Date: Sun, 15 Nov 1998 19:35:28 -0500
From: Barbara Larcom <larcom@bcpl.net>
Date: Sun, 15 Nov 1998 14:53:25 -0800 (PST)
From: Daphne Wysham <dwysham@igc.apc.org>
To: 50-years@igc.org
Subject: Guardian article re: Bank's carbon trading
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Friday November 13, 1998
Anger as Bank tries to rule carbon trade
By Paul Brown
The World Bank plans to take control of the £60 billion international carbon
trading market being set up under the Climate Change Convention, even before
the 167 countries involved agree how it will be organised.
Confidential documents leaked to the Guardian at the climate talks in Buenos
Aires show that even the United States treasury is alarmed by the move. It
sees a conflict of interest with the bank's other role as a developer of
fossil fuels, a role in which the bank has a bad reputation among
environmental groups and in the developing world.
The World Bank itself fears its move may carry the 'political risk of
seeming to get ahead of the convention on emissions trading', but sees rich
rewards from controlling a system by which Third World countries can sell
their pollution allowance to developed countries in return for cleaner
combustion technology.
The bank plans to charge 5 per cent commission on all deals. It estimates
that the market will be worth £90 billion by 2020, giving a total commission
income of £4.5 billion, of which 60 per cent will be 'profit above
administration costs'.
Rather than opt for expensive fossil-fuel reductions at home, companies can
buy cheap carbon credits from developing countries, the bank says. It
believes that renewable energy sources like wind and solar power are too
expensive, and suggests further investment in fossil fuels.
This would involve Western countries building new coal-fired plants to
replace inefficient ones in developing countries, and then claiming those
countries' carbon credits because of the efficiency gained. The World Bank
in its document calls it 'a win-win of collecting low-hanging fruit', but in
English it means easy pickings.
The leak coincides with a report published yesterday in which the bank is
strongly criticised for continuing to build fossil-fuel plants in the
developing world. The US Institute for Policy Studies and the International
Trade Information Service say this makes the bank unsuitable for any role in
the carbon market.
The joint report says that since the Rio Earth Summit in 1992 the bank has
spent 25 times more on supporting fossil-fuel projects than on renewable
sources of energy. In the past year it has voted almost £800 million for
four massive coal burners in China alone.
The bank claims that the new plants are needed to bring electricity to the 2
billion people in the world without it, and much needed economic
development. In reality, the report says, almost all the investment goes to
existing industrial areas, and large and often dirty industries from the
developed world move in to take advantage of cheap power. Only 7 per cent of
the power provides electricity to people who previously had none.
Daphne Wysham, the author of the report, said: "It is appalling news that
the bank plans to try and control carbon trading. It has a terrible track
record of wrecking the climate by building coal stations in the developing
world without proper environmental controls. Even the US government is
alarmed."
The US treasury document says the conflict arises from the bank's role as a
developer of fossil fuels, a promoter of greenhouse gas reduction, and now a
carbon trader. 'The bank has a credibility problem, having long supported
fossil-fuels development... having failed to implement its own energy and
environment policies,' it says.
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Daphne Wysham ph: (202)234-9382, X208
Institute for Policy Studies fax: (202)387-7915
733-15th St., NW e: dwysham@igc.apc.org
Suite 1020
Washington, DC 20005 http://www.seen.org