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Carbon Capture, Offsets and Bonds: Will Any of Them Work?


Governments that believe the industrial economy depends on the continuing use of fossil fuels want to maintain business-as-usual. Consequently the federal and provincial governments subsidize technology that pumps C02 into oil fields to enhance private oil recovery, and then justify this because it involves some carbon capture and storage (CCS). CCS is naively treated as a tech-fix for reducing greenhouse gases (GHGs). But CCS comes from the same paradigm that got us into the climate crisis, and, anyway, it's more cost-effective and creates more local employment to go directly to renewables.

The Suzuki Foundation has already warned that CCS needs to be linked to strong legislation to limit and reduce GHGs, yet the Wall and Harper governments have opposed this regulatory strategy in all national and international negotiations. The Pembina institute says that for CCS to help reduce GHGs it must be part of a package of policies; without capping emissions and pricing carbon, both organizations argue, CCS won't work. But Wall and Harper clearly don't want the package. Pricing carbon remains a political football, as shown by the quick demise of Liberal Leader Stephane Dion. Premier Wall calls carbon pricing another tax unless it is "poured back into finding answers", which for his government mostly means CCS, though it is encouraging that Wall seems to be realizing that renewables are on the table. In contrast to cost-effective ways of reducing GHGs, CCS sinks taxpayer's money into underground caverns along with C02.

CARBON OFFSETS Problems with carbon-reducing strategies also persist at the international level. The Kyoto Accord didn't create universal, enforceable reductions of GHGs. However, since Kyoto, with Al Gore's support, a $100 billion carbon trading market has developed, which involves companies that meet emission targets selling their "offsets" to companies that don't want to meet theirs. However, according to Carbon Trade Watch, by September 2009 three-quarters of the offset credits being traded had nothing to do with absolute reductions. Further, carbon offsets can easily turn into another stock market bubble, not unlike what happened when mortgages got sold and resold in derivative markets, so that traders ultimately didn't know what they were selling. The financial crash and recession followed.

The 2009 Copenhagen meeting ended with only voluntary targets that don't add up to the required reductions. There was a plan proposed to curb deforestation, which is responsible for 20% of the world GHG emissions. But this plan assumed that existing forests have no intrinsic value, and only get value if they are depleted. This leads to the silly, Alice-In-Wonderland, notion that people should be able to trade and be paid for "avoided emissions" rather than having to make real reductions in actual emissions. In other words offsets don't necessarily curb emissions. Indigenous peoples who live sustainably within the world's forests obviously weren't consulted about this plan.

CARBON BONDS We desperately need innovations that are not lucrative ploys to procrastinate reducing carbon. Ecuador's Yasuni rainforest sits atop 850 million barrels of oil. Already suffering the loss of much of its rainforest through resource extraction, Ecuador is looking for an alternative development path. It considered "selling" protection of the rainforest as a giant carbon offset, but rejected this because it would allow companies to maintain emissions elsewhere. Instead, it wants to partner with other countries that are willing to help preserve the rainforest as a huge global carbon sink while financing the shift to a sustainable economy.

The plan is to issue carbon bonds, like legally binding bonds, which would have to be repaid if Ecuador ever deviated from its agreement to protect the rainforest. Ecuador says it can get more money from these "non-emitted C02" certificates than if it allowed the oil to be extracted, which shows that preserving biodiversity can enhance social development more than trickle-down economic growth. The money will protect 40 conservation areas, which account for over one-third of the country's land base, and develop renewable energy and further the countries equalitarian social agenda. Ecuador even says it is willing to trade its foreign debt for such ecological investment. Germany and Spain have responded positively with some investment and technical aid, and discussions are beginning with France, Belgium, Sweden, Norway, the Netherlands and the US. So far only the UK has said "no!"

These bonds acknowledge that the whole world benefits from stopping the destruction of rainforests, and the same thing is true for the boreal forest, which means Canada has much to learn from Ecuador. When Yolanda Kakabadse, a member of Ecuador's Presidential Commission, was interviewed in the December 2009 New Internationalist, she said people buying these bonds "are getting a spiritual, intellectual, human benefit that is for the planet, not for Ecuador alone."

NEW ECONOMICS Sustainability requires a shift in how we understand economics. Old-world governments embrace unsustainable economic growth, believing there has to be a resource extracted at huge profit for there to be "development". Environmental and social costs are externalized on to today's taxpayers and future generations. CCS tries to keep the profitable fossil-fuel industry going by investing in costly and mostly unproven technology. Carbon offsets create a virtual carbon market which, while lucrative, can allow carbon emissions to continue to rise.

Ecuador's approach involves investing in the shift to an ecologically-sustainable economy. Land rights and the development of a renewable economy are placed at the centre of the new economics. Unlike corporate-driven development, the new economic development won't polarize the population into a few "haves" and a majority of "have-nots". Settlers and Indigenous people can begin to rebuild solidarity over a common commitment to preservation, reforestation and social equality. Rather than people being dislocated by resource-extraction "development", sustainable communities could begin to flourish.

It is possible to have a win-win situation, but not without changing the game plan. To get to a sustainable society the real value of preserving and restoring the biosphere has to become the bottom line and policies and market mechanisms must follow from this.