Rogue traders could save Kyoto

Carbon traders do not easily secure sympathy. Yet their role is vital.

Shed a tear for the carbon traders. At a Point Carbon trading conference in Amsterdam earlier this month, the air of despondency was more than palpable, it was physical. At the session I chaired, delegates sat slumped in their seats. There were few questions. Everyone I spoke to felt the same way. Copenhagen was a disaster. No one knew where things were headed now. Some were considering new careers.

Carbon traders do not easily secure sympathy. Many are well-off; they show no particular interest in saving the planet. Yet their role is vital. Via the markets they operate, they have put a cost on our use of the atmosphere as a carbon-dioxide dumping ground, "as if", as Al Gore puts it, "it were an open sewer".

Economists, politicians and campaigners all agree that putting a price on carbon is necessary to make the shift to a low-carbon economy real. As a result, non-fossil alternatives such as wind and solar become cheaper by comparison, and the worst polluters such as coal become relatively more expensive. With no price on carbon, dumping CO2 in the atmosphere is free. The big polluters, whether Peabody Energy or Exxon Mobil, are able to make billions because the cost to the environment of their products is borne by the rest of us. Price carbon properly and the fossil fuel behemoths can begin to pay us back.

Kyoto, for all its failings, began to weave this price signal through global commerce, and not just in the industrialised countries that took on its targets. In China and India, the Clean Development Mechanism (CDM) has become huge business - worth $6.5bn in 2008. It has driven millions of dollars' worth of clean investments into developing countries which otherwise have no incentive not to burn fossil fuels.

But the CDM appears doomed unless a new period of the Kyoto Protocol is negotiated to replace the current one when it runs out in 2012. But a new lease of life for Kyoto gets less likely by the day. The US pulled out under George W Bush, and will never rejoin - "Kyoto" is politically toxic in Washington. Canada, thanks in part to its tar sands oil extraction operations, is miles over its target, and seems not to care.

Even the EU, once the bedrock of Kyoto support, has gone cold. The main cheerleading now comes from the developing world, particularly China and India. But this is politics, too - China supports Kyoto because it divides the world into rich and poor. China is considered poor, so is exempted from targets and can go on building coal-fired power stations at a breakneck pace.The carbon trade is also important as it might have helped protect the world's tropical forests from the loggers, plantation owners and cattle ranchers who threaten their survival. With no price on carbon, there is no price on forests either - and their value as dead timber or cleared land will remain far higher than their value as irreplaceable stores of biodiversity and living carbon.

But the real reason for the latest bout of depression is not China, nor forests - but the US. Unless President Obama can find some way to force climate legislation through the Senate, the $2trn potential US carbon market will never materialise. Emitting carbon will continue to be free to American companies, weakening any argument for tougher regulation in India and China. All in all, the prospects currently look great if you are Exxon Mobil or Peabody Energy. And that is bad news for the rest of us.

This piece also appears in this week's issue of the New Statesman

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Mark Lynas has is an environmental activist and a climate change specialist. His books on the subject include High Tide: News from a warming world and Six Degree: Our future on a hotter planet.

This article first appeared in the 15 March 2010 issue of the New Statesman, Falklands II

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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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