v e r s i t y , a n d s o c o n t r i b u t e t o s o i l d e g r a d a t i o n ; a n d a l s o r e q u i r e i n t e n s i v e s y n t
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h e t i c f e r t i l i s e r s , w h i c h c o n t r i b u t e s i g n i f i c a n t l y t o c l i m a t e c h a n g e , w a t e r p o l l u t i o n a n d d a m a
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g e t o l o c a l p e o p l e s h e a l t h . S c h e m e s f o r R e d u c i n g E m i s s i o n s f r o m D e f o r e s t a t i o n a n d D e g r a d a t i o n
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( R E D D ) r e p e a t t h e e r r o r o f e m i s s i o n s t r a d i n g b y c o m m o d i f y i n g f o r e s t s . T h e y p r e s u m e t h a t d e f o r e s t
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a t i o n h a p p e n s b e c a u s e s t a n d i n g f o r e s t s m a k e l e s s m o n e y t h a n f o r e s t s t h a t a r e c u t d o w n . I n f a c t , t h e
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c o m m o d i f i c a t i o n o f f o r e s t s i s w h a t d r i v e s d e f o r e s t a t i o n . T h i s c o m m o d i f i c a t i o n i n c l u d e s t h e r o
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l e o f c o r p o r a t e a n d d e v e l o p m e n t b a n k i n v e s t m e n t i n n e w i n f r a s t r u c t u r e , m i n i n g a n d o i l e x t r a c t i o n
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p r o j e c t s ; i n d u s t r i a l l o g g i n g ; a n d l a n d c l e a r a n c e t o m a k e w a y f o r m o n o c u l t u r e p l a n t a t i o n s f o r t h e
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p u l p a n d p a p e r a n d p a l m o i l i n d u s t r i e s . R E D D i s l i k e l y t o f u e l p r o p e r t y s p e c u l a t i o n a n d s o e x a c e r b a
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t e l a n d c o n f l i c t s , d i s p o s s e s s i n g i n d i g e n o u s p e o p l e s a n d f o r e s t c o m m u n i t i e s . 1 4 . W h a t i m p a c t w i
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l l n e w t r a d i n g s c h e m e s h a v e o n o f f s e t t i n g a n d f o r e s t c a r b o n m a r k e t s ? T h e m o s t a c t i v e b u y e r s o f o f f
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s e t c r e d i t s i n 2 0 0 8 w e r e E u r o p e a n c o m p a n i e s , w h i c h b o u g h t 8 0 m i l l i o n c r e d i t s f r o m t h e C D M o r J o i n t I
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m p l e m e n t a t i o n p r o j e c t s ( a s i m i l a r U N s c h e m e , o p e r a t e d i n c o u n t r i e s w h i c h h a v e e m i s s i o n s r e d u c t i
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o n c o m m i t m e n t s u n d e r t h e K y o t o P r o t o c o l ) a s e i t h e r a c h e a p e r a l t e r n a t i v e t o r e d u c i n g t h e i r o w n e m i
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s s i o n s ( u n d e r E T S ) , o r f o r t h e p u r p o s e o f s p e c u l a t i o n a n d r e s a l e . B u t t h i s m a r k e t i s l i k e l y t o e x p a
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n d m a s s i v e l y i f t h e A m e r i c a n C l e a n E n e r g y a n d S e c u r i t y A c t ( A C E S ) i s p a s s e d , w h i c h p r o p o s e s t o a l l o
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w U S c o m p a n i e s t o p u r c h a s e f r o m 1 t o 1 . 5 b i l l i o n i n t e r n a t i o n a l o f f s e t s e v e r y y e a r . T h i s w o u l d s p u r o
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n a m a s s i v e i n c r e a s e i n d a m a g i n g o f f s e t p r o j e c t s , c r e a t i n g e n o r m o u s p r e s s u r e t o r e d u c e t h e a l r e a
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d y i n a d e q u a t e c h e c k s o n t h e i r e n v i r o n m e n t a l i n t e g r i t y . 1 5 . W h a t a r e s e c t o r a l c r e d i t s ? S e c t o r
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a l c r e d i t s w o u l d i n t r o d u c e n e w o f f s e t s a s p a r t o f w h a t a r e c a l l e d N a t i o n a l l y A p p r o p r i a t e M i t i g a t i
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o n A c t i o n s ( N A M A s ) i n t h e c l i m a t e p o l i c y j a r g o n . T h i s i s o n e o f a n u m b e r o f p r o p o s a l s c u r r e n t l y b e i n
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g d e b a t e d f o r i n c l u s i o n i n a n e w U N c l i m a t e t r e a t y . T h e b a s i c i d e a i s t h a t d e v e l o p i n g c o u n t r i e s s h o
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u l d c o m m i t t o r e d u c i n g t h e i r g r e e n h o u s e g a s e m i s s i o n s i n a n i n d i c a t i v e r a n g e b e l o w b u s i n e s s a s u s
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u a l , a s t h e d r a f t o f t h e G 8 s L A q u i l a d e c l a r a t i o n i n J u l y 2 0 0 9 p u t s i t . T h i s d e v i a t i o n f r o m a n a s s
