Putting a price on fresh air

Is undue influence being exerted on the government by what former trade and industry director general Zav Rustomjee has called the “minerals-energy omplex” — big mining houses, minerals smelters, petrochemical firms and Eskom?

The case of global warming is instructive, particularly in the wake of Pretoria’s October 2004 climate- change policy, which promotes World Bank-designed “carbon trading”. That approach endorses the idea of the right to pollute as a property right granted free to big business, which can then trade in pollution rather than reducing industrialised country emissions.

There are two troubling consequences. Instead of reducing their carbon emissions, local mining and minerals firms will continue to be recipients of vast state subsidies, especially low-priced Eskom electricity, along with public infrastructure investments, like those envisaged for the proposed Coega aluminum smelter.

In addition, the carbon-trading strategy to address global warming could exacerbate other environmental problems in centres like Durban.

This is diabolical, because energy-intensive mega-projects create very few jobs, and the bulk of their profits flow to beneficiary firms’ financial headquarters in London and Sydney. They also churn out carbon dioxide at one of the highest rates in the world, making South Africa today 20 times more C02-intensive per unit of per capita gross domestic product than even the United States.

If the toothless Kyoto Protocol is ever strengthened, countries like China, India and especially South Africa will have to play rapid catch-up on emissions reductions. Yet subsidised mega-projects are making Pretoria’s transition into a responsible world energy consumer all the harder.

The fact is that an international carbon trading system is simply not feasible, despite government and business arguments reported by Janet Wilhelm (“Profits from fresh air”, December 10 2004). Emissions trading equates two processes, which are scientifically untenable, permitting C02 emissions to be mitigated by credits for carbon “sequestration” (absorbing carbon through “sinks” such as timber plantations), “avoided emissions” or “emissions reductions”.

This not only means allocating big minerals-energy firms free emissions rights. In turn, the same firms will gain greater access to — and with it, the ability to turn to commodities — air, land, water, timber and other goods.

To illustrate — one high-profile pilot carbon trading project in Brazil proposes planting eucalyptus plantations as a carbon sink. Besides the fact that plantations are not permanent carbon stores, there is huge uncertainty about how the biotic cycles can stabilise carbon released from fossil fuels.

In any case, about 25% of the increase in atmospheric CO2 over the past 250 years is a result of the destruction of forests. If anything, indigenous forests, not alien timber plantations, should be re-established and protected as part of climate-change mitigation.


The “green deserts” of eucalyptus trees favoured by carbon traders cause destruction of soil structure and release of soil carbon, displacement of people, loss of biodiversity and serious disruption of water systems.

When these trees are old enough, they are felled and turned into charcoal for the steel-smelting industry, and the firm receives additional carbon credits for replacing mineral coal. Ironically, this process feeds the production of Brazilian cars, which worsens global warming.

In South Africa, the World Bank’s primary emissions trading pilot is the controversial Bisaser Road dump in Durban’s Clare Estate neighbourhood.

The dump emits methane, which can be captured and turned into small amounts of electricity to augment the eThekwini metro’s supply. But the electricity produced costs more than double the rate that Eskom charges, so the project is not economically feasible without World Bank subsidies.

Carl Albrecht, research director at the Cancer Association of South Africa, likens Clare Estate residents to “animals involved in a biological experiment”. According to cancer victim Sajida Khan, 70% of neighbouring households have tumour cases, not to mention severe respiratory problems.

However, eThekwini intends making money off the dump when a $25-million World Bank investment begins this year. By not factoring in Khan and her community’s health crisis, the Bank termed the dump “environmentally friendly” in 2002.

Because of past broken promises, Khan does not believe the metro council’s vaguely worded November 2004 decision to close the facility.

The World Bank’s Prototype Carbon Fund manages money from 17 corporations and several carbon-intensive Western governments. Because of investments such as Bisaser Road, these polluters will face reduced pressure to cut emissions. South Africa is thus a willing co-conspirator in a farcical failure to confront the worst environmental disaster our descendants are likely to face.

Numerous alternatives exist, if governments and international agencies were serious about global warming: regulation, taxation, support for existing low-fossil-carbon economies, energy efficiencies, development of renewables and non-fossil-fuelled technologies, responsible tree planting, and other strategies that do not involve commerce and do not presuppose that big business already owns the world’s carbon-cycling capacity.

These alternatives should be supported by leaders like Minister of Minerals and Energy Phumzile Mlambo-Ngcuka. In addition to a rethink on carbon trading, Pretoria should end subsidies for continued exploration, extraction, exploitation and burning of fossil fuels, and urgently begin to make deep cuts in carbon emissions.

It should respect — not attack — as Mlambo-Ngcuka did last February — the World Bank’s 2004 Extractive Industries Review, which advised the bank to cease its fossil-fuel investments. The bank rejected the advice last August.

However, because minerals-energy-complex corporations and the World Bank have set the agenda, South Africa will probably become a leading guinea pig for the privatisation of the air.

Patrick Bond is professor of development studies at the University of KwaZulu-Natal. Rehana Dada is an environmental journalist

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