REPORT ON ACTION IN AMSTERDAM CARBON TRADE CONFERENCE
19th FEBRUARY 2002

CARBON TRADING CONFERENCE STOPPED…FOR A COUPLE OF HOURS!

Today in Amsterdam at 9.30am, a conference designed to inform and educate would-be carbon traders was stormed by local climate activists. The opening session, where BP's Head of Climate Change Mark Akhurst was speaking, was interrupted as activists danced into the room in bright blue wigs, blowing horns and whistles and storming the stage. The activists shouted messages like "Trading in pollution is not a solution" and threw carbon credits to bewildered conference participants.

After the room was occupied by the locked-on protestors and declared a lost cause for the conference events, all potential carbon traders were moved into the lobby area, where they discussed the interruption to the otherwise, fairly dull morning. The day had begun with an unenthusiastic introduction from Point Carbon CEO, Kristian Tangen. The difficult part in these types of events is trying to follow what is an extremely technical subject, full to the brim with assumptions of prior knowledge. However the numbers that Tangen threw at the audience soon pricked up a few ears. In 2002, Point Carbon estimate that the carbon market will be worth a mean average of $489 million USD. Six years before the actual international market formulated in the Kyoto Protocol is set to begin. Tangen described 2002 as "a very interesting year for carbon trading" with "unprecedented opportunities".

Then enter Mark Akhurst, BP's head of climate change with his sets of facts and figures. Akhurst stated that his company had already achieved 5% reduction in CO2 emissions, half of their voluntary commitment to 10% reductions below 1990 levels. All this with the aid of emissions trading which made it cost effective to make such dramatic cuts. BP's emissions trading scheme also managed to earn them $650 million USD in extra profits as most reductions were achieved through energy efficiency and reducing gas flaring. So, for BP, the solution to all our climate-related problems is to implement emissions trading schemes based on their model. And now they've had a few years to practice, they can be the Pied Piper of the market.

Emissions trading may well be the Holy Grail of uniting business and the environment. But before leaping to that conclusion, a closer look a the idea and its propagators is needed. First the 'pioneers' of emission trading - BP. While BP champion themselves as a climate- friendly company, their continued membership in groups like the American Petroleum Institute throws some doubt to their greener than green claims. The API's position in the UN climate talks has been one of "our actions in the next 10 or 15 years will have little impact on the concentration of CO2 in the atmosphere in the year 2050 or 2100." So why are BP remodeling themselves as 'Beyond Petroleum' whilst supporting a lobby group with an anti-action position? Is there real concern for the environment at the core of the BP emissions trading scheme or a cynical attempt to cover all the angles, just in case? As well as make a tidy little profit in the process.

As for emissions trading itself, what became clear from the BP presentation was that the business units involved in their internal scheme were self-monitoring. Akhurst admitted that measuring reported emissions is "never 100% accurate". There is an obvious conflict of interest for players in the market buying and selling carbon credits, while measuring their own emissions and being responsible for the accounting involved. A case in point is the recent scandal involving Enron energy trading company and Arthur Andersen accountancy firm, where Andersens checked the books for the company whist auditing them for government. It doesn't take a genius to realise that the potential for corruption is huge and inevitable, and that is what happened. Arthur Andersen have also been big players in formulating emissions trading systems and former employees of Enron could be found all over the energy corporations in the carbon conference in Amsterdam. A solution to this would be to have independent monitoring of emissions trading. Unfortunately the big corporations are way ahead of government and are traditionally opposed to state intervention in markets and unfriendly to regulation.

Trading in emissions is not just a business solution to climate change, it is the brainchild of big corporations. Small businesses are remarkable by their absence from both today's conference and the history of the development of emissions trading which has been pushed forward by large transnational companies, best positioned to benefit from it. With that realisation comes a need to consider wider issues of corporate-driven policy choices which affect social and environmental problems. Emissions trading, if implemented in a strictly regulated way on a national scale, could reduce emissions. But it can not work internationally considering the huge global diversity of economies and markets, as well as the technical difficulties of reporting emissions accurately and verifying credits.

Finally, and what was ignored by the carbon traders and only remembered by the activists, it will do nothing to challenge the might of the corporations who already have too much say in the decisions that affect the survival of the planet and its peoples.