A Critical Conversation on Climate Change ... - Green Choices

176 development dialogue september 2006 – carbon tradingstops to prevent engine idling, bought battery-operated lawn mowersand so on. Whether or not these ‘offset’ technologies are themselves regardedas innovative, they were used to relieve pressures on large emittersto make other, more substantial technological changes.Similarly, as also mentioned above, ‘offsets’ used in the US EnvironmentalProtection Agency’s ‘bubble’ programmes removed big polluters’incentives to innovate to control their own emissions, usuallythrough use of credits generated by an already-existing technology.Firms also claimed credits for shutting down emissions sources or forproduction slowdowns, even when such actions were undertaken forbusiness reasons. Writing of such ‘paper credits,’ environmental lawyerDavid Doniger wrote in 1986 that ‘in practice…there has been farmore innovation in shell games and sharp accounting practices thanin pollution control technology’. 403In a similar way, the Kyoto Protocol’s credit-generating mechanisms– JI and CDM – are designed in a way that allows industries in thewealthiest countries to avoid or delay innovation in their own technologicalsystems as long as they fund the installation of off-the-shelftechnology in Southern or Eastern European countries.These mechanisms have been a particular failure in promoting renewableenergy, in which innovation is especially desirable. Olderindustrial plants whose emissions are supposedly ‘compensated for’ bycarbon credits bought from abroad will more easily undercut newer,more efficient technology, reducing incentives for change. And in additionto failing to promote innovation in the North, they also fail topromote innovation in the South.Why?There are several reasons.First, the more a Southern country makes it a matter of policy topromote renewable energy or climate-friendly technology generally,the harder it is for it to attract CDM projects. The more serious it isabout weaning its technological structure off fossil fuels, the harder itbecomes to prove that good projects would not have happened withoutthe CDM. 405The CDM, in other words, gives governments perverse incentives forchoosing the short-term benefit of CDM revenues aimed at plucking‘low-hanging fruit’ over the long-term benefits of environmental policypromoting climate-friendly technological change. For ex ample,high-level government bureaucrats in South Africa’s Department ofMines and Energy have admitted that they have faced pressure from