In response to the threat of climate change, the UN passed the Kyoto Protocol in 1997, which was gradually ratified by 156 countries, and later infamously rejected by the world’s biggest polluters – the US and Australia. The Protocol sets the target of reducing emissions by an average of 5.2 percent below 1990 greenhouse gas levels by the year 2012. Emissions trading, the main mechanism for achieving this target, was pushed by the US in response to heavy corporate lobbying. The arrangement partitions and privatises the atmosphere and institutes the buying and selling of “permits to pollute” just as any other international commodity.


What are rights to pollute and how can they be traded?

Under the Kyoto Protocol the “polluters” are countries that have agreed to targets for reducing their greenhouse gas emissions below their country-specific target in a pre-defined timeframe. These countries are the largest polluters, the “developed” countries. The polluters are then given a number of “emissions permits”. The volume is equivalent to their 1990 levels of emissions plus/minus their reduction commitment. These permits are measured in units of carbon dioxide, one of the main greenhouse gases. One ton of carbon dioxide equals one permit. The credits are licenses to pollute up to the limits set by the commitment to reach the average reduction of 5.2 percent agreed in Kyoto. The countries then allocate the permits to the most polluting industries, most commonly for free. In this system the polluter is rewarded.

There are several ways in which the industries can then use the permits:

1. If the polluter does not use its entire allowance, it can either save the remaining permits for the next time period (bank them), or sell then to another polluter on the market.

2. If the polluter uses up its allowance in the allotted time period, but pollutes more, it must buy permits from another polluter that has not used up its full allowance.

3. The polluter can invest in pollution reduction schemes in other countries or regions and in this way “produce” extra credits that can then be sold, banked, or used to make up the deficit in its original allowance.

Credit-earning projects that take place in a country with no reduction target (mostly in the “developing” world) come under the controversial rubric of the “Clean Development Mechanism” (CDM). Projects which take place in countries with reduction targets come under Joint Implementation (JI).

CDM and JI projects can take a variety of forms: carbon sequestration in monoculture tree plantations; renewable energy projects such as solar or wind projects; improvements to existing energy generation; methane capture from landfills; basic improvements to polluting factories and so on. The amount of credits earned by each project is calculated as the difference between the level of emissions with the project and the level of emissions that would occur in an imagined alternative future without the project. With such an imagined future in mind, a corporate polluter can design huge estimates of the emissions that would have been produced without the company’s CDM or JI project. This approach encourages assumptions of what would have happened in the future without the project, if it would have involved the highest possible emissions. The bigger the hypothetical emissions, the bigger the reductions that can be claimed and the larger the volume of credits that can be sold. It is impossible to verify how many emissions would have been generated without the project.


But don’t the trees absorb carbon dioxide? That is a good thing, right?

Trees do absorb carbon dioxide, but they also release carbon dioxide. Measuring exactly how much is soaked up and how much is released over the lifetime of a tree is difficult enough – when trying to do these measurements for complex forests or even a whole tree plantation, it becomes impossible. It has been shown that diverse, old-growth forests have a far greater capacity than monoculture plantations to absorb more carbon dioxide than they give off. Plantations also have many serious other negative impacts on biodiversity, the climate and the communities who live nearby that are not reflected in carbon calculations.

Is Plantar in the market now?

In 2001, Plantar purchased and planted eucalyptus plantations over large amounts of land in Felixlândia, Brazil, where the documentary was filmed, in order to prove ‘additionality’ of the plantations (meaning the plantations are something additional to their regular operations). Plantar tried unsuccessfully three times to register its plantations and industrial processes as part of the CDM so that it could start generating lucrative carbon credits. Previously, a proposal was to grow eucalyptus plantations that could be used for the production of charcoal as a means of avoiding coal mining.

A different version of the Plantar project was finally approved by the CDM Executive board in August 2007 – this time for reducing emissions by the capture of methane generated by burning the eucalyptus inside ovens to create charcoal for Plantar’s pig iron factories. The pig iron is then used to make steel, 60% of which is exported, and largely used to build machinery and cars. This is just one example among many of large-scale corporate polluters gaining both profits and environmental legitimacy at the expense of local communities on the international carbon market. The combination of local and international resistance to such projects are vital in highlighting both the injustice perpetuated by carbon trading, and its ineffectiveness of dealing with the threat of climate change. Resistance inside Brazil and at the international level put pressure on the UN to continue to reject these applications until recently. But continued resistance is necessary to ensure that companies like Plantar are kept out and that carbon trading as a solution to climate change is further challenged and eventually rejected.

What does the World Bank have to do with it?

The World Bank Prototype Carbon Fund (PCF), which was launched in 2000, invests money from companies and governments in projects designed to reduce the emission of greenhouse gases and generate credits that can then be sold on the carbon market. The bank has become the largest public broker of carbon purchases, and makes a substantial profit from the commission that it receives from the sale of the credits generated by the projects. In 2002 the World Bank entered into an agreement to purchase emissions reductions from the Plantar project.

At that stage, because the project had not been accepted by the CDM, the credits that were being generated were ‘Voluntary Emissions Reductions´(VERs) – which are emissions that are only usable for companies and individuals in the voluntary market. When a project is fully functional under CDM regulation, it generates ‘Certified Emissions Reductions’ (CERs) which are what companies and countries can use to count towards their Kyoto targets. There is much greater demand for CERs rather than VERs, and they also fetch a much higher price on the carbon market. There was a lot of pressure for the Plantar project to be accepted under the CDM so that it would generate more carbon profits for both Plantar and the World Bank.

Pollution trading is not a solution to climate change!

Carbon trading is an elaborate means of dangerously delaying the changes that need to happen in the transition to a global, low-carbon economy. These changes are simple enough in theory, namely, reducing our energy use, switching away from fossil fuels and towards equitable, and justice-based models of renewable energy production and consumption. In practice, these changes constitute a global challenge that involves social and political change, and encompasses a wide variety of issues including land rights, neo-colonial exploitation, trade and South-North relations. The South is not a (carbon) dump for the North and should not be viewed as such. Rebuilding these South-North relationships and addressing historical ecological debt are critical. The failure of the Kyoto Protocol to deal adequately with climate change is also representative of wider issues of democratic decision-making and symptomatic of the injustices that permeate international relationships between peoples. In this way, climate change can be seen as a window into addressing truly profound social change.