Why Market-Based ‘Solutions’ to Climate Change Can Cause More Harm Than Good

When I learned last November that California’s then-governor Schwarzenegger had signed agreements to build a carbon offset protocol into California’s Global Warming Solutions Act (AB32) (see AlterNet’s coverage hereand here), and that one of these agreements was with the state of Chiapas, Mexico, where I’ve spent significant time, I wondered immediately what this would mean for the Indigenous communities of Chiapas, who have engaged in a long struggle for autonomy over their resources and territories.

Chiapas, on the border with Guatemala, is Mexico’s poorest state, with large areas of forest and the country’s largest indigenous population. In 2009, the state launched and began widely publicizing its Climate Change Action Programme. The plan includes vast biofuel plantations, forest carbon offset projects, and a statewide “productive reconversion” initiative to convert subsistence farmers into producers of African palm, Jatropha, and export-oriented crops such as roses, fruits, and coffee.

I traveled to Chiapas in March to investigate. Among the dozens of people I spoke with was Gustavo Castro Soto, the coordinator of Otros Mundos, a small but prolific organization based in San Cristóbal de Las Casas, the old colonial capital of Chiapas. Otros Mundos is the coordinating body of Friends of the Earth (FOE) Mexico, and a member of FOE International; locally, regionally, and internationally, Gustavo and Otros Mundos work to bring attention to the environmental and human rights impacts of corporate-led globalization in the form of large dams, mining, industrial agriculture, and, most recently, market-oriented climate mitigation policies such as the Clean Development Mechanism (CDM) and the emergent protocol known as Reducing Emissions from Deforestation and Degradation (REDD).

I spoke with Gustavo about the impacts he sees these recent policies having in Chiapas.

Jeff Conant: One of the latest issues to call the attention of social movements in Chiapas is a policy called REDD, Reducing Emissions from Deforestation and Degradation. REDD is being developed and piloted in many forested tropical countries. What’s the concern?

Gustavo Castro: To see the concerns with REDD, you have to put it in the broader context of false solutions to climate change. If the more developed countries have signed the Kyoto Protocol, this legally binds them to reduce their Co2 emissions by five percent from 1990 levels. But this reduction is ridiculous — in 1990 it was calculated as necessary to reduce greenhouse gases by some 80 percent; so governments and corporations did everything they could to reduce this 80 percent to 5 percent.

Worse, they see that this 5 percent reduction means less money, so they found a way to flip the commitment. They say, “Okay, rather than develop technologies that prevent cars from emitting Co2, because that’s too expensive, lets find a way to absorb Co2, that’ll be cheaper.” In order for there to be compensation for this, they come up with a price per ton of Co2 and voila, they invent Carbon Credits.

Within this framework they say, what else generates Co2? Well, global deforestation is responsible for eighteen to twenty percent of excess Co2. Deforestation implies that the Co2 that’s been converted to wood, when you burn it, you release the Co2 into the environment. So they propose the reduction of deforestation and they create RED, Reducing Emissions from Deforestation. But Co2 is also emitted when soils and biodiversity are degraded, when fields or forests burn or vegetative material is cut. So they add the second “D,” for degradation, and call it REDD.

So how do we avoid deforestation? We pay people. And, well, if we can make a business by paying to not deforest, then we’ll need to acquire large expanses of forest to feed this business. Let’s say I need to reduce my Co2 emissions; rather than reduce, I buy the right to absorb it — I buy a carbon sink. The big carbon sinks are the countries that have forest, so these countries, with vast forest cover, Costa Rica, Guatemala, México, Brazil, Colombia, can now sell the ability of their trees to produce fresh air, as it were. You, in the North, you need fresh air? I can sell it to you. So, they put a price on the trees and on fresh air, measured per ton of Co2, and they create the carbon market.

JC: This despite the fact that Co2 from hydrocarbons is fundamentally different from the Co2 in trees?

GC: Well, yes, it’s worth mentioning that the planet’s natural vegetation drives the carbon cycle. When we add extra Co2 from hydrocarbons that have been buried for millions of years, Co2 that’s artificially extracted and is saturating the atmosphere, it’s simply wrong to believe that normal vegetation can absorb this. The same forests have existed for hundreds and thousands of years, but they don’t have the capacity to absorb the hydrocarbon pollution artificially created by petroleum extraction.

