Carbon market greenwashing schemes worsen inequalities in the Global South – experts

by MMC
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By Joyce Chimbi

Somalia, Syria, DRC, Afghanistan, Yemen, Chad, South Sudan, Central African Republic, Nigeria and Ethiopia are the 10 countries most at risk of climate disaster in the world, although that they collectively contribute only 0.28% of global CO2 emissions. A climate-driven humanitarian crisis continues to spread in these and many other countries in the Global South, including Kenya, which declared the drought a national disaster in September 2021.

Flash floods, failed rainy seasons, severe food insecurity and climate-related health disasters like cholera are becoming common, and their debilitating effects are increasingly difficult to mitigate. In late 2022, for example, flooding caused significant damage to Nigeria’s agricultural lands, and projections show that 25 million Nigerians could face high levels of food insecurity by the end of 2023.

Against this backdrop, there are growing concerns that the carbon market has failed Africa and other developing countries in the South. Governments and businesses have created carbon market systems to combat their greenhouse gas emissions – a trading system in which carbon credits are sold and bought. A tradable carbon credit is equivalent to one tonne of carbon dioxide, or the quantity of different greenhouse gases reduced, sequestered or avoided.

Fadhel Kaboub, a Tunisian economist based in Nairobi, senior advisor at Power Shift Africa and president of the Global Institute for Sustainable Prosperity, tells IPS: “Carbon credits are pollution permits that allow polluters in the North to continue polluting while offering financial crumbs to the Global South. They are displacing vulnerable communities from their ancestral territory and pastoral lands. They enrich middlemen and speculators.

Kaboub, who is also an associate professor of economics at Denison University, says: “Thanks to the dominant market power of the companies that buy these pollution permits, they pass on the cost of carbon credits to their customers, many of whom are actually in trouble. the Global South, so we end up paying for it indirectly.

There are, however, experts, such as those leading the African Carbon Markets Initiative (ACMI), who are proactively promoting carbon market systems as a powerful tool for achieving carbon justice. And for developing countries to accelerate their socio-economic development by leveraging carbon sales while transitioning to a low-carbon economy.

ACMI seeks to further harness Africa’s potential in carbon markets by addressing challenges related to voluntary carbon market growth and laying the foundations for a thriving voluntary carbon market ecosystem in Africa. by 2030. Its priority areas are “not only to stimulate decarbonization activities, but also to stimulate economic development by supporting access to energy, intensifying the clean energy transition, protecting forests, improving the agriculture and creating new sources of income.

However, a recent report found that “ACMI’s growth target would allow large private companies to emit an additional 1.5 to 2.5 gigatons of CO2 equivalent per year by 2050, more than total fossil fuel emissions across Africa in 2021 and double the total annual CO2 emissions of all sub-regions. -Saharan Africa.

IPS contacted ACMI for comment, but this was not received at the time of publication.

This week, JSE Ventures launched South Africa’s first carbon market in Johannesburg Stock Exchange.

But carbon trading is not universally seen as a panacea to combat global warming.

Dr Shehnaaz Moosa, based in South Africa, director and head of the financial center of SouthSouthNorthwhich is a non-profit climate change organization, tells IPS that carbon markets have the potential to reinforce or alleviate historic structural inequalities between the global North and South.

“But given the abject failure of Clean Development Mechanism and the greenwashing of the voluntary carbon market, I am in the camp that thinks this will reinforce these deep inequalities. The carbon market allows big polluters to continue doing so without any overall reduction in their emissions. Local projects in the Global South that reduce carbon emissions are operated without any real benefit to communities.

Moosa, who also teaches chemical engineering at the University of Cape Town, says carbon trading needs to be seen for what it is: “a lot of hot air to legitimize the continued production of carbon dioxide emissions.” tight. We keep hearing the rhetoric that the way the market is structured it will be beneficial, which is northern rhetoric, and there is no way to structure exploitation that will make it fair, because it is exactly what carbon trading is: exploitation. »

Kaboub says, citing a recent survey that found the majority of carbon offset projects essentially boil down to greenwashing fraud – make false or misleading statements about the environmental benefits of a product or practice – which do nothing to reduce greenhouse gas emissions. Highlighting that this is one of the most worrying false solutions and distractions in climate finance.

Moosa and Kaboub point out that the cause of the disagreement is that carbon markets are attractive to big polluters because they allow industrialized countries and wealthy companies to maintain carbon-intensive and global warming practices while transferring their obligations to reduce emissions to Africa. Stressing that it is time to explore alternative climate finance mechanisms and fully implement the polluter pays principle – one of the key principles underpinning the European Union’s environmental policy.

This principle requires polluters to bear the costs of their pollution, including the cost of measures taken to prevent, control and remedy the pollution and the costs it imposes on society. Thus, polluters have an incentive to avoid environmental damage and are held responsible for the pollution they cause. It is also the polluter, and not the taxpayer, who bears the cost of sanitation.

Moosa is particularly focused on loss and damage: “while the arrangements for financing loss and damage are being developed, we do not need to be distracted by a concept that only works for big polluters. The energies of developing countries should be directed towards financing loss, damage and adaptation, because there can be no climate justice until climate injustice is corrected. The North still has a long way to go to address these injustices, and carbon markets are not a way to get there.

Kaboub agrees, calling for the need to avoid the carbon market because African countries that have not contributed to climate change and are in fact victims of climate-induced shocks are now forced to abandon their territorial sovereignty over vast areas. of land to foreign companies to issue pollution permits – adding that this is a new form of colonialism.

Report from the UN IPS Office

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