Sacred Headwaters #44: Carbon Colonialism Pt 3 - Carbon Markets
Carbon offsetting is becoming increasingly popular and COP26 took steps to accelerate this. But what impact do these markets have on the global north/south divide?
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Issue #44: Carbon Colonialism Pt 3 - Carbon Markets
This is the third issue of four on “carbon colonialism.” In this series, we’re looking at the unequal distribution of culpability for climate change, both historically and in the present. We’re also looking at how the climate crisis is being exploited to develop new forms of colonial relationships between the north and south.
Issue #42: Carbon Colonialism Pt 1 - Historical Emissions (Nov 29th, 2021)
Issue #43: Carbon Colonialism Pt 2 - Carbon Inequality (Dec 13th, 2021)
Issue #44: Carbon Colonialism Pt 3 - Carbon Markets (Jan 9th, 2022)
Issue #45: Carbon Colonialism Pt 4 - Carbon Outsourcing (Jan 23rd, 2022)
Carbon offsetting has been part of the international climate regime for a long time – I was surprised to learn, while researching this issue, that the first offset was exchanged in 1989 between a US electric utility and a forestry project in Guatemala. An international framework, the Clean Development Mechanism (CDM), for offset exchange was created by the Kyoto Protocol (something those of us from the US often forget about) and has been used extensively; a voluntary market developed amongst consumers and corporations over the same period. In 2007, at COP13, the UNFCC added a new mechanism called REDD specifically focused on stemming deforestation in the global south through the sale of carbon credits.
There’s a lot to say about carbon offsets and other similar approaches to climate mitigation and I expect to write another issue on this in the future; today, I’m going to focus specifically on the way that carbon markets play out across the north/south divide.
It helps to think about the official rationale behind carbon offsets: at their core, they are a financial instrument that has been created to allow markets to practice a kind of arbitrage – buying something cheap in one place and selling it somewhere else where it’s more expensive. Emissions reduction in the global south is cheaper than in the north. By converting emissions reduction itself into a tradable financial instrument, the idea goes, you can leverage markets to optimize the cost efficiency of emissions reduction. In concrete terms, the premise is that, given the standard assumed constraints for climate policy in the north (“nothing can fundamentally change”), the cost of eliminating one ton of carbon emissions is quite high, while in the south, through the REDD+ mechanism, for example, it’s just $11 (+$1.10 platform fees). Having an offset exchange – a carbon market – allows international capital to find the most efficient emissions reductions first, thus accelerating the global trajectory towards net zero.
It all makes the kind of intuitive common sense we’re indoctrinated with from “Econ 101” – but becomes problematic when you look at what has happened with virtually every other new market that has been created to allow capital flows to “efficiently” distribute resources. I’ve written about the financialization of housing here in the past, and I suspect housing is front of mind for many in North America these days, but there’s no shortage of other examples. The north-south directional flow of carbon markets (which is openly by design!) and the land-based nature of virtually all offset projects compound the issue – even projects that aren’t focused on land use change such as renewable energy plants still require land. Building these markets has created new ways for northern capital interests to, quite literally, colonize land in the global south and generate profit from it. Is it possible that emissions are being reduced by some or even many of these projects? Sure, although it’s worth mentioning that without a global rising price on carbon or enforceable emissions caps, even the best of these market mechanisms will struggle to actually reduce emissions. But at what cost? Is this model just further entrenching inequality and creating new ways for the wealthy to profit from the land and lives of the global south? Any scheme that reproduces colonial relationships between the north and south can hardly be considered a just approach to climate mitigation.
These questions are important both because of the growing consumer and corporate popularity of offsets (“demand is booming” according to Bloomberg) and because one of the most significant outcomes (arguably, the only outcome) from COP26 was a new set of rules for carbon markets. Everyone’s favourite banker, Mark Carney, the creator of the Glasgow Financial Alliance for Net Zero (GFANZ), has excitedly stated he believes these rules could grow the voluntary carbon market to $100 billion a year (in addition to the $270 billion governmental carbon market).
$100 billion a year, coincidentally enough, is also the amount that northern countries promised the south in 2015 to fund mitigation and adaptation and have yet to deliver.
In this issue, we’re going to read about how carbon markets are creating new ways for northern capital to appropriate and exploit land in the global south and about some of the many ways offset projects are impacting subaltern communities on the ground.
Avoiding 'carbon colonialism': Developing nations can't pay the price for pollution (5 minutes)
Laura J. Martin, Ph.D.