JC: But, in order to make a business out of it, they have to bend the science a little.

GC: It stops being science, and it becomes business. All of the pollution of the North, now the South has the duty of absorbing it, by way of reforestation. Going even further, they say, since we have to reforest, let’s sell the idea that monoculture forest plantations are the same as forests, and we’ll justify this with scientific data, even though a tree plantation really absorbs only 20 percent of the Co2 that a primary forest does, and we’ll say, I can clear-cut the Amazon and plant pine trees.

At the same time as I sell the capacity of the pine trees to absorb carbon, I sell the timber, or I plant Eucalyptus and at the same time I sell paper, or I plant African palm and I sell both the fresh air from the African palm and also the palm oil, despite all that this implies in degradation and loss of biodiversity, impacts on the water, and so forth. Suddenly, monoculture plantation = jungle = primary forest. It’s a fallacy, and a trap.

JC: And this is all part of the broader trend of privatization of territories and natural resources?

GC: At the end of the day, when a natural function like forest respiration becomes a product with a price, it’s easy to see who’s going to end up with control of the forests. To take a current example: enter the governor of California, saying, “We’re going to approve a law in which California, the fifth largest economy in the world, with tremendously polluting industry, is obliged to reduce its Co2, so we need to buy the fresh air from the forests of the South.”

So they’re going to buy the breath of the Lacandon Jungle [the largest forested area in the state of Chiapas, and the northernmost rainforest in Mesoamerica]. They sign an agreement, and they say, “You Lacandones [one of the indigenous groups inhabiting the Lacandon jungle] have to prevent any other indigenous community from entering here, and what’s more, we have to expel all of those that are here now, to keep everyone out. We have to maintain the jungle so they’ll buy it from us.” The communities, facing the rural crisis and NAFTA [the North American Free Trade Agreement] and the difficulty of getting a fair price for their corn and beans, respond positively: “Okay, let’s sell them the breath of the trees.”

To support these forest projects, along come credits from the World Bank and the InterAmerican Development Bank, to monetize the country’s forest cover and get it into the carbon market. The government acquires currency in the transaction and after servicing their debts, shares the little that remains among the indigenous communities. Facing the crisis, a little money is a good thing. But you do the accounts, you look at the money that reaches each family for environmental services — which is nothing more than putting the environment into the market to become a tradable commodity, a service, just like transportation, food, hotels — and you find that, ultimately, that price is very small.

JC: From the dominant market perspective, it sounds good, the idea of paying people to conserve forests.

GC: But it fails to attack the roots of the problem; what’s not mentioned, for example, is that we might renegotiate NAFTA so indigenous farmers can get fair prices, and that we might stop importing highly subsidized GMO seeds from the U.S. One solution is a just market: the U.S. eliminates its subsidies, Mexico does too, and let’s see how things settle out. But as it is, NAFTA goes unquestioned, so nothing remains but for the campesino [peasant farmer] to sell environmental services, and there goes his territory, into the market. In the degree to which environmental services generate payoffs, people will be expelled, bought, acquired, according to the logic of the market. Now, indigenouscampesinos are being expelled from their lands due to mining because there’s money in it; when there’s money in protecting nature, in protecting trees and their ability to absorb Co2, the danger will be the same.

It’s that simple. If I’m the owner of a natural protected area, I obtain the concession for an open-pit mine and this requires cutting down 10,000 hectares of trees. If this causes Co2 emissions, then I pay you to protect your forest. That’s REDD: if you pay me, I won’t deforest. It comes to seem very amiable for the governments and corporations of the North to say, “We’re going to pay you not to deforest,” when in reality they’re saying. “We’re going to pay you so we can continue polluting.”

JC: And how is this affecting traditional agricultural livelihoods?

