Upsetting the Offset - Transnational Institute

Foreword
The Business of Carbon is Different
Sunita Narain
Climate change is clearly the biggest challenge our world has ever faced. It is
now clear that if the world does not find ways of reducing its emissions of
greenhouse gases drastically, it is faced with deadly catastrophe. What is also
clear is that this task is not easy, because the emissions are linked to growth. The
challenge, therefore, is to reinvent economic growth so that it does not cost us
the earth.
This is why the world needs the business of carbon. It is a business, which
works to reduce the carbon intensity of economies across the world. It is also a
business, where it makes sense to ‘avoid’ pollution, not to first pollute and then
clean up. In other words, the business is about investing in the opportunities,
which re-engineer growth so that it is more efficient and less dependent on
fossil fuels.
But this business of carbon, we must remember, is not about business as
usual. It is about ensuring that the world takes effective steps to reduce
emissions. This will mean that the business must not fall into the trap of cheap
or corrupt emissions reduction deals. It must not become (as is the current
practice) a simple market mechanism – an agreement between private parties
looking to make a fast buck. I believe that the design of the Clean Development
Mechanism (CDM) is flawed because it promotes really creative carbon
accounting projects. It is also designed to keep prices low and so it forces the
South to discount its advantage in reducing emissions. It is designed to invest in
the small change and not in high end technological options which would
drastically reduce pollution. In this way, it does little to seriously or effectively
combat climate change. This is unacceptable.
If the corporate world has to be part of the solution, as I believe it must,
then it must partner in the idea of the new tomorrow, which is both equitable
and sustainable. Let us be clear, climate change teaches us that there are limits to
growth as we know it. It also teaches us that the world is one; if the rich world
pumped excessive quantities of carbon dioxide into the atmosphere yesterday,
the emerging rich world will do so today. It also tells that we must build
technological and economic futures which will share the benefits of growth with
all. Without fairness and equity, cooperation will not be possible. The bottom
line is that if climate change is the market’s biggest failure, then the market (as it
works today) cannot be the solution.
1