by Naomi Klein
Similarly, the EDF has teamed up with several large energy companies to open the Center for Sustainable Shale Development (CSSD)—and as many have pointed out, the very name of the center makes it clear that it will not be questioning whether “sustainable” extraction of fossil fuels from shale is possible in the age of climate change. The center has advanced a set of voluntary industry standards that its members claim will gradually make fracking safer. But as then–Demos senior policy analyst J. Mijin Cha pointed out, “The Center’s new standards . . . are not enforceable. If anything, they provide cover for oil and gas interests that want to derail the transition to a clean economy powered by renewable energy.”53
One of the center’s key funders is the Heinz Endowments, which as it turns out, was no disinterested party. A June 2013 investigation by the Public Accountability Initiative reported that, “The Heinz Endowments, has significant, undisclosed ties to the natural gas industry. . . . Heinz Endowments president Robert F. Vagt is currently a director at Kinder Morgan, a natural gas pipeline company, and owns more than $1.2 million in company stock. This is not disclosed on the Heinz Endowments website or the website of CSSD, where Vagt serves as a director. Kinder Morgan has cited increased regulation of fracking as a key business risk in recent corporate filings.” (After the controversy broke, Heinz Endowments appeared to move away from some of its earlier pro-gas positions and went through a significant staffing shakeup, including the resignation of Vagt as foundation president in early 2014.)54
The EDF has also received a $6 million grant from the foundation of New York’s billionaire ex-mayor Michael Bloomberg (who is strongly pro-fracking), specifically to develop and secure regulations intended to make fracking safe—once again, not to impartially assess whether such an outcome is even possible. And Bloomerg is no impartial observer in all this. The former mayor’s personal and philanthropic fortune—worth over $30 billion—is managed by investment firm Willett Advisors, which was established by Bloomberg and his associates. According to Bloomberg Businessweek, and confirmed by Bloomberg Philanthropies (which shares a building with the firm), Willett “invests in real assets focusing on oil and natural gas areas.” Michael Bloomberg did not respond to repeated requests for comment.55
The EDF has done more than help the fracking industry appear to be taking environmental concerns seriously. It also led research that has been used to counter claims that high methane leakage disqualifies fracked natural gas as a climate solution. The EDF has partnered with Shell, Chevron, and other top energy companies on one in a series of studies on methane leaks with the clear goal, as one EDF official put it, of helping “natural gas to be an accepted part of a strategy for improving energy security and moving to a clean energy future.” When the first study arrived in September 2013, published in Proceedings of the National Academy of Sciences, it made news by identifying fugitive methane leakage rates from gas extraction that were ten to twenty times lower than those in most other studies to date.56
But the study’s design contained serious limitations, the most glaring of which was allowing the gas companies to choose the wells they wanted inspected. Robert Howarth, the lead author of the breakthrough 2011 Cornell study on the same subject, pointed out that the EDF’s findings were “based only on evaluation of sites and times chosen by industry,” and that the paper “must be viewed as a best-case scenario,” rather than a reflection of how the industry functions as a whole. He added, “The gas industry can produce gas with relatively low emissions, but they very often do not do so. They do better when they know they are being carefully watched.” These concerns, however, were entirely upstaged by the priceless headlines inspired by the Environmental Defense Fund study: “Study: Leaks at Natural Gas Wells Less Than Previously Thought” (Time); “Study: Methane Leaks from Gas Drilling Not Huge” (Associated Press); “Fracking Methane Fears Overdone” (The Australian); and so on.57
The result of all this has been a great deal of public uncertainty. Is fracking safe after all? Is it about to become safe? Is it clean or dirty? Like the well-understood strategy of sowing doubts about the science of climate change, this confusion effectively undermines the momentum away from fossil fuels and toward renewable energy. As Josh Fox, the director of the Academy Award–nominated documentary on fracking, Gasland, puts it: “I think that what’s happening here is a squandering of the greatest political will that we’ve ever had towards getting off of fossil fuels.”58
Because while green groups battle over the research and voluntary codes, the gas companies are continuing to drill, leak, and pour billions of dollars into new infrastructure designed to last for many decades.
Trading in Pollution
When governments began negotiating the international climate treaty that would become the Kyoto Protocol, there was broad consensus about what the agreement needed to accomplish. The wealthy, industrialized countries responsible for the lion’s share of historical emissions would have to lead by capping their emissions at a fixed level and then systematically reducing them. The European Union and developing countries assumed that governments would do this by putting in place strong domestic measures to reduce emissions at home, for example by taxing carbon, and beginning a shift to renewable energy.
But when the Clinton administration came to the negotiations, it proposed an alternate route: create a system of international carbon trading modeled on the cap-and-trade system used to address acid rain (in the run-up to Kyoto, the EDF worked closely on the plan with Al Gore’s office).59 Rather than straightforwardly requiring all industrialized countries to lower their greenhouse gas emissions by a fixed amount, the scheme would issue pollution permits, which they could use, sell if they didn’t need them, or purchase so that they could pollute more. National programs would be set up so that companies could similarly trade these permits, with the country staying within an overall emissions cap. Meanwhile, projects that were employing practices that claimed to be keeping carbon out of the atmosphere—whether by planting trees that sequester carbon, or by producing low carbon energy, or by upgrading a dirty factory to lower its emissions—could qualify for carbon credits. These credits could be purchased by polluters and used to offset their own emissions.