GC: Through what they call “productive reconversion.” It’s no longer considered “productive” to plant corn, because we import tons of Monsanto corn from the U.S. for a very low price. If we let Monsanto control the price of rice, and corn, and seeds, then we need people to plant African palm because this can bring more money: the campesinos will plant African palm, and the oil palm business is guaranteed for 35 years, because they prohibit cutting the trees. There are already 14 African palm nurseries in Chiapas. They’re planning to plant a belt around the Lacandon jungle to make what they’re calling a “buffer zone,” to protect the jungle, and to “generate productive activities that protect the heart of the jungle.”

This is a huge fallacy. You don’t conserve biodiversity by surrounding it with monoculture plantations. Nor does this justify or guarantee any sort of development for the indigenous communities.

It’s not only the African palm plantations being incorporated into the market, but Jatropha. In the degree to which petroleum prices keep going up, Jatropha or whatever other biofuel feedstock will get increasingly more cost-effective. This is going to bring grave consequences. ADO, the biggest bus line in Southeastern Mexico, is signing an agreement to buy all the biodiesel produced in Chiapas. In the degree to which industry continues consuming and demanding palm oil, it will compete with hunger, and this will have repercussions in the price of basic commodities. When industry is permitted to include these plantations within the framework of “environmental services,” calling it green capitalism or green production, it further competes with popular demand: it increases prices and leads to more market concentration.

So they concentrate the production of food and of seeds, with a steadily increasing demand from industry, and with steadily increasing price of petroleum, and it causes hunger, everywhere. And who benefits? The transnational seed companies.

JC: And this is also part of what they call REDD +?

GC: Right, therein we have the tendency to add to REDD the “plus”: the seed companies come, saying, “You have to pay us, too.” Why? Because its not only deforestation or degradation that emit Co2, they say, but also traditional forms of agriculture: suddenly it turns out that indigenous peasant farmers are to blame for global warming. So Monsanto and other companies say, “We’re planting millions of hectares to feed the world in a way that’s sustainable and ecological.”

And this, how? “With our technology, we’re not tilling the earth, because tilling releases Co2. We inject the seeds, and our huge monoculture plantations are providing healthy food.” So suddenly they say they’ve invented “Carbon-free foods,” and they call it “zero-till farming”. So they want to be paid for this, saying “If traditional peasant farmers planted here, they’d release tons of Co2, but if I, Monsanto, plant here, I release no Co2,” and this results in carbon credits.

JC: Another element that strikes me as important is that the government of Mexico is at the top of the list of debtor countries to the World Bank and the InterAmerican Development Bank. So the government needs to attract money to pay its debt. Is that part of the equation?

GC: Mexico’s primary sources of income are petroleum, foreign remissions, and tourism. The government is cutting social services in order to maintain payments on the external debt. The public health system is hanging by a thread, and the government needs to generate new markets; the market where Mexico has the best comparative advantage is its forests: to sell fresh air, to sell jungle, to sell plantations. At the end of the day, this requires a mechanism to make this market appealing, and this is where we find the emergence of “environmental coyotes.”

These are pro-business, pro-government NGOs that manage millions of pesos to distribute to indigenous and campesino communities for the favor of maintaining their forests so that the First World can clean its conscience and believe that it is reducing or avoiding the threat of climate change. But it’s a scheme that has failed, and that has brought about food insecurity by requiring that people no longer plant food crops. The people respond, saying, “I can’t eat African palm.” But once you’ve begun, you can’t stop producing it or the price drops, as happened with coffee and other crops. Besides, you can’t cut it for thirty years, so you’ll be a palm farmer the rest of your life.

When you distribute the payments for environmental services among the rural communities, some get more and others less, but it rarely comes out to more than the minimum wage, so where’s the comparative advantage? Whether thecampesino goes to work all day in the coffee fields, or goes to the city to work as a janitor, he’ll earn the same 40 or 50 pesos a day. So this keeps the communities at a level that permits them to maintain this environmental service, and gives millions of dollars in credits to the corporations to not reduce their pollution. It doesn’t combat climate change, it doesn’t modify emissions, it doesn’t generate development; on the contrary, it brings about the concentration of territory and causes campesinos to be expelled from their lands in direct proportion to the growth of the market. And, it hides the true business of the Northern countries, of Europe, the U.S., Japan, which emit 66 percent of the world’s Co2. So the only real solution is to reduce emissions in the North.

