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(Working Paper #6) Carbon Markets After Paris: Trading in Trouble

By Sean Sweeney - Trade Unions for Energy Democracy, March 11, 2016

The 2015 Paris Climate Agreement enshrines emissions trading schemes (ETSs) as a key mechanism for reducing emissions. But are ETSs effective?

Since the early 1990s, “putting a price on carbon” has been, perhaps, the primary policy proposal for fighting climate change by reducing greenhouse gas emissions. Whether through carbon taxes or “cap-and-trade” ETSs, proponents of carbon pricing see it as a way to guide investment toward green solutions without the need for more decisive government interventions. ETSs, in particular, have been favored by businesses and neoliberal policy makers seeking to limit emissions without disrupting business-as-usual.

It has been a decade since the European Union established the world’s largest ETS. In the long aftermath of the 2008-9 financial crisis, the price on carbon has been too low to incentivize investors to move away from fossil fuels.

Union Approaches

The European Trade Union Confederation (ETUC)—a supporter of the EU ETS—has called for policies that would raise the price on carbon while also expressing concern about “carbon leakage” —where companies move polluting activities (and associated jobs) to jurisdictions without price constraints on pollution. Such a position threads the needle of trade union debates around the EU ETS without resolving the underlying tensions—nor, it should be noted, shifting EU policy in any appreciable way. With the Paris Agreement giving an even more prominent role to carbon pricing, unions around the world are likely to face similar debates.

In the TUED Working Paper Carbon Markets After Paris, TUED Coordinator  Sean Sweeney argues that it is time for unions to reevaluate their stance on emissions trading. Market-based solutions may be appealing to business interests and their political allies, but it’s going to take direct governmental action to guide a transition to a just, democratic, and sustainable energy system and a low-carbon economy.  The now battered neoliberal consensus finds public and democratic ownership and control of a key economic sector to be anathema, but it is precisely what is needed if we are serious about combating climate change.

TUED Disclaimer: This paper represents the views of its author.  The opinions expressed here may or may not be consistent with the policies and positions of unions participating in TUED. The paper is offered for discussion and debate.

The Cost of Caring for the Land: Attacks on Communities in Resistance in Mexico

By Analy S. Nuño - It's Going Down, January 12, 2018

In the last decade, indigenous and mestizo communities in Michoacán, Jalisco, and Colima have confronted developers, mining and other extractive industries, governmental authorities, and criminal gangs to protect their territories from dispossession and destruction. Along the way, they have come up against threats, disappearances, criminalization, and death.

The body of the P’urhépecha indigenous woman Guadalupe Campanur Tapia was found on January 16th, around the 15th kilometer of the Carapan-Playa Azul highway, in a place known as Irapio. She had disappeared several days earlier.

Guadalupe, 32, was a woman who had broken the mold of her community by joining the group of forest defenders and participating actively in the search for security, justice, and territorial reclamation. The journalist Alejandra Guillén, author of the book Guardians of the Territory: Security and Community Justice in Cherán, Nurío, and Ostula, defined her as “one of the critical voices who pointed out internal contradictions — because she knew that the struggle is built day by day, starting with the small and the everyday things.”

Guadalupe was the founder of the Community Patrol, the movement against illegal logging, and a member of the “Cherán K’eri: Knowing and Recognizing our Territory” project.

On many occasions, she carried out searches for community members who had been reported as disappeared. Her murder is the latest in a series of killings of activists and land defenders in the region, including Jalisco, Colima, and Michoacán, whose natural resources are targeted by both capitalist interests and criminal groups.

“This can be interpreted as a message to intimidate and silence those who genuinely aim to re-value life through community actions that go beyond resistance. It is also a means of terrorizing women, and, on top of everything, it fits within a broader ethnocidal technique intended to diminish the struggle for life carried on by the P’urhépecha community of Cherán,” wrote her friend, Carolina Lunuen.

Still, the attacks occurring in this region are only a sampling of the systematic attacks that have been carried out against social leaders, activists, and land defenders nationwide in the last decade.

We can’t rely on corporations to save us from climate change

By Christopher Wright and Daniel Nyberg - London School of Economics, January 30, 2018

Climate change is now the ever-present reality of human experience. Late last year we witnessed a procession of huge hurricanes batter the US and Caribbean, the largest wildfires on record burn through California, and in Australia, despite the death of up to half of the Great Barrier Reef in back-to-back coral bleaching events, political support for new mega-coal mines and coal-fired power stations. While there is now a clear scientific consensus that the world is on track for global temperature increases of 4 degrees Celsius by century’s end (threatening the very viability of human civilization), our political and economic masters continue to double down on the fossil fuel bet, transforming perhaps the greatest threat to life on this planet into ‘business as usual’.

