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

lessons unlearned 177Innovation, the Atmosphere and EconomicsBecause it allows the North to delayurgently-needed social and technologicalchange, every block of carbon credits fromthe South has a long-term climatic cost.Carbon accountants need to quantify such‘opportunity costs’ when adding up theeffects on the atmosphere of each carbonproject. Logically speaking, that’s a prerequisitefor accurately calculating howmany carbon credits a project should beallowed to sell.However, no CDM project validators orverifiers ever make such calculations. Noone has any idea how to figure out howmuch carbon a project will ‘lose’ by deprivinga company in the North of an immediateincentive to innovate. Nor is it possiblethey ever will, although in the long termthe amount could be enormous.This failure of the carbon ‘offset’ market isonly one example of the many paradoxeswhich result when conventional economicthinking is uncritically applied to issuessuch as climate change mitigation. As legalscholar Robin Paul Malloy explains, efficiencyanalysis ‘is incapable of adequatelyaddressing creativity because creativity isindeterminate.’ 404the private sector not to make renewable energy targets too stringent,for fear future CDM projects will not be able to prove they are betterthan what would have happened otherwise. 406Pressures for holding off on innovation are increased by the fact thatcredit buyers and consultant validators seeking future contracts haveincentives to postulate, and try to bring about, business-as-usual scenarioswhich are the highest-emitting possible, in order to make theprojects that they back appear to be saving as much carbon as possible.Second, some proposed CDM projects claim carbon credits simply forobeying the environmental laws of the host country. One example is aproposed project to divert the natural gas now being flared into the skyby Chevron, Shell and other corporations in Nigeria to a productiveuse. Flaring is already prohibited in Nigeria, and the companies havebeen paying a penalty for non-compliance. 408 Indeed, the NigerianHigh Court recently affirmed that flaring is illegal and unconstitutional.409 Another example is South African regulations that methane emissionsfrom landfills be captured once they reach a certain level. 410Proponents of carbon projects often claim that they help ensure thatenvironmental laws are obeyed. However, the prospect of carbon financegives both host countries and project proponents incentives forensuring that those laws – including those that create incentives forstructural change and innovation to lower emissions – are normally