The U.S. government was so enthusiastic about this approach that it made the inclusion of carbon trading a deal breaker in the Kyoto negotiations. This led to what France’s former environment minister Dominique Voynet described as “radically antagonistic” conflicts between the United States and Europe, which saw the creation of a global carbon market as tantamount to abandoning the climate crisis to “the law of the jungle.” Angela Merkel, then Germany’s environment minister, insisted, “The aim cannot be for industrialized countries to satisfy their obligations solely through emissions trading and profit.”60
It is one of the great ironies of environmental history that the United States—after winning this pitched battle at the negotiating table—would fail to ratify the Kyoto Protocol, and that the most important emissions market would become a reality in Europe, where it was opposed from the outset. The European Union’s Emissions Trading System (ETS) was launched in 2005 and would go on to become closely integrated with the United Nations’ Clean Development Mechanism (CDM), which was written into the Kyoto Protocol. At least initially, the markets seemed to take off. From 2005 through 2010, the World Bank estimates that the various carbon markets around the globe saw over $500 billion in trades (though some experts believe those estimates are inflated). Huge numbers of projects around the world, meanwhile, are generating carbon credits—the CDM alone had an estimated seven-thousand-plus registered projects in early 2014.61
But it didn’t take long for the flaws in the plan to show. Under the U.N. system, all kinds of dodgy industrial projects can generate lucrative credits. For instance, oil companies operating in the Niger Delta that practice “flaring”—setting fire to the natural gas released in the oil drilling process because capturing and using the potent greenhouse gas is more e
xpensive than burning it—have argued that they should be paid if they stop engaging in this enormously destructive practice. And indeed some are already registered to receive carbon credits under the U.N. system for no longer flaring—despite the fact that gas flaring has been illegal in Nigeria since 1984 (it’s a law filled with holes and is largely ignored).62 Even a highly polluting factory that installs a piece of equipment that keeps a greenhouse gas out of the atmosphere can qualify as “green development” under U.N. rules. And this, in turn, is used to justify more dirty emissions somewhere else.
The most embarrassing controversy for defenders of this model involves coolant factories in India and China that emit the highly potent greenhouse gas HFC-23 as a by-product. By installing relatively inexpensive equipment to destroy the gas (with a plasma torch, for example) rather than venting it into the air, these factories—most of which produce gases used for air-conditioning and refrigeration—have generated tens of millions of dollars in emission credits every year. The scheme is so lucrative, in fact, that it has triggered a series of perverse incentives: in some cases, companies can earn twice as much by destroying an unintentional by-product as they can from making their primary product, which is itself emissions intensive. In the most egregious instance of this, selling carbon credits constituted a jaw-dropping 93.4 percent of one Indian firm’s total revenues in 2012.63
According to one group that petitioned the U.N. to change its policies on HFC-23 projects, there is “overwhelming evidence that manufacturers are gaming” the system “by producing more potent greenhouse gases just so they can get paid to destroy them.”64 But it gets worse: the primary product made by these factories is a type of coolant that is so damaging to the ozone that it is being phased out under the Montreal Protocol on ozone depletion.
And this is not some marginal piece of the world emissions market—as of 2012, the U.N. system awarded these coolant manufacturers its largest share of emission credits, more than any genuinely clean energy projects.65 Since then, the U.N. has enacted some partial reforms, and the European Union has banned credits from these factories in its carbon market.
It should hardly be surprising that so many questionable offset projects have come to dominate the emissions market. The prospect of getting paid real money based on projections of how much of an invisible substance is kept out of the air tends to be something of a scam magnet. And the carbon market has attracted a truly impressive array of grifters and hustlers who scour biologically rich but economically poor nations like Papua New Guinea, Ecuador, and Congo, often preying on the isolation of Indigenous people whose forests can be classified as offsets. These carbon cowboys, as they have come to be called, arrive bearing aggressive contracts (often written in English, with no translation) in which large swaths of territory are handed over to conservation groups on the promise of money for nothing. In the bush of Papua New Guinea, carbon deals are known as “sky money”; in Madagascar, where the promised wealth has proved as ephemeral as the product being traded, the Betsimisaraka people talk of strangers who are “selling the wind.”66
A notorious carbon cowboy is Australian David Nilsson, who runs a particularly fly-by-night operation; in one recent incarnation, his carbon credit enterprise reportedly consisted only of an answering service and a web domain. After Nilsson tried to convince the Matsés people in Peru to sign away their land rights in exchange for promises of billions in revenues from carbon credits, a coalition of Indigenous people in the Amazon Basin called for Nilsson to be expelled from the country. And they alleged that Nilsson’s pitch was “similar to 100 other carbon projects” which were “dividing our people with non-existent illusions of being millionaires.”VIII Some Indigenous leaders even say that it is easier to deal with big oil and mining companies, because at least people understand who these companies are and what they want; less so when the organization after your land is a virtuous-seeming NGO and the product it is trying to purchase is something that cannot be seen or touched.67
This points to a broader problem with offsets, one that reaches beyond the official trading systems and into a web of voluntary arrangements administered by large conservation groups in order to unofficially “offset” the emissions of big polluters. Particularly in the early days of offsetting, after forest conservation projects began appearing in the late 1980s and early 1990s, by far the most persistent controversy was that—in the effort to quantify and control how much carbon was being stored so as to assign a monetary value to the standing trees—the people who live in or near those forests were sometimes pushed onto reservation-like parcels, locked out of their previous ways of life.68 This locking out could be literal, complete with fences and armed men patrolling the territory looking for trespassers. The NGOs claim that they were merely attempting to protect the resources and the carbon they represented, but all this was seen, quite understandably, as a form of land grabbing.