One response to the failure of government has been a belief that markets and corporate innovation will provide the solution to the climate crisis. As business tycoon Richard Branson has proclaimed ‘our only option to stop climate change is for industry to make money from it.’ Thus while business corporations are major contributors to escalating GHG emissions, they are also often presented as offering innovative ways to decarbonise our economies. But how much faith can we place in corporations to save us from climate change?

In a recently published paper, we explore how major business corporations translate the grand challenge of climate change into strategies, policies and practices over an extended period of time. Our research involved a detailed cross-case analysis of five major corporations operating in Australia over ten years, from 2005 to 2015. During this period, climate change became a central issue in political and economic debate, leading to a range of regulatory, market, and physical risks and opportunities, and each of these five companies were leaders in publicly promoting their engagement with this issue.

Was 2017 the year that the tide finally turned against fossil fuel projects?

By Suzanne Dhaliwal - Open Democracy, December 21, 2017

Last week AXA announced its sell off of €700m of tar sands investments from its balance sheets, covering 25 tar sands companies and 3 major pipelines projects. Thomas Buberl, the company’s chief executive, called the projects “not sustainable and therefore also not insurable.”

This was a significant win for activists like the UK Tar Sands Network and the Indigenous Environmental Network, who have been calling on financial institutions to end investments in the tar sands projects and pipelines since 2009, and who have most recently taken their campaigning efforts to the insurance industry.

The AXA decision comes just weeks after BNP Paribas broke the news that it will no longer finance new shale or tar sands projects, nor work with companies that mainly focus on those resources. Last Friday, Norway’s largest life insurer, KLP announced that it would exclude from its portfolio any firms that derive 30 percent or more of revenues from the extraction of tar sands. In the same week the World Bank announced it would cease financing upstream oil and gas after 2019.

It’s welcome news. Based on the financial risks, climate impacts and indigenous rights violations, we have seen a significant shift in financial institutions backing fossil fuels. The Bank of England now recognizes the monetary risks associated with climate change and is advising the central banks and governments to get out of highly polluting fuels due to the pending carbon bubble and the bad business associated with ‘extreme’ energy extraction. As a result BP, Shell, Exxon and others have pulled out of major tar sands projects and pipelines.

And now the insurance industry is beginning to act more meaningfully. As early as the 1970s, the insurance industry acknowledged the risk of climate change and the need for the sector to take meaningful action. Insurers have already seen the costs of climate related catastrophes and extreme weather events skyrocket, compelling them to be among some of the first movers divesting from coal and also develop policies to stop the underwriting of new fossil fuel projects. But they have massive holdings in fossil fuels. And so they need public pressure to push them to divest.

So despite last week’s news, we must be careful not to pop those champagne corks too fast. Significant action and commitment has yet to be seen by Asian and American insurers. Moreover, regenerative steps need to be taken to ensure that the communities whose livelihoods depend on fossil fuels benefit from the transition to the clean energy economy. Simply put, who will be responsible for the massive clean-ups of stranded projects and direct the green energy transition?

Beware the Green Corporate Scam: the 100% Renewable Façade

By José Madero - CounterPunch, December 8, 2017

A few months ago, Google announced that they will achieve their goal of being 100% powered by renewable energy in 2017 [1]. They are not the only corporation with such lofty goals. Google is joined by GM, Apple, Coca Cola, and more than one hundred companies who have also pledged to go “100% renewable” [2].

It would be easy to believe that this means a great victory for the planet, that the demise of fossil fuels is incoming, that environmentalism has won and that climate change will soon be a thing of the past. Yet the foul smell emerging from tax-dodging transnationals jumping all together into a bandwagon cannot be ignored.

Despite their claims, none of the companies in the RE100 list is actually going to receive all of its energy from renewable sources. The “100% renewable” label is a façade, a marketing gimmick used by corporations to pretend they are the good guys while their unfettered thirst for profits continues unopposed. This corporate lie is enabled by the abuse of Renewable Energy Certificates (RECs) which allow companies to buy their way into “green” without having to change any of their practices. Here is Google’s actual claim:

“Google will buy, on an annual basis, the same amount of MWh of renewable energy as the MWh of electricity that we consume for our operations around the world” [3].

