Does money really grow on trees?

Expanding carbon markets: big business and carbon policy

Global investment in carbon markets is backed by strong claims it will deliver substantive economic returns, with Chicago trader Richard Sandor describing carbon as set to become the largest commodity in the world.

Privileged access to climate policy makersUNFCCC logo

The green economy and carbon markets are attracting significant investment, including amongst those some would consider strange bedfellows. Global investment in carbon markets is backed by strong claims it will deliver substantive economic returns, with Chicago trader Richard Sandor describing carbon as set to become the largest commodity in the world.[i] With economic returns CMIA logoanticipated to grow, actors with a financial stake were amongst the corporate sponsors and lobbyists at the 2013 United National Framework Convention on Climate Change’s BP logo(UNFCCC) Conference of the Parties (COP19) held in Poland. Amongst these included interests from the fossil fuels, agri-business, agrofuels, transport, steel, mining, oil, and the finance sectors and industries. Amongst the green economy Shell logoentrepreneurs with a strong lobby presence at the conference were also members of the  International Emissions Trading Association (IETA), with a membership that includes British Petroleum (BP) and global finance trader Goldman Sachs, as well as carbon trading companies (including EDF Trading and Vattenfall Energy Trading).[ii] ExxonMobil logo The Carbon Markets and Investors Association (CMIA)[iii] – whose membership includes international banks and venture capitalists – also has privileged access to climate policy makers.

A channel to the UNFCCC

There are other consortiums of interests that also appear to have privileged access to decision makers in United monsanto logoNations’ climate negotiations. The International Petroleum Industry Environmental IPIECA logoConservation Association (with members including BP, Chevron, ExxonMobil, Shell, and Total) has a formal channel to the UNFCCC. Meanwhile, the World Business Council for Sustainable  Development – comprising CEOs from multinational corporations, including many with poor records related to human rights, such as Shell, Dow Chemical, Monsanto, and Rio Tinto – lobbies for business interests to be represented in international climate negotiations[iv]Goldman sachs logo

Shaping the lines of influence

There is other evidence of collaborations, as well as revolving doors, between the United Nations and carbon commodity traders. As an example, after he championed the development of the carbon trading system as Head of Greenhouse Gas Emissions Trading at the United Nations Conference on Trade and Development (UNCTAD), IETA logoFrank Joshua moved on to become global director of Greenhouse Gas Emissions Trading Services at the now collapsed Dow chemical logoglobal accounting firm Arthur Andersen. From there he moved to NatSource, a large US based carbon commodity trader. It is the outcome of such cross sectoral lines of influence – where individuals are able to shape the contours of carbon markets, including regulations and market mechanisms, and then profit from such arrangements – that is one of the drivers of climate market development.[v]

Given this scenario, one could be seduced to believing that money really does grow on trees!


Sources

[i] Lohmann, L. The Endless Algebra of Climate Markets. Capitalism Nature Socialism. Vol. 22, No. 4, pp. 93-116.

[ii] International Emissions Trading Association. http://www.ieta.org/ (accessed July 2, 2014); Corporate Europe Observatory. The COP 19 Guide to Corporate Lobbying. Climate Crooks and the Polish Government’s Partners in Crime. Corporate Europe Observatory and Transnational Institute 2013. http://corporateeurope.org/blog/cop19-guide-corporate-lobbying (accessed February 28, 2014).

[iii] Climate Markets Investment Association, http://www.cmia.net/ (accessed July 2, 2014).

[iv] International Emissions Trading Association. http://www.ieta.org/ (accessed July 2, 2014); Corporate Europe Observatory. The COP 19 Guide to Corporate Lobbying. Climate Crooks and the Polish Government’s Partners in Crime. Corporate Europe Observatory and Transnational Institute 2013. http://corporateeurope.org/blog/cop19-guide-corporate-lobbying (accessed February 28, 2014).

[v] Lohmann, L. The Endless Algebra of Climate Markets. Capitalism Nature Socialism. Vol. 22, No. 4, pp. 93-116.

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