Carbon Trading

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a critical conversation on climate change, privatisation and power

development dialogue no. 48 september 2006

Guest editor and author Larry Lohmann Editors Niclas Hällström Olle Nordberg Robert Österbergh Sub-editor Wendy Davies Production editors Mattias Lasson Gerd Ryman-Ericson Design and layout Mattias Lasson Printers Mediaprint Uddevalla, Sweden, September 2006 This issue of Development Dialogue is the second in a series of What Next project publications. It also forms part of a new phase in the journal’s history. Development Dialogue has been given a fresh look - a new cover design and a new layout. At the same time we are introducing a new and simpler numbering system, consisting of a running number along with month and year of publication.This issue is No. 48 in the series of issues published since 1972.The length of Development Dialogue issues may vary more than before.We hope the new design of the journal will meet with readers’ approval. Development Dialogue will continue to provide a space for pioneering ideas, and the essential character of the journal will remain unchanged. This issue of Development Dialogue is published in cooperation with the Corner House.

Subscribers are kindly requested to inform the Dag Hammarskjöld Centre of any changes of address or subscription cancellations. Editorial Office The Dag Hammarskjöld Centre Övre Slottsgatan 2 SE-753 10 Uppsala, Sweden Fax: +46-(0)18-12 20 72 E-mail: secretariat@dhf.uu.se Website: www.dhf.uu.se The opinions expressed in the journal are those of the authors and do not necessarily reflect the views of the Dag Hammarskjöld Foundation. ISSN 0345-2328

Larry Lohmann works with the Corner House, a small research and solidarity organisation in the UK. He is the co-author of Pulping the South: Industrial Tree Plantations and the World Paper Economy (with Ricardo Carrere, 1996) and Whose Common Future? Reclaiming the Commons‚ (with Simon Fairlie, Nicholas Hildyard and Sarah Sexton, 1993), and co-editor of The Struggle for Land and the fate of the Forests (with Marcus Colchester, 1993). Since then, he has published articles and book chapters on climate change, land rights, globalisation, racism, forest conflicts, development, environmental change in Southeast Asia and the politics of cost-benefit analysis. During the 1980s he lived and worked in Thailand, most of the time with non-governmental organisations. Website: www.thecornerhouse.org.uk

Contents
Editorial note Chapter 1 Chapter 2 Chapter 3 Introduction – A new fossil fuel crisis ‘Made in the USA’ – A short history of carbon trading Lessons unlearned – Pollution trading’s failures Property rights and privatisation Emissions trading vs. structural change The special problems of carbon projects Where’s the enforcement? Narrowing the discussion Summing up – Market ideology vs. climate action Offsets – The fossil economy’s new arena of conflict The beginnings – A story from Guatemala From the Netherlands to the Andes – A tale from Ecuador The story continues – Carbon forestry in Uganda Costa Rica – ‘Environmental services’ pioneer India – A taste of the future Sri Lanka – A ‘clean energy’ project that was not so clean Thailand – Biomass in the service of the coal and gas economy South Africa – Carbon credits from the cities Brazil – Handouts for repression as usual Photo Essay Plantar vs. local people – Two versions of history Ways forward The Durban Declaration on carbon trading 2 5 31 71 73 101 137 187 190 198 219 222 226 237 247 254 272 280 287 302 309 329 356

Chapter 4

Chapter 5 Appendix

Editorial Note
It is now accepted worldwide that the globe is warming to such an extent that the livelihoods of large swathes of the world’s population are under serious threat. Violent and frequent storms wreck people’s habitats; unpredictable weather drastically changes conditions for agriculture; new health threats emerge. As a result, awareness of global warming is increasingly influencing...
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