Behold the magic of the RECs. When a renewable energy facility creates one MWh of energy, it not only creates electricity, it also gets a certificate, a REC, which states that one MWh of clean energy was created. The REC can then be sold, either together with the electricity or separate from it. The purchaser of the REC can then claim to have bought “green energy” without having ever done so. This means that you can buy 100 MWhs from your local utility provider, most likely produced in coal or natural gas power plants, and as long as you also buy 100MWhs worth of RECs, you can claim to be “powered by 100% renewables” even if that clearly is not the case. In that sense, RECs are the ultimate virtue signalers. They allow corporations to proudly wear the green badge without having to change in any way their energy consumption.

Do electric vehicles create good green jobs? An Amnesty International report on Supply Chains says No

By Elizabeth Perry - Work and Climate Change Report, November 27, 2017

November brought  exciting news about electric vehicles:  BYD,  one of China’s leading electric carmakers, announced that it will open an assembly plant in a yet-to-be-announced location in Ontario in 2018, (though according to the Globe and Mail article,   the new plant will only create about 40 jobs to start ).  Also in mid-November, Tesla revealed a concept design for  an  electric truck in an glitzy release by Elon Musk , and the Toronto Transit Commission announced its plan to buy its first electric buses, aiming for an  emissions-free fleet by 2040.    Unnoticed in the enthusiasm for these announcements was a report released by Amnesty International on November 15:    Time to Recharge: Corporate action and inaction to tackle abuses in the cobalt supply chain  which concludes : “ Major electronics and electric vehicle companies are still not doing enough to stop human rights abuses entering their cobalt supply chains, almost two years after an Amnesty International investigation exposed how batteries used in their products could be linked to child labour in the Democratic Republic of Congo (DRC).” (That earlier report was This is what we die for   released in January 2016) .

Under the heading “The Darker side of Green Technology”, Time to Recharge states: “Renault and Daimler performed particularly badly, failing to meet even minimal international standards for disclosure and due diligence, leaving major blind spots in their supply chains. BMW did the best among the electric vehicle manufacturers surveyed.”   Tesla was also surveyed and ranked for its human rights and supply chain management; Tesla’s policies are described in its response to Amnesty International here.  And further, Tesla has come in for suggestions of  anti-union attitudes  in “Critics Suggest Link to Union Drive After Tesla Fires 700+ Workers” , in  The Energy Mix (Oct. 23), and in an article in Cleantechnica  .

The Amnesty International report is a result of a survey of 29 companies, including consumer electronics giants Apple, Samsung Electronics, Dell, Lenovo, and Microsoft, as well as electric vehicle manufacturers BMW, Renault and Tesla.  Questions in the survey were based on the five-step due diligence framework set out by the Organization for Economic Co-operation and Development (OECD) in its Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.  Detailed responses from many of the surveyed companies are here. 

Climate Summit’s Solution to Global Warming: More Talking

By Pete Dolack - CounterPunch, November 24, 2017

The world’s governments got together in Germany over the past two weeks to discuss global warming, and as a result, they, well, talked. And issued some nice press releases.

Discussing an existential threat to the environment, and all who are dependent on it, certainly is better than not discussing it. Agreeing to do something about it is also good, as is reiterating that something will be done.

None of the above, however, should be confused with implementing, and mandating, measures that would reverse global warming and begin to deal concretely with the wrenching changes necessary to avoid flooded cities, a climate going out of control, mass species die-offs and the other rather serious problems that have only begun to manifest themselves in an already warming world.

The 23rd Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), or COP23, wrapped up on November 17 in Bonn. Fiji was actually the presiding country, but the conference was held in Bonn because Fiji was not seen as able to accommodate the 25,000 people expected to attend. The formal hosting by Fiji, as a small Pacific island country, was symbolic of a wish to highlight the problems of low-lying countries, but that this was merely symbolic was perhaps most fitting of all.

These conferences have been held yearly since the UNFCCC was adopted in 1992 at the Rio Earth Summit. Two years ago, at COP21 in Paris, the world’s governments negotiated the Paris Accord, committing to specific targets for reducing greenhouse-gas emissions. Although capping global warming at 2 degrees Celsius (as measured from the 19th century as the Industrial Revolution took off around the world) has been considered the outer limit of “safe” warming, a goal of halting global warming at 1.5 degrees was adopted at Paris. The catch here is that the goals adopted are far from the strength necessary to achieve the 2-degree goals, much less 1.5 degrees.

Before we explore that contradiction, let’s take a brief look at the self-congratulatory statements issued at the Bonn conference’s conclusion.

Nature Lovers May #OptOutside on Black Friday, but They Consume Resources Year-Round

By Matthew Klingle - Common Dreams, November 26, 2017

While shoppers scramble for Black Friday bargains this year, outdoor retailer REI is closing its 154 U.S. stores. This is the third consecutive year that the Seattle-based company will ignore the frenzy that traditionally marks the start of the holiday shopping season. REI’s nearly 12,000 employees will get a paid holiday and will not process any online orders.

Instead, REI exhorts workers and customers to get outside with family and friends. #OptOutside, a Twitter hashtag that REI coined to promote its anti-Black Friday, has been widely adopted by outdoor lovers, as well as environmental groups and businesses that partner with REI to promote this event.

The campaign has drawn international praise from the advertising industry and has become a yearly phenomenon. State parks from Oregon to Indiana, often in concert with local nonprofits, offer free admission and other perks on Black Friday. This year REI is launching an “experiential search engine” where users can share photos and video of their favorite outdoor destinations, augmented with information such as directions to trailheads or events celebrating our nation’s public lands.

Many observers have praised REI for mixing business savvy with crunchy acumen. But how did REI and other outdoor companies align themselves with conservation? How do they square selling expensive apparel and promoting carbon-spewing tourism with their customers’ love for the outdoors? And how radical is “Green Friday,” especially if the OptOutsiders are carrying backpacks stuffed with the latest gear made from precious petroleum, rare metals and pricey fibers?

The answer is that shoppers have long expressed their affection for nature in what they buy. Consumption and environmental concerns, past and present, fit together as snugly as a foot in a beloved hiking boot.

Groundbreaking “Carbon Pricing Report” Released by Indigenous Environmental Network and Climate Justice Alliance at COP 23

By Jade Begay - Common Dreams, November 16, 2017

WASHINGTON - While city, state, and national leaders gather at the UN Climate Talks to launch and implement platforms and agendas that promote carbon trading, carbon offsets, and REDD+, the Indigenous Environmental Network and the Climate Justice Alliance take a bold stance to reject and challenge these so-called innovative solutions by releasing the “Carbon Pricing Report: A Critical Perspective for Community Resistance.”

This report provides in-depth context to why carbon market systems will not mitigate climate change, will not advance adaptation strategies, will not serve the most vulnerable communities facing climate change impacts and only protect the fossil fuel industry and corporations from taking real climate action.

Furthermore, the publication is the first of its kind to be released in the United States and will help frontline communities and grassroots organizations articulate crucial points to challenge carbon markets and climate change. It is a tool in building a carbon market grassroots resistance.

On Wednesday November 15, Tom Goldtooth, co-author of the report, and members from communities who are impacted first and worst by climate change spoke at the UN Climate Change Talks to challenge nations, cities, and businesses who are promoting carbon markets as they violate Indigenous Rights and make way for more fossil fuel extraction near Indigenous, Black, and Brown communities

Key points of Carbon Pricing Report:

  • Carbon trading, carbon offsets and REDD+ are fraudulent climate mitigation mechanisms that help corporations and governments to continue extracting and burning fossil fuels.
  • Revenues distributed to communities from carbon trading or carbon pricing never compensate for the destruction wrought by the extraction and pollution process required to obtain that revenue.
  • The injustices, racism and colonialism of carbon pricing schemes have worldwide effects that require international resistance.

This publication will help communities and organizations articulate crucial points to resist carbon pricing and climate change.

**Digital Version of Carbon Report**

The following is a statement from the co-authors of the report:

"The linking of carbon markets across the United States and the World is a tool that fossil-fuel companies have shaped and built to continue to extract and dump on frontline communities.  Carbon pricing is a slap on the wrist, a reward really.  History shows that, it does not have the ability to move us away from oil addiction, or reach our targets for climate justice. The only true way to reach our goals of 1.5C is to stop the fossil fuel machine at source, to provide stricter regulations, and to hold polluters accountable for their legacy of pollution.  We need this Just Transition to survive! This report demonstrates through a historical and international lens the mounting threats these markets have wreaked on frontline communities across the world.  It is a call to action for community resistance and resilience." -- Angela Adrar, Executive Director of the Climate Justice Alliance.

"Our Indigenous Peoples and people of color climate justice alliances saw a need to put together a publication that demystifies the carbon market regimes constantly being pushed upon our communities by environmental and climate organizations. Under the rubric of carbon pricing, these cap-and-trade, carbon offsets, carbon tax systems are false solutions that do not cut emissions at source, create toxic hot spots, and result in land grabs and violations of human rights and rights of Indigenous peoples in the forest regions of developing countries. People have a right to know the truth about these national and global initiatives that are nothing but the financialization of nature, the privatization of Mother Earth.” -- Tom Goldtooth, Executive Director of the Indigenous Environmental Network

Is Greenhouse Warming a Good Pretext for Selling Driverless Cars?

By Stan Cox - Resilience, November 6, 2017

The automakers and IT giants are predicting that autonomous vehicles (AVs or “driverless cars”) will play a big role in reducing America’s currently extravagant emissions of greenhouse gases. In this claim (as in the assertion that flying cars will be more energy efficient than helicopters), climate mitigation is serving not as a goal but as a selling point for a lucrative new technology that society doesn’t need.

Most of the academic discussion of autonomous vehicles assumes the gradual introduction of both personal and shared electric AVs into the market. During that lengthy transition, AVs presumably will ply the streets and highways alongside human-driven electric and internal-combustion vehicles. How this is going to take us toward deep reductions in greenhouse emissions is not clear; the expectation appears to be that market forces and government incentives will somehow push the system toward fully autonomous, electrified transportation powered exclusively by renewable sources.

But the 100-percent renewable dream is a mirage, and AV cars will not bring it to life. That’s not due to any shortcomings of AVs; on the contrary, the technology’s failure to resolve the climate problem will be a result of the many attractive features that a successful AV-based system would offer—all of which will have the effect of increasing greenhouse emissions.

In a commentary on autonomous vehicles, Shelie Miller and Brent Heard of the University of Michigan wrote, “From an environmental point of view, the intrinsic technical attributes of AVs appear to be largely favorable.” However, they continued, it is “travel behavior patterns” that may have the greater influence, and that influence will be more negative.

The logic is simple: a better riding experience will encourage more riding. According to AV developers, the new vehicles will elevate the experience by offering more efficient operation and lower operating expense; improving safety; reducing driver stress and fewer road-rage incidents; freeing up hands, eyes, and attention for more useful tasks or more pleasant activities; reducing traffic congestion; putting an end to parking hassles; and offering greater mobility for young people, the elderly, and the disabled.

All of those benefits are already provided by public transportation. But most Americans’ goal is to be able to travel seamlessly door to door, and to do so without having to share space with  people they don’t know. Those desires, often sharpened by class bias, are a chief reason that most people who can afford to buy and operate a car (or can pay to be driven in a car) elect to stay off the train, bus, or subway.

Personal AVs offer to eliminate both the inconvenience of public transit and the hassles of driving, creating a system that appears at first glance to be the best of both worlds. As a result, incentives to travel even more miles per day will be intense. (Conversely, if Murphy’s Law remains in force and AVs don’t manage to deliver many of the promised personal benefits, miles traveled will not increase as much.)

Until AVs go into large-scale production, all projections of how America’s transportation systems will evolve are highly speculative. Nevertheless, a number of studies have attempted to model that evolution, their assumptions being based on what we know about how humans use transportation today.

The models show that under most scenarios, personal AVs will tend to increase the total vehicle miles traveled. When commuting time becomes less of a burden, people will be less inclined to live close to their workplaces. Suburban sprawl and attendant commuting distances are expected to increase. Parents will be able to send children off to school in their own car instead of having to drive a carpool or ask the kids to walk or ride the school bus. Commuters arriving at work be able to send their vehicles, empty, back out to the suburbs for cheaper or free parking, or to be plugged in. Cars could even be sent on solo errands, whether necessary or frivolous—maybe even to pick up a lunch box forgotten in one’s morning rush out the door.

Personal AVs would also make long-distance travel more appealing. One article speculates about “the use of AVs as mobile dwellings or luxury overnight sleeping compartments in lieu of higher density long-distance modes of travel.” In an AV world, use of all types of non-car public transportation is certain to decrease, and some fear that with reduced ridership, transit systems will go into a downward spiral—a disaster for those who can’t afford to buy or operate personal vehicles or ride-sharing services. Whether it’s in big cities or in regions with widely dispersed, smaller cities and limited public transportation (think Iowa or central Pennsylvania), per capita annual miles traveled will increase significantly once AVs are widely adopted.

The self-driving feature also comes at a high cost in energy efficiency. According to Bloomberg, the control systems for AVs “consume two to four kilowatts of electricity — the equivalent of having 50 to 100 laptops continuously running in the trunk.”

(The argument has been made that an increase in travel miles won’t matter if cars are powered by renewable electricity. But it will matter very much. Through much of the coming decades-long struggle to eliminate all fossil-fueled power generation, large portions of the national power supply will remain dirty. Meanwhile, every additional kilowatt-hour of wind or solar generation that goes to power a growing fleet of electric vehicles will be unavailable for traditional uses of electricity like lighting homes, refrigerating food, and reading online articles about self-driving cars. That will push even farther into the future the day when fossil-fueled electricity is eliminated. If we want ever to see that happy day, we will have to structure society in ways that will consume much less electricity, not more.)

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