Cashing in on climate change
Back in 1999, long before the Kyoto Protocol took effect, the World Bank launched a pioneering new carbon finance system: the Prototype Carbon Fund. The fund was intended as a rough draft, allowing policy makers and climate planners to hash out the details of a carbon market before unleashing it upon the world; along the way, Bank officials promised, the fund would be used to spur the development of renewable energies.
Unfortunately, according to a new report from the Institute for Policy Studies, the Bank’s first foray into carbon finance was inspired less by the need to check climate change than by the possibility of making a quick buck. Leaked documents show that as early as 1997, the Bank was hatching plans to skim $100 million a year off the top of the global carbon market; launching the Prototype Carbon Fund was merely the first step towards carbon-market domination, allowing the Bank to position itself as the world’s premier carbon broker.
Eight years on, the Bank has essentially written the rule book for global carbon finance. It runs 11 carbon funds with a combined portfolio worth more than $2 billion, takes a 13 percent commission on its offsetting activities, and has raked in about $260 million for its work as a carbon trustee. It’s also abjectly failed to deliver the green investments it pledged: The vast majority of its funds are channeled into subsidies for oil, gas, and coal companies, while barely 10 percent goes to renewable energy projects.
Part of the problem, say the authors of the IPS study, is that the Bank has sought to play both sides of the climate crisis. While acting as the world’s carbon broker, the Bank has continued to spend billions funding filthy fossil-fuel projects in the developing world, helping to create the very same mess it’s supposedly trying to clean up.
Worse, the Bank has allowed those same developing-world polluters to earn lucrative carbon credits by reducing--or even just not actively increasing--their emissions. That’s stifled the growth of green technologies, and helped make fossil fuel projects more profitable than ever; and the Bank, of course, has pocketed a tidy chunk of the change. The IPS researchers say that’s climate profiteering, plain and simple; either way, with the US likely to launch its own cap-and-trade program in the not too distant future, it’s a timely reminder of how easily carbon-trading systems can be corrupted.
TrackBack URL for this entry: