From poverty to power - Oxfam-Québec

FROM POVERTY TO POWERThe CDM is beset with other problems: severe doubts surround thecredibility of monitoring and verification of carbon reductions insome countries; the poorest countries are effectively excluded by theirlow levels of emissions and lack of concentrated sources; and theinitiative may even deter governments from curbing pollution, as theywait for a chance to ‘cash in’ under the CDM. In such circumstancesthe offsetting option within the EU scheme constitutes a major leakage,offering firms the chance to buy their way out of carbon constraintson the cheap, with few net benefits in curbing overall emissions.There is also a real tension between the CDM’s twin aims of reducingoverall emissions and transferring funds for low-carbon investmentsin the South. The market suits big, cheap emissions reduction projects,such as overhauling outdated chemical plants, rather than thedispersed investments that benefit poor people directly.The strength and utility of these markets depends on how existingpolicy frameworks are reformed to make them more stringent,predictable, and credible. 233 Some potential key developments underallowance-based cap-and-trade systems include extended geographicscope and linking between markets in different countries; inclusion ofnew sectors, such as aviation; and more auctioning of permits, insteadof free handouts to polluters (the leading allocation method in thepast). In the longer term, more radical exponents of market solutionshave even floated the possibility of personal carbon permits, providingincentives for individuals to save energy and sell their savings toinveterate SUV-driving, flight-hopping carbon hogs.To date, however, carbon markets have not delivered either significantemissions reductions or progress towards more sustainabledevelopment models. The risks of failure are enormous. By the timewe know how effective carbon trading really is, billions more tonnes ofcarbon will have been pumped into the atmosphere and irreversiblechanges may well be under way.The reliance on carbon trading betrays a mix of ideological biasand perhaps the influence of lobbying from traders always keen tocreate another profitable (and preferably volatile) market. Trying toapply a market solution like carbon trading to every problem canentail seemingly endless contortions, when often a simple regulationor tax would be both more direct and more effective. 234 Other416