COP 19 | Increasing pollution: Climate negotiations for corporate and financial powers

For almost 20 years, multilateral climate policies have focused on creating profitable financial schemes that maintain fossil fuel-dependent systems responsible for the climate crisis. This year in Warsaw, Poland, the 19^th Conference of the Parties (COP 19) to the UN Framework Convention on Climate Change (UNFCCC) will be no exception. The EU’s agenda for the COP19 will be both to scale-up carbon trading mechanisms and find other ways of sustaining an industrial system dependent on coal, oil and gas.

In attempting to increase the reach of carbon markets, the EU will pledge its continued support to a set of failed policies that have been recently rejected by more than 140 organizations and social movements from around the world.[i] The EU, together with Norway, Australia, the USA, and a host of corporate allies, are determined to push through a decision in Warsaw that would establish more environmental markets under the UNFCCC to supplement the EU Emissions Trading Scheme (ETS), which lies in a shambles.[ii] The New Market Mechanism (NMM) aims to expand the scope of offset schemes like the Clean Development Mechanism (CDM).[iii] While the Framework for Various Approaches (FVA) would involve an agreement to approve international trading of credits from various existing national, regional and local carbon markets for compliance with the commitments under the Convention.

Diverging views mean that the structure of a possible NMM remains undecided, however one key distinction under discussion is between project-specific approaches, like the CDM, and sectoral ones[iv]. The EU envisions a NMM that covers broad sectors of Southern countries’ economies. Sectoral trading would be based on allowances, such as the EU ETS, and would entail that an emissions cap is established per sector in Southern countries, with allowances traded between those who are under or over the cap. The 2012 COP decisions agreed on guiding elements for the NMM, which, open to a range of interpretations, raise concerns such as the expansion of carbon markets to include forests and other land-based emissions. Meanwhile, the FVA would allow carbon pollution rights from various domestic ETS to be traded under the Convention. Pollution permits created by schemes with very different rules would become tradable on a wider scale in a move toward a “global carbon market”. The EU reiterates that countries with the necessary capacity should move away from the CDM and towards participation in the NMM and ultimately in cap-and-trade systems[v].

But COP19 not only risks adding to the EU ETS disaster, it also scales up corporate capture of the climate negotiations. As the Minister of the Environment of Poland, Martin Korolec, in charge of organising the UN talks announced,  “[f]or the first time in 19 years, since the climate talks are being held, representatives of global business will be a part of it.”[vi] This consolidates a dangerous trend by openly placing corporations at the centre of the process of deciding climate solutions, guaranteeing further “corporate-friendly” policies that will benefit polluters further instead of forcing them to take effective action.

To make things worse, the companies singled out are those with some of the worst track records on climate[vii]. Some examples are Arcelor Mittal, a steel giant which has massively profited from carbon markets while damaging vulnerable communities; Alstom, which plans to build the biggest coal power plant in Poland; PGE, which plans to build up to six new blocks of coal power plants in Poland while PGE’s coal-burning power plant, Bełchatów, was the biggest recipient of free ETS allowances in 2012; the oil company LOTOS S.A, which is involved in shale gas; and car giants such as General Motors and BMW.

The coal industry, one of the dirtiest energy sources contributing to the climate crisis, will also be advanced at COP19. The Polish Ministry of Economy has launched with the World Coal Association, a declaration supporting new “clean” coal.[viii] Apart from calling on developmental banks to support Southern countries in accessing new coal technologies, they are organising a “Coal and Climate Summit” during the talks.[ix]

COP19 is shaping up as a culminating moment in the corporate capture of the UN talks. For governments to partnering up with some of the biggest culprits responsible for the climate crisis in the ways that COP19 promises goes beyond even the EU ETS and its provisions allowing polluters to profit at the expense of the climate.

We, the undersigned organizations, denounce governments, the UN and its financial allies for giving so much power to corporations and their lobby groups instead of standing up to them and enabling a transition to a post-fossil fuel society. It is time to scrap the ETS and other nature-related markets, time to call a halt to all other false solutions to the climate crisis, and time to leave fossil fuels in the ground.