JC: According to international law, any projects that will impact indigenous communities can be undertaken only with Free, Prior and Informed Consent, meaning a clear process of community consultations. Is this being done in Chiapas?

GC: There’s a lot of talk in the government’s documents, in the REDD scheme, of the need for consultation. But it hasn’t generated any consultation, and I doubt that it will. When we talk about consultations, we have to take into account who does it, and what we mean by “prior” and “informed.” I mean, if you want your project to move forward, what information are you going to give? What they say to the communities is, “if you protect your forests you are being ecological, and you can have development, and we’ll pay you. We’re protecting the planet, we’re fighting climate change, and we’ll pay you to help.” So then, the consultation consists of one question: “Are you with us?” And the answer you can expect from rural communities is, “Of course we are.”

At the end of the day the people receive the payment for environmental services without any awareness of the global mechanism and without realizing that these forty or fifty pesos they get are not solving the problem, all it’s doing is giving you forty or fifty pesos that you no longer get from harvesting corn, because Monsanto took away your market. All it’s solving is that you don’t die of hunger.

Instead of doing consultations, they come to the communities and they say, “You’re going to get some money, practically for nothing, and all you have to do is keep this forest on your land, and what’s more, we’re going to give you these palm trees to plant.” And on top of that, they say, “AND, if you plant this African palm you can earn money from the fruit, but you can’t cut it down, because it’s good for thirty years.” Well with that what are you going to say?

JC: Meanwhile this allows them to ignore the roots of the problem in megaprojects, like mining, which are expanding throughout the region. What does this have to do with the large-scale regional development plan called Plan Mesoamerica?

GC: In México, 30 percent of the national territory is concessioned to mining, the majority being open pit mining, which implies deforestation of a huge proportion of the country. Guatemala, Honduras, Ecuador, Peru, these countries have 24 to 28 percent of their territory in mining concessions. So, given the need to absorb all the Co2 being emitted by the North, they turn it into another business: “If you pay me, I won’t mine these concessions,” or, even better, “I’m going to mine using clean development.”

What does this mean? Let’s say in the mining process, I use diesel trucks and generate ten tons of Co2. So, instead of using diesel, I use biodiesel, and with this I only release five tons of Co2. Bravo! I’ve cut my emissions by half. Of course you don’t take into account that to produce biodiesel you are using huge extensions of land to plant canola, corn, etcetera, degrading the environment, polluting the water, giving control over seed production to the big monopolies that compete with people’s hunger; yet because they switch out hydrocarbons for seeds, now they’re “green.” Then, these five tons of Co2 I’ve saved convert into five credits that I can sell. Another company comes along and needs to reduce by five tons, so they buy these credits. What it’s doing is exacerbating climate change, not mitigating it.

In the case of hydroelectric dams, its the same: they call it renewable energy, because instead of a diesel or gas plant that emits 10 tons of Co2, they do with a dam that emits three, so I’ve saved seven tons of Co2 emissions. Well, I need to be thanked for this, since I’m doing clean development, so these seven tons are converted into seven credits that I can then sell. So all of this has encouraged a boom in hydroelectric dam construction, not clean energy. And, it displaces people who then have to deforest somewhere else to build their houses and to plant crops because they have to eat, so it actually causes double or even triple deforestation and Co2 emissions. So what they call clean development is pure speculation, and pure profit.

What this all has to do with Plan Mesoamerica, previously called the Plan Puebla-Panamá, is that businesses need cheap energy. Any company can install itself anywhere, from Panamá to México, if it has a good, cheap, and abundant source of electricity. Unless the governments build infrastructure, there’s no investment. So the governments develop infrastructure using loans from the InterAmerican Development Bank. Then I, the business, need ports, highways, railroads, legal guarantees, clear agreements about land ownership, I need energy, I need water systems.

And in order to do this all within the terms of the green economy, I also need biodiversity, the carbon market, biofuels. To the degree that petroleum prices keep rising, biofuels are going to become much more attractive. So, we’re going to plant transgenic corn to displace indigenous and campesino populations, we’re going to plant thousands and thousands of hectares of African palm, of soy, of sorghum or whatever it takes, because it’s a big business that’s only getting bigger.