Spotlight Durban: Durban’s Climate Zombie Tripped by Dying Carbon Markets

Looking back now that the dust has settled, South Africa’s COP17 presidency appears disastrous. This was confirmed not only by Durban’s delayed, diplomatically-decrepit denouement, but by plummeting carbon markets in the days immediately following the conference’s ignoble end last Sunday.

Of course it is tempting to ignore the stench of failure and declare Durban “an outstanding success,” as did South African environment minister Edna Molewa. “We have significantly strengthened the international adaptation agenda,” she explained about the near-empty Green Climate Fund. “The design of the fund includes innovative mechanisms for bringing private sector and market mechanisms into play to increase the potential flow of funding into climate change responses.”

Because the $100 billion promised by Hillary Clinton in Copenhagen two years ago is apparently fictional (aside from minor commitments by South Korea, Germany and Denmark), Molewa’s two crucial albeit unintended words are ‘play’ and ‘potential.’ In our new book, Durban’s Climate Gamble: Trading Carbon, Betting the Earth, critical researchers show why emissions markets are as comatose as the Kyoto Protocol. Only a casino drunkard would put money – much less the planet – on the odds of a death-bed resurrection.

Bolivia’s former UN ambassador Pablo Solon scolded the hosts for turning Kyoto into a “Zombie, a soulless undead.” The 1997 treaty’s soul was a commitment that emissions cuts would be binding, but several of the richest polluting countries – the US, Canada, Japan, Russia, Australia and New Zealand – won’t sign on the second commitment period. To sabotage Kyoto, Washington continues its voluntary ‘pledge and review’ policy pantomime. Kyoto’s original brain contained a species survival mechanism: a pledge to keep the earth’s temperature at a livable level. Now, the Durban Platform contains “less than half of the necessary cuts to keep the temperature increase below 2°C,” says Solon.

As the soul-deprived, brain-dead, heartless climate-policy Zombie stumbled off the Durban Platform last week in the direction of Qatar for the COP18 next year, it immediately tripped on the crumpled carbon markets. The emissions trade is failing not only in Europe but also in our own Durban backyard. An Africa Report investigation unveiled South Africa’s highest-profile pilot Clean Development Mechanism (CDM) project as a scam.

At Bisasar Road landfill in the Clare Estate neighbourhood, the R100+ million methane-to-electricity CDM project was despised because it kept the continent’s largest official dump open far beyond the point it should have been closed. Instead of being burned and flared on-site, methane gas from Bisasar’s rotting rubbish should have been piped out for industrial use, far away from residential areas, according to the late community activist Sajida Khan. Before dying of cancer caused by the dump in 2007, she tirelessly campaigned to close Bisasar dump and thus end one of Africa’s most notorious cases of environmental racism.

Khan failed, because in 2001 the World Bank promised funding for methane extraction that would keep the dump operational. The crucial factor, according to Durban officials, is that “Landfill gas offers a viable renewable energy source only when linked to carbon finance or CDM.”

Based on the assumption that without outside funds, the project could not be justified, in 2006 the United Nations listed Bisasar Road as an active supplier of CDM credits through at least 2014. It turns out this was a fib. On an official tour of Bisasar on November 30, journalists from Africa Report and San Francisco-based Pacifica News interviewed Durban Solid Waste manager John Parkin, who admitted, “We started the project prior to the CDM. We were already down the road. It just made it come faster because the funding was there.”

Why is this scandalous? Africa Report interprets: “It is questionable as to whether the project should have been approved as a CDM initiative at all, as approval requires the existence of ‘additionality’. According to the UN, ‘Additionality is the cornerstone of any credible CDM project, basically answering the question whether a project is additional, or would it proceed anyway, without the CDM.’ That is, without qualification as an additionality, the CDM shouldn’t be approved.”

Parkin confirmed to the journalists, “We already started the project and we were going ahead no matter what. So whether CDM became a reality or not, the project was going to go ahead.”

Such a whimsical approach to climate finance is why hopes by Molewa and Manuel for filling the Green Climate Fund with carbon trade revenues will be dashed. CDM trading volumes are down 80 percent from their 2007 peak, and the European Union’s carbon futures market – once above €35/tonne – hovered between €11-14/tonne through 2010-11 but crashed to €4.4/tonne on December 13.

Remarked Susanna Twidale of the Point Carbon news service, “While a lot of the focus of the last fortnight of UN meetings was on supply of carbon credits, not one country deepened its carbon target, leaving international carbon offset prices languishing at near record lows.” Reuters news service confirmed, “Carbon markets are still on life support”, quoting a leading trader: “A sick market needs a cure and instead of deciding which cure to use, the doctors keep using pain relief to gain more time to make the final prognosis.”

Back in Durban, 20,000 carbon credits are being issued from the Bisasar Road CDM each month. According to Parkin, “We don’t have a partner to buy them at the moment. But we’ll probably get €8 to €9 if we’re lucky.” Durban is unlucky to have Parkin gambling with city finances, the air in Clare Estate, and the planet’s health.

What the late Vaclav Havel said once about Soviet-era politics – “a monstrous, ramshackle, stinking machine” whose worst legacy was a “spoiled moral environment” – applies equally to Bisasar Road, to the UN’s Conference of Polluters and to those who departed Durban without hanging their heads in shame. All they have to show for their work, during this planetary emergency, is creation of a dangerous Zombie.

In this milieu, Parkin was brutally frank, at least: “As the City, if we can make some money out of it, I don’t see why it shouldn’t be done and the whole moral issue is separate from the project. The project is successful. The moral issue, I have no influence on that – as a technocrat, I do my job.”