Call for a ‘Seattle’ approach to Copenhagen climate talks, Africans demand reparations

14 September 2009 by Patrick Bond


September 5, 2009 – Durban — Here’s a fairly simple choice: the global North would pay the hard-hit global South to deal with the climate crisis, either through the complicated, corrupt, controversial ``Clean Development Mechanism’ (CDM), whose projects have plenty of damaging sideeffects to communities, or instead pay through other mechanisms that must provide financing quickly, transparently and decisively to achieve genuine income compensation plus renewable energy to the masses.

The Copenhagen climate summit in December is all about the former choice, because the power bloc in Europe and the US have put carbon trading Market activities
trading
Buying and selling of financial instruments such as shares, futures, derivatives, options, and warrants conducted in the hope of making a short-term profit.
at the core of their emissions reduction strategy, while the two largest emitters of carbon in the Third World, China and India, are the main beneficiaries of CDM financing.

What that means is that problems caused when Al Gore’s US delegation brought pro-corporate compromises to Kyoto in 1997 – promising a US sign-on to Kyoto (hah, what a lie) in exchange for carbon trading - are going to now amplify, and haunt us for a very long time, unless serious reforms are achieved in Copenhagen.

They won’t be, and nor will any substantive agreement emerge, hinted the new UN Development Programme director and New Zealand’s neoliberal former prime minister Helen Clark this week: ``The success of the Copenhagen summit on climate change in December will not depend on a final international deal being sealed there.’’

In other words, prepare for a stalemate by a coalition of selfish, fossil-fuel addicted powers. Terribly weak targets may get a mention (or even no mention, as last time at Bali), but market mechanisms will be invoked as the ``solution’’ so as to appease polluting capitalists and the governments under their thumb, especially US President Barack Obama’s.

In contrast, there are attractive, simple mechanisms for financing Africa’s survival, including the militant ``ecological debt’’ (or ``climate reparations’’) demands now being made by environmental leaders of the African Union (AU), as well as Jubilee Africa’s request to just remove the damn boot from Africa’s financial neck by canceling ongoing debt repayments.

On that score, in 2009 the lowest-income African countries are suffering a 50% increase in debt repayments (as a percentage of export earnings), according to the International Monetary Fund IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
(IMF).

As I noted four years ago, that means the Make Poverty History NGO-rockstar campaign was a farce. The only debt written off wasn’t possible to repay anyway, so for low-income Africa, ``debt relief’’ was just an accounting gimmick and the G8 G8 Group composed of the most powerful countries of the planet: Canada, France, Germany, Italy, Japan, the UK and the USA, with Russia a full member since June 2002. Their heads of state meet annually, usually in June or July. ’s real Gleneagles debt strategy was to squeeze Africa even tighter, as IMF data now shows.

African Union role

But, you may well ask, should anyone take anything said by the AU leadership seriously? The AU typically serves, as Zimbabwe’s new finance minister Tendai Biti once put it, as the continent’s ``trade union of dictators’’.

Heading the AU climate team is Ethiopian strongman Meles Zenawi, who also chairs South Africa’s subimperialist New Partnership for Africa’s Development and thus gets invited to G20 G20 The Group of Twenty (G20 or G-20) is a group made up of nineteen countries and the European Union whose ministers, central-bank directors and heads of state meet regularly. It was created in 1999 after the series of financial crises in the 1990s. Its aim is to encourage international consultation on the principle of broadening dialogue in keeping with the growing economic importance of a certain number of countries. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, USA, UK and the European Union (represented by the presidents of the Council and of the European Central Bank). gatherings along with Pretoria (better him than AU chair Moammar Gaddafi, reckon the others).

Sometimes seen merely as a US puppet – thanks to the disastrous, Washington-sponsored 2007 invasion of neighbouring Somalia – Zenawi is rather more complex. He was once a self-described Marxist but is now a brutal tyrant whose troops have killed scores of students and other democrats, and who has just imposed a ban on international funding of local civil society aimed to intimidate critics.

Quite ridiculous, isn’t it, for Zenawi to lead the charge, reportedly demanding a minimum of US$65 billion – and up to $200 billion – annually from the North by 2020?

Well, no, not considering how much Africa will be devastated. Even Zenawi’s voice, and role in Copenhagen are potentially crucial in the struggle ahead.