This op-ed makes the case that international carbon markets are fundamentally unequal, facilitate human rights violations in the global south, and are creating a new form of environmental racism. It also introduces some basic statistics about the offset market – forestry and land use offsets represent 56.4% of all voluntary offset transactions – and situates offsetting within the broader climate discourse it fits within, “net zero” and the ever-spreading pledges to that effect. We’ll get into more detail below, but this article is a great summary of the situation and alludes to a number of specific situations where offset projects displaced local communities and locked them out of their livelihoods all for the ostensible purpose of allowing the global north to continue “business as usual.” Martin calls on readers – and the US government – to view international offsetting through the same lens that they are viewing environmental justice within the US and to avoid allowing climate mitigation to become a “justification for social oppression.”
Martin draws a clear distinction between “local” offset projects and those pursued in the south by the north, and while carbon markets were explicitly created to take advantage of cheaper emissions reductions in the south, there is a growing offset industry within northern countries that may be better, though of course, many northern countries still allow capital to expropriate land from Indigenous peoples at home.
How a Green New Deal could exploit developing countries (5 minutes)
Olúfẹ́mi O. Táíwò
To Táíwò, climate colonialism is
the deepening or expansion of foreign domination through climate initiatives that exploit poorer nations' resources or otherwise compromises their sovereignty. Others focus more on how formerly colonized countries are paying the price for a crisis caused disproportionately by the emissions from more industrialized nations—their current and past colonizers.
In this piece, he explains the concept and identifies the risk that even progressively-minded efforts to mitigate the climate crisis at home may reinforce or create new forms of injustice abroad. Calls for a Green New Deal from the left in a number of countries typically include massive infrastructure campaigns and Táíwò’s reminder here is critical: these kind of policies could just as easily (probably more easily) reproduce northern imperialism as remedy it, and a real commitment to climate justice means maintaining a truly internationalist perspective. Táíwò frames offsetting in particular as a primary mechanism by which climate policy is reproducing colonialism not just by enclosing land in the south, but specifically by enclosing land that is occupied by some of the most politically disempowered people in the world. As he writes,
This can put them in competition for the land that provides their basic needs with powerful private interests from the world’s most powerful countries.
Carbon markets are pitting people’s efforts to survive against global capital.
Xapuri Declaration (5 minutes)
This declaration was produced by a coalition of Indigenous peoples, local communities, rubber tappers, and others in Xapuri, Brazil, in opposition to the Brazilian government’s efforts to commodify their land and turn it over to northern companies for international offset schemes. It’s very short and to the point and gives a clear perspective on what many of those directly impacted think of the financial instruments the north is building to “address climate change:”
We refuse to use the term carbon credits, understanding that they are actually pollution credits, which aggravate rather than solve the problem
The authors are also quite clear on who is gaining control over their communities through these markets – emissions reductions or not.
We reject the ongoing initiatives materialized in policies that aim to convey our territories to private capital groups
REDD: A Collection of Conflicts, Contradictions, and Lies (30+ minutes)
World Rainforest Movement
Read the intro and the end and as many of the case studies as you have time for.
REDD stands for “reducing emissions from deforestation and forest degradation” and it is a mechanism for creating financial instruments from the act of not allowing deforestation. This mechanism was rejected when it was first proposed at Kyoto in 1997 but revived at the UNFCC Conference of the Parties in Bali in 2007. At the same time, the World Bank created a Forest Carbon Partnership Facility and started aggressively promoting forest-based carbon initiatives and the market took off.
This report looks at 24 different forest carbon projects in the global south and assesses the impact on – and degree of consent of – local peoples, contrasting that with the way the projects are promoted by consulting and marketing firms in the north. These case studies present a grim picture of an industry of northern forest carbon “salespeople” promoting “socially responsible” carbon offset projects that actually dispossess and even sometimes criminalize local communities. This shouldn’t really come as a surprise: while the rationale may be based, in principle, on environmentalism, what’s actually happening is no different from what happens when northern resource companies move in to extract minerals or oil and gas or any other product of the land. I’ve visited villages in Peru set to be flooded by a dam being built by a transnational conglomerate where the people were tricked into signing away their land rights, just like the people in Brazil described in this report. They were given gift baskets and asked to sign to certify their receipt but were actually signing away their title. Can you imagine if you lost your home because you signed for a gift basket? Or worse – your ancestral territory that your people had lived in for all of history?
The tactics of colonialism remain remarkably unchanged over five centuries.
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