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u m e d f u t u r e t r a j e c t o r y w o u l d b e c o u n t e d a s a r e d u c t i o n ( a l t h o u g h i t n e e d b e n o t h i n g o f t h e s o r t ) a
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n d t r a d e d t o h e l p i n d u s t r i e s i n d e v e l o p e d c o u n t r i e s a v o i d r e d u c i n g t h e i r o w n e m i s s i o n s . T h e p r i v a
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t e m o n e y f l o w i n g t h r o u g h t h e s e c a r b o n m a r k e t s c o u l d a l s o b e d o u b l e c o u n t e d a s p a r t o f t h e f i n a n c i
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a l c o m m i t m e n t t h a t t h e i n d u s t r i a l i s e d c o u n t r i e s a g r e e d t o m a k e a t t h e U N C l i m a t e C o n f e r e n c e i n B a l
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i . 1 6 . B u t i s n ' t c a r b o n t r a d i n g b e t t e r t h a n n o t h i n g ? N o . A s c a r b o n t r a d i n g h e l p s t o a v o i d c h a n g e a
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n d e v e n i n c r e a s e s e m i s s i o n s w h i l e e x a c e r b a t i n g l o c a l c o n f l i c t s , i t i s n o t a q u e s t i o n o f a l t e r n a t i
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v e s t o c a r b o n t r a d i n g b u t r a t h e r o f t a k i n g m e a s u r e s t h a t a c t u a l l y t a c k l e c l i m a t e c h a n g e . 1 7 . S o w h
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a t a r e t h e a l t e r n a t i v e s t o c a r b o n t r a d i n g ? C a r b o n m a r k e t s s h o u l d b e d i s m a n t l e d , s t a r t i n g w i t h o f
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f s e t s . A c l e a r i n t e n t i o n t o d i s c o n t i n u e c a r b o n m a r k e t s c a n f a t a l l y u n d e r m i n e t h e m e v e n i n a d v a n c e
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o f l e g i s l a t i v e a c t i o n . A l t e r n a t i v e s t h e n n e e d t o b e d e v e l o p e d t h a t a r e p r o p e r l y c o n s u l t e d a n d d e v
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e l o p e d t o g e t h e r w i t h l o c a l c o m m u n i t i e s t o p r e v e n t a r e p e a t o f t h e d i s p o s s e s s i o n a n d s o c i a l i n j u s t
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i c e c a u s e d b y o f f s e t t i n g s c h e m e s . A r a n g e o f d i f f e r e n t a p p r o a c h e s w i l l b e n e e d e d b u t m a y i n c l u d e :
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R e c o g n i t i o n o f e x i s t i n g c l i m a t e s o l u t i o n s . T h e v a s t r a n g e o f s o l u t i o n s t h a t a l r e a d y e x i s t w h i c h
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t e n d t o b e d i s t i n g u i s h e d b y t h e i r s e n s i t i v i t y t o t h e l o c a l c o n t e x t s i n w h i c h t h e y o p e r a t e , a r e o v e r
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l o o k e d i n f a v o u r o f t h e a c c u m u l a t i o n o f l a r g e s c a l e t e c h n o l o g i c a l f i x e s o r m a r k e t b a s e d s c h e m
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e s L e a v e f o s s i l f u e l s i n t h e g r o u n d . P r o p o s a l s t o h a l t n e w c o a l p o w e r p l a n t s a n d t h e e x p l o r a t i o n o f n
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e w a n d o f t e n u n c o n v e n t i o n a l s o u r c e s o f o i l e x t r a c t i o n a r e a t t h e f r o n t l i n e o f t h e s t r u g g l e f o r c l
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i m a t e j u s t i c e a n d s h o u l d f o r m p a r t o f a r a p i d t r a n s i t i o n t o a p o s t f o s s i l f u e l e c o n o m y R e d i s c o v e r
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i n g e n v i r o n m e n t a l p r o t e c t i o n . T h e r e a r e a b r o a d r a n g e o f e n v i r o n m e n t a l p o l i c y i n s t r u m e n t s t h a t h
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a v e p r o v e n t o b e m o r e e f f e c t i v e t h a n m a r k e t b a s e d a p p r o a c h e s r a n g i n g f r o m e f f i c i e n c y s t a n d a r d s
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f o r e l e c t r i c a l a p p l i a n c e s a n d b u i l d i n g s t o f e e d i n t a r i f f s f o r r e n e w a b l e s . T h e r e d i s c o v e r y o f s u
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c h m e a s u r e s c o u l d f o r m p a r t o f a s o l u t i o n N e w r e v e n u e s : t a x a n d / o r e n d c u r r e n c y a n d f u e l s p e c u l a t i o
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n . R a t h e r t h a n a r e g r e s s i v e c a r b o n t a x , r e v e n u e c a n b e g e n e r a t e d b y a t a x o n c u r r e n c y s p e c u l a t i o n . A
