London (U.K.) Observer  [Printer-friendly version]
January 23, 1999

FILL YOUR LUNGS -- IT'S ONLY BORROWED GRIME

By Gregory Palast

In May 1992, the Tennessee Valley Authority paid a Wisconsin power
company for the "rights" to belch several tons of sulphur dioxide into
the atmosphere, allowing the TVA to bust above contamination limits
set by law. Wisconsin cut its own polluting to offset Tennessee's.
This was the first ever trade in emissions credits, an experiment in
using market mechanisms to cut nationwide pollution overall.

Why should you care if Billy Hill is paying good money to suck soot?
Because trading rights to pollute, first tried on Tennessee, is the
cornerstone for implementing the Global Warming Treaty which will set
the rules for industrial production worldwide for the next three
decades.

The treaty, known as the Kyoto Protocol, aims to slash emissions of
"green house gases" which would otherwise fry the planet, melt the
polar caps and put Blackpool under several feet of water. (It will
also have negative effects.)

As you can imagine, industry's big lobbying guns have lined up against
the Protocol. From the US, leading the charge against the treaty is
Citizens for a Sound Economy, an ultra-right pressure group chaired by
corporate super-lobbyist Boyden Gray.

Squaring off against CSE is the influential Environmental Defense Fund
of Washington DC. So committed are EDF's greens to the treaty that
they set up a special affiliate to help implement the protocol's
trading system. EDF's new Environmental Resource Trust is chaired by
Boyden Gray.

Huh?

How did Gray, top gun of the anti-treaty forces and industry defender
become chief of a respected environmental group? Did he have a
deathbed conversion? No, Mr Gray's in fine health, thank you. Someone
far more cynical than me might suggest that Mr Gray and his polluting
clients, having failed to halt the clean-air treaty, have perfected a
new way to derail the environmental movement: If you can't beat 'em,
buy 'em. Covered in the sheep's clothing of a respected green
organization, polluters can influence the terms of treaty
implementation to make darn certain that they do not actually have to
change their dirt-making ways.

That's where the Tennessee model comes in. By insinuating into the
protocols a company's right to meet pollution targets by buying unused
emissions allotments, US industry can blow up the treaty from the
inside. Corporate lobbyists try to keep their fingerprints off the
filth-trading proposals. Fronting the scheme is left to the
Environmental Defense Fund. But the real muscle behind limitless use
of the contamination credits actually originated with the corporate
lobby Business Roundtable which, embarrassingly, left a memo to that
effect in a photocopy machine in November at the Buenos Aires round of
talks Activists made it public with much glee.

Other than the plain creepiness of selling rights to pollute, what is
wrong with such trades if they painlessly cut emissions overall? Well,
keep your eye on that "if." I haven't yet found a single trade that
took an ounce of pollution out of the atmosphere. The free-market fix
for dirty air was rotten from the first deal. In the 1992 Tennessee
case, the Wisconsin company that sold its right to spew SOx could
never have received state authority to build another polluting power
plant. The seller's reduction in pollution was a sham, but the
additional spume of poison into Tennessee mountains was real and
deadly.

Despite this sorry record, US negotiators pushed emissions trading as
a take- it-or-leave-it condition of America's participation in the
treaty. Tony Blair, hearing the words "voluntary and incentive-based,"
could barely contain his enthusiasm. Emissions trading, as a so-called
"market mechanism" for saving the biosphere, is the pride and joy of
the Third Way, the means by which New Democrats and New Labour hope to
replace those nasty old rule-by- command laws -- 'THOU SHALT NOT
POLLUTE' -- with efficient, retail transactions, possibly at your local
TOXINS R US. (The US already has a "stock exchange" where 15 million
tons of sulphur dioxide trade each year.)

Under US treaty proposals, any US or European manufacturer who wants
to crank up their Earth-baking discharges will have to buy up rights
from a green- minded company which has cut emissions. But where in the
world will they find earth-friendly industries willing to sell their
rights to pollute? You'll never guess: Russia and Ukraine. In case you
were on holiday when Russia became an eco-paradise, I'll fill you in.
The treaty's rights to pollute are allocated based on air trash pumped
out in 1990. Up to that date, Russians under Communist rule were
forced to work in grimy, choking factories. Now they are free not to
work at all. Russia's industrial depression has cut their emissions by
30%. Thus, the bright side of the impending starvation on the Steppes
is that it could generate enough credits to eliminate 90% of US
industries' assigned reduction in pollution.

Is anyone fooled? Did America's tree-hugging Vice-President Al Gore
jump up and holler, Fraud! Not a chance. To corporate applause, the VP
has blessed the bogus trading in filth credits. To protect his green
credentials, Gore has held had plenty of photo ops surrounded by
recognized environmentalists, i.e. from the Environmental Defense
Fund.

It gets worse. The Clinton Administration has just announced a scheme
to give "early credits" to US companies which cut emission before the
treaty takes effect. If a chemical company shuts a plant to bust its
trade union, for example, they get credits. A dozen top environmental
groups are up in arms about this windfall for phantom reductions in
pollution -- but not EDF, which takes pride in crafting the proposal's
details.

How did EDF come up with this bizarre idea? A reliable birdie has
faxed to the Observer copies of internal documents from the EDF unit
chaired by Boyden Gray. These state that, "most of the major utilities
have been regularly meeting with EDF staff to discuss this concept" -
and they would pay EDF fees for creating the early-credits market. An
EDF staffer admitted that the plan was drafted with Southern Company
and American Electric Power, notorious polluters, "looking over our
shoulders."

The sale of crud credits has chopped the legs off anti-pollution laws
in the States; and now it will be used to sabotage the Global Warming
Treaty. We know the attractions of the filth trade to government: it
is the ugly stepchild of the new mania to replace regulation with
schemes that pose as "market" solutions. It provides a pretense of
action to the public while giving winking assurance to industry that
the status quo is not disturbed. Marketing-not-governing schemes
spread like Tennessee kudzu. Don't be surprised when General Pinochet
claims to have purchased unused bone-cracking rights from Pol Pot.

But what attracts environmentalists to these schemes? Why do some
enviros appear to act like Rent-A-Greens for Boyden Gray and
corporations they once blasted? It is not venality. Rather, genteel
alliance with industry is the ticket that lets them hang out with Gore
and the Big Boys in the deal-making loop. Unfortunately, the
collaborationists have confused proximity with influence. As one old-
style activist put it, gimmickry will never replace guts in the battle
against ascendent commercial authority.