For instance, in Paraná, Brazil, at a project providing offsets for Chevron, GM, and American Electric Power and administered by The Nature Conservancy and a Brazilian NGO, Indigenous Guarani were not allowed to forage for wood or hunt in the places they’d always occupied, or even fish in nearby waterways. As one local put it, “They want to take our home from us.” Cressant Rakotomanga, president of a community organization in Madagascar where the Wildlife Conservation Society is running an offset program, expressed a similar sentiment. “People are frustrated because before the project, they were completely free to hunt, fish and cut down the forests.”69
Indeed the offset market has created a new class of “green” human rights abuses, wherein peasants and Indigenous people who venture into their traditional territories (reclassified as carbon sinks) in order to harvest plants, wood, or fish are harassed or worse. There is no comprehensive data available about these abuses, but the reported incidents are piling up. Near Guaraqueçaba, Brazil, locals have reported being shot at by park rangers while they searched the forest for food and plants inside the Paraná offset project hosted by The Nature Conservancy. “They don’t want human beings in the forest,” one farmer told the investigative journalist Mark Schapiro. And in a carbon-offset tree-planting project in Uganda’s Mount Elgon National Park and Kibale National Park, run by a Dutch organization, villagers described a similar pattern of being fired upon and having their crops uprooted.70
In the wake of such reports, some of the green groups involved in offsetting now stress their dedication to Indigenous rights. However, dissatisfaction remains and controversies continue to crop up. For example, in the Bajo Aguán region of Honduras, some owners of palm oil plantations have been able to register a carbon offset project that claims to capture methane. Spurred by the promise of cash for captured gas, sprawling tree farms have displaced local agriculture, leading to a violent cycle of land occupations and evictions that has left as many as a hundred local farmers and their advocates dead as of 2013. “The way we see it, it has become a crime to be a farmer here,” says Heriberto Rodríguez of the Unified Campesino Movement of Aguán, which places part of the blame for the deaths on the carbon market itself. “Whoever gives the finance to these companies also becomes complicit in all these deaths. If they cut these funds, the landholders will feel somewhat pressured to change their methods.”71
Though touted as a classic “win-win” climate solution, there are very few winners in these farms and forests. In order for multinational corporations to protect their freedom to pollute the atmosphere, peasants, farmers, and Indigenous people are losing their freedom to live and sustain themselves in peace. When the Big Green groups refer to offsets as the “low-hanging fruit” of climate action, they are in fact making a crude cost-benefit analysis that concludes that it’s easier to cordon off a forest inhabited by politically weak people in a poor country than to stop politically powerful corporate emitters in rich countries—that it’s easier to pick the fruit, in other words, than dig up the roots.
The added irony is that many of the people being sacrific
ed for the carbon market are living some of the most sustainable, low-carbon lifestyles on the planet. They have strong reciprocal relationships with nature, drawing on local ecosystems on a small scale while caring for and regenerating the land so it continues to provide for them and their descendants. An environmental movement committed to real climate solutions would be looking for ways to support these ways of life—not severing deep traditions of stewardship and pushing more people to become rootless urban consumers.
Chris Lang, a British environmentalist based in Jakarta who runs an offset watchdog website called REDD-Monitor, told me that he never thought his job would involve exposing the failings of the green movement. “I hate the idea of the environmental movement fighting among itself instead of fighting the oil companies,” he said. “It’s just that these groups don’t seem to have any desire to take on the oil companies, and with some of them, I’m not sure they really are environmentalists at all.”72
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This is not to say that every project being awarded carbon credits is somehow fraudulent or actively destructive to local ways of life. Wind farms and solar arrays are being built, and some forests classified as offsets are being preserved. The problem is that by adopting this model of financing, even the very best green projects are being made ineffective as climate responses because for every ton of carbon dioxide the developers keep out of the atmosphere, a corporation in the industrialized world is able to pump a ton into the air, using offsets to claim the pollution has been neutralized. One step forward, one step back. At best, we are running in place. And as we will see, there are other, far more effective ways to fund green development than the international carbon market.