What a struggle it is. The most shocking probable outcome of climate change is that 90% of the African peasantry will be out of business by 2100 due to drought, floods, extreme weather events, disease and political instability, according to UN experts.

The Climate Change Vulnerability Index, calculated in 2009 ``from dozens of variables measuring the capacity of a country to cope with the consequences of global warming’’, listed 22 African countries out of 28 across the world at ``extreme risk’’, whereas the United States is near the bottom of the world rankings of countries at risk, even though it is the leading per capita contributor to climate change.

There is no question that those most responsible should pay reparations, now that we are aware of the damage being done by rising greenhouse gas emissions, and by the ongoing stubborn refusal by the rich-country government – especially Obama’s - to cut back.

The amounts can be debated, for of course $65 billion/year for Africa is way too low, given how much devastation to individuals and communities is already underway, how many economies will falter, and how many incalculably valuable species will be lost.

But in addition to AU leaders, the world is awakening. After several years of hard work by World Council of Churches (WCC) members and staff, on September 2 the WCC’s central committee adopted a formal statement on the North’s ``deep moral obligation to promote ecological justice by addressing our debts to peoples most affected by ecological destruction and to the earth itself.’’

The WCC slams ``the agro-industrial-economic complex and the culture of the North, characterized by the consumerist lifestyle and the view of development as commensurate with exploitation of the earth’s so-called natural resources’’, and cites the eco-debt definition pioneered by Accion Ecologica of Ecuador: ``historical and current resource-plundering, environmental degradation and the dumping of greenhouse gases and toxic wastes.’’

Like the USA’s ``Superfund’’ legislation or any other damages paid by corporations for messes made – such as Thor Chemicals’ notorious mercury spillage a few dozen kilometres from my Durban home, now leaking into the city’s bulk water supply at the Inanda Dam – the point is to get a general estimate of clean-up costs and a rough estimate of damages done.

As compensation, flows of grant funding are required – hopefully via an accountable, fair, transparent system such as a basic income grant for all residents of Africa (a Namibian pilot is showing excellent results) – instead of the kinds of corrupting carbon trade financing that dictators or big corporations currently grab hold of and redirect to adverse ends.

Carbon market

What is a carbon market regime and why is it counterproductive? This is the heart of the debate about the merits of a Copenhagen deal.

Carbon trading allows corporations and governments generating greenhouse gases to seemingly reduce their net emissions. They can do this, thanks to the Kyoto Protocol, by trading for others’ reductions (e.g. CDM projects in the Third World) or emissions rights (e.g. Eastern Europe’s ``hot air’’ that followed the 1990s economic collapse).

Why do they do it? The pro-trading rationale is that once property rights are granted to polluters for their emissions, a ``cap’’ can be put on a country’s or the world’s total emissions (and then progressively lowered if there is political will). So as to minimise adverse economic impact, corporations can stay within the cap even by emitting way above it, by buying others’ rights to pollute.

But the carbon market isn’t working, for several reasons:

- the idea of inventing a property right to pollute is effectively the privatisation of the air;
- the corporations most responsible for pollution and the World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

– which is most responsible for fossil-fuel financing – are behind the market, and can be expected to engage in systemic corruption to attract money into the market even if this prevents genuine emissions reductions;
- many of the offsetting projects – such as monocultural timber plantations, forest ``protection’’ and landfill methane-electricity projects – have devastating impacts on local communities and ecologies;
- the price is haywire, having crashed by half in a short period in April 2006 and by two-thirds in 2008;
- there is a serious potential for carbon markets to become an out-of-control, multi-trillion dollar speculative bubble Speculative bubble An economic, financial or speculative bubble is formed when the level of trading-prices on a market (financial assets market, currency-exchange market, property market, raw materials market, etc.) settles well above the intrinsic (or fundamental) financial value of the goods or assets being exchanged. In such a situation, prices diverge from the usual economic valuation under the influence of buyers’ beliefs. , similar to exotic financial instruments Financial instruments Financial instruments include financial securities and financial contracts. associated with Enron’s 2002 collapse (indeed, many Enron employees populate the carbon markets);
- as a ``false solution’’ to climate change, carbon trading encourages merely small, incremental shifts, and thus distracts us from a wide range of radical changes we need to make in materials extraction, production, distribution, consumption and disposal; and
- the idea of market solutions to market failure is an ideology that rarely makes sense, and especially not following the world’s worst-ever financial market Financial market The market for long-term capital. It comprises a primary market, where new issues are sold, and a secondary market, where existing securities are traded. Aside from the regulated markets, there are over-the-counter markets which are not required to meet minimum conditions. failure.

Recall that scientists insist an 80% cut in emissions will be necessary within four decades at most, with the major cuts before 2020. To achieve this, carbon markets won’t work, as the leading US climate scientist, James Hansen, remarked in opposition to Barack Obama’s cap and trade scheme.

Obama’s legislation – the Waxman-Markey bill that passed the US House of Representaives in June 2009 – is so profoundly flawed it should be scrapped. Some excellent movements have sprung up to try to prevent US carbon trading and the destruction of Environmental Protection Agency powers to regulate carbon pollution, on which Waxman-Markey is especially wicked. (Please help by joining scores of groups disgusted with Obama’s legislation, at http://www.biologicaldiversity.org/action/toolbox/ACESA/sign-on_letter.html and http://www.climatesos.org – and do give a miss to pro-``Hopenhagen’’ campaigners like Avaaz, the World Wildlife Federation, the ``Climate Action Network’’ and other deal-doers who either haven’t thought through the issues properly or who wallow in conflicts of interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. as carbon-traders themselves.)

In sum, the emissions trade is a bogus ``false solution’’. Very different forms of climate finance are required at the Copenhagen summit in December, including the North’s payment of ecological debt. But Zenawi and others from Africa – especially civil society – will have to work much harder to put climate compensation on the agenda (and to ensure that governments corrupted by the fossil fuel industry and other transnational corporations, as well as local elites, do not become the vehicle for distributing the compensation).

For a `Seattle’ at Copenhagen

While carbon trading is at the heart of Copenhagen negotiations, any deal done will be a step backwards. The Durban Group for Climate Justice – founded in 2004 in South Africa - is the main civil society network explicitly fighting carbon trading; a superb analysis by Larry Lohmann is available from the Dag Hammarskjold Foundation at http://www.dhf.uu.se/pdffiler/DD2006_48_carbon_trading/carbon_trading_web_HQ.pdf.

One of our other gurus, University of KwaZulu-Natal honorary professor Dennis Brutus, puts the challenge ahead quite frankly: ``My own view is that a corrupt deal is being concocted in Copenhagen with the active collaboration of NGOs who have been bought off by the corporations, especially oil and transport. They may even be well-intentioned but they are barking up the wrong tree.’’

Instead of a bad deal, Brutus recommends that we all ``Seattle’’ Copenhagen, i.e. the AU insiders work with massed protest outside to prevent the North from doing a deal in their interests, against Africa’s and the planet’s. A decade ago, that formula stopped the World Trade Organisation WTO
World Trade Organisation
The WTO, founded on 1st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.

’s Millennial Round from succeeding in Seattle, and in 2003 the feat was repeated in Cancun.

``We’re outta here’’, Zenawi may well say in Copenhagen, for on September 3, he issued a strong threat from Addis Ababa: ``If need be we are prepared to walk out of any negotiations that threatens to be another rape of our continent.’’

To ``Seattle’’ Copenhagen would entail civil society protesting outside and African governments working for Africans’ interests inside, to halt a dirty deal that makes matters worse. Even with less than 100 days to go, Brutus insists it’s feasible, and would then allow us to move on to the real emissions reduction and alternative energy and production systems the world desperately needs.

Patrick Bond Bond A bond is a stake in a debt issued by a company or governmental body. The holder of the bond, the creditor, is entitled to interest and reimbursement of the principal. If the company is listed, the holder can also sell the bond on a stock-exchange. , director of the Centre for Civil Society in Durban, is co-editor of the UKZN Press book Climate Change, Carbon Trading and Civil Society: Negative Returns on South African Investments. This article was originally a ZNet commentary.

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Patrick Bond

is professor at the University of the Western Cape School of Government in Cape Town, and co-editor of BRICS and Resistance in Africa (published by Zed Books, 2019).

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