At the World Bank’s Climate Summit, Financiers Trade Carbon While the World Burns

At “Innovate4Climate,” the people destroying the planet gather to congratulate themselves on their climate efforts.

Kate AronoffJuly 30, 2018

Optimistic panels at the Innovate4Climate summit in Frankfurt, Germany, had “a real rearranging-deck-chairs-on-the-Titanic vibe.” (Photo by MA X Thabiso Edkins/Connect4Climate / Flickr)

FRANK­FURT, GER­MANY — In a sprawl­ing con­fer­ence cen­ter in the finan­cial heart of con­ti­nen­tal Europe, 11 sharply dressed speak­ers squeeze onto a tiny stage. For three days in May, the cen­ter plays host to Innovate4Climate, a sum­mit on cli­mate finance and car­bon mar­kets host­ed by the World Bank and the envi­ron­ment min­istries of Spain and Ger­many. Pro­ject­ed behind the pan­elists in a dig­i­tal scrawl that would look more at home at an extreme sports event are the words Talanoa Sto­ries,” over a pic­turesque beach scene.

Companies can buy and sell Certified Emissions Reduction credits to allegedly balance out emissions. The problem? Most of those projects are Grade-A bullshit.

Talanoa is a tra­di­tion­al Fijian word for a mode of inclu­sive dia­logue toward the com­mon good. Since Fiji host­ed the 2017 U.N. cli­mate talks last year, it’s also been used to describe the process of assess­ing pro­pos­als for imple­ment­ing and improv­ing the Paris Agreement.

The pan­el had a real rear­rang­ing-deck-chairs-on-the-Titan­ic vibe: In the spir­it of talanoa, par­tic­i­pants were asked to share moments that gave them hope. Jonathan Shop­ley, man­ag­ing direc­tor of Nat­ur­al Cap­i­tal Part­ners and a founder of the Inter­na­tion­al Car­bon Reduc­tion and Off­set Alliance, recalled a con­ver­sa­tion with an air­line exec­u­tive who, alleged­ly, need­ed just a lit­tle more time” and some incen­tive” to scale down his company’s con­sid­er­able car­bon emis­sions — to Shop­ley, a sign that busi­ness­es are eager to help. That con­ver­sa­tion was five years ago. Air­line emis­sions have climbed steadi­ly since.

Air­lines — with annu­al car­bon emis­sions rough­ly on par with Ger­many — aren’t direct­ly account­able to the Paris Agree­ment, because attribut­ing air trav­el emis­sions to any sin­gle coun­try would be a logis­ti­cal night­mare. They enjoy an aston­ish­ing amount of lee­way to decide how to rein in their pol­lu­tion. Start­ing in 2021, that will hap­pen main­ly using car­bon off­set markets.

Under the aus­pices of the UN’s Clean Devel­op­ment Mech­a­nism (CDM), com­pa­nies can buy and sell Cer­ti­fied Emis­sions Reduc­tion (CER) cred­its to alleged­ly bal­ance out emis­sions. For instance, Ger­many could pol­lute at home while buy­ing CERs that fund sus­tain­able forestry in the Glob­al South.

The prob­lem? Most of those projects are Grade‑A bull­shit. By 2009, an esti­mat­ed 59 per­cent of CERs pur­chased were for projects relat­ed to HFC-23, a green­house gas made in the pro­duc­tion of sev­er­al house­hold appliances.

Once refrig­er­a­tor man­u­fac­tur­ers real­ized they could earn cred­its by sim­ply destroy­ing the gas­es they pro­duced, they start­ed pro­duc­ing gas­es just to destroy them, claim the cred­its and sell them at a prof­it. This didn’t exact­ly reduce emissions.

Even the World Bank, which helped devel­op the CDM, called the off­set mar­ket pon­der­ous, cost­ly and inef­fec­tive.” Yet, cred­its have a bright future with air­lines — an oppor­tu­ni­ty off­set sales­peo­ple aren’t about to waste.

At Innovate4Climate, a har­ried pitch ses­sion to poten­tial investors fea­tured a vis­i­bly ner­vous emis­sary of some­thing called Cli­mate­coin, which bills its prod­uct as the First Car­bon Backed Cryp­toas­set,” promis­ing to democ­ra­tize car­bon mar­kets.” Investors, he tried to explain, can now pur­chase Ethereum (a type of cryp­tocur­ren­cy) that’s tied to CER projects — through their new blockchain-based platform.

This nigh-incom­pre­hen­si­ble talk feels like a fever dream, a micro­cosm of the per­va­sive fan­ta­sy through­out cli­mate pol­i­cy­mak­ing that free mar­kets, ren­dered effi­cient via a few price sig­nals, will res­cue human­i­ty from cat­a­stro­phe; that those most respon­si­ble for the cri­sis can sim­ply out­source the prob­lem; that pol­luters can be coaxed into reduc­ing emis­sions with­out robust regulation.

I looked back at the Innovate4Climate web­site while writ­ing this, and the land­ing page is tri­umphant: Anoth­er remark­able success!”

Kate Aronoff is a Brook­lyn-based jour­nal­ist cov­er­ing cli­mate and U.S. pol­i­tics, and a con­tribut­ing writer at The Inter­cept. Fol­low her on Twit­ter @katearonoff.
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