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h e a v y t a x o r a n e n d t o s p e c u l a t i o n o n f o s s i l f u e l p r i c e s w o u l d a l s o h e l p a s a t r a n s i t i o n a l m e a s u r e . T
94 of 116
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h i s s h o u l d b e a c c o m p a n i e d b y p r o a c t i v e p o l i c y m e a s u r e s t o t a c k l e f u e l p o v e r t y , s u c h a s a b a n o n p r e
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p a y m e t e r i n g R e n e w a b l e e n e r g y s h o u l d b e s u p p o r t e d b u t n o t u n c r i t i c a l l y w i t h t h e i n v o l v e m e n t o f
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l o c a l p o p u l a t i o n s a n d n o t a s b a s i s f o r s u s t a i n i n g e x p a n s i o n s i n f o s s i l u s e o r s u p p o r t o f u n s u s t a i n
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a b l e m o d e l o f i n d u s t r i a l e x p a n s i o n P u b l i c e n e r g y r e s e a r c h . P r i v a t e r e s e a r c h o n e n e r g y a l t e r n a t i
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v e s a n d u s e f a v o u r s l e a s t c o s t f a l s e s o l u t i o n s ( e g . a g r o f u e l s , h y d r o e l e c t r i c d a m s , n u c l e a r p o w
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e r ) r a t h e r t h a n e n v i r o n m e n t a l l y e f f e c t i v e a l t e r n a t i v e s , s o i s l e s s e f f e c t i v e t h a n p u b l i c r e s e a r
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c h . H o w e v e r , t h i s w o u l d n e e d t o b e a l l i e d w i t h t h e d e m o c r a t i c t r a n s f o r m a t i o n o f t h e i n s t i t u t i o n s o
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f e n v i r o n m e n t a l g o v e r n a n c e , t h e a g e n d a f o r w h i c h c u r r e n t l y t e n d s t o b e s e t b y t r a n s n a t i o n a l c o r
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p o r a t i o n s R e e s t i m a t i n g e n e r g y d e m a n d . C u r r e n t m o d e l s p r e s u m e l i m i t l e s s g r o w t h a n d o v e r s t a t e f
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u t u r e e n e r g y d e m a n d , w h i c h h a s e n c o u r a g e d o v e r s u p p l y a n d k e p t p r i c e s l o w w h i c h i s , i n t u r n a k e y s t
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r u c t u r a l d r i v e r o f o v e r c o n s u m p t i o n . T h e T r a n s i t i o n T o w n s m o v e m e n t i s g o i n g s o m e w a y t o w a r d s r e -
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e s t i m a t i n g d e m a n d w i t h i t s E n e r g y D e s c e n t A c t i o n P l a n s , b u t l a c k s a s t r u c t u r a l a n a l y s i s o f h e a v
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y i n d u s t r y u s e ( o r c a p i t a l i s t a c c u m u l a t i o n ) a n d i s o f t e n d i v o r c e d f r o m o r g a n i s i n g f o r m o r e e q u i t a
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b l e d i s t r i b u t i o n o f e n e r g y C h a n g i n g e c o n o m i c c a l c u l a t i o n s . C o s t b e n e f i t a c c o u n t i n g e i t h e r f a
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i l s t o t a k e a c c o u n t o f e n v i r o n m e n t a l o r s o c i a l c o s t s , o r i s g r o s s l y r e d u c t i o n i s t i n i t s a s s u m p t i o n
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s . C h a l l e n g i n g t h e g r o w t h f e t i s h . I t i s o f t e n c l a i m e d t h a t c o n t i n u e d G D P g r o w t h c a n g o h a n d i n h a n
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d w i t h r e d u c t i o n s i n e m i s s i o n s . H o w e v e r , t h e r e i s n o e v i d e n c e t h a t a d v a n c e d e c o n o m i e s a r e s i g n i
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f i c a n t l y r e d u c i n g t h e i r c a r b o n f o o t p r i n t s , o r t h a t s u c h a t r a n s f o r m a t i o n c o u l d h a p p e n q u i c k l y e n
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o u g h t o r e d u c e e m i s s i o n s . O n t h e p o s i t i v e s i d e , G D P i s a v e r y p o o r i n d i c a t o r o f h u m a n w e l l b e i n g , s
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o i s n o t a c o n d i t i o n f o r s o c i a l i m p r o v e m e n t o r a g o o d l i f e . I f t h e o b s e s s i o n w i t h e c o n o m i c g r o w t h i s s
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e t a s i d e , i t b e c o m e s e a s i e r t o s e e h o w t a c k l i n g c l i m a t e c h a n g e a n d m a i n t a i n i n g a s u s t a i n a b l e a n d e n
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j o y a b l e l i f e a r e f a r f r o m c o n t r a d i c t o r y g o a l s .
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