By Joan Martinez-Alier and Leah Temper
Joan Martínez-Alier is president of the International Society for Ecological Economics. Leah Temper is a doctoral student at the Autonomous University of Barcelona.
Kyoto has failed. Despite so many admonitions from the IPCC, the reality is that emissions of carbon dioxide in the world are going up by over 3 per cent per year. This is the failure of the countries that signed up to Kyoto, and even more so, of those like the United States who stayed outside the timid Kyoto framework, and also of those not included in Annex I of the Rio de Janeiro treaty of 1992.
The world is currently burning about 85 million barrels of oil per day. As we approach peak-oil (at 90 mbd? 100 mbd?), the price of oil goes up and up despite the efforts to get more of it by means foul or fair as in Iraq, in the Niger Delta, in Amazon and other “commodity frontiers”. In Canada, rocketing oil prices have finally made exploitation of the Alberta oil sands profitable, whereby one barrel of oil equivalent is needed to produce 3-5 barrels of oil. The Hubbert curve is named after the geologist who 60 years ago predicted that the United States peak-oil would take place in the early 1970s. The road down the Hubbert curve will be terrible. Downhill will be harder than uphill.
The price of oil is followed by the price of natural gas. There are also conflicts around the world on gas extraction, like in Bolivia a few years ago where the gas contracts cost some dozens of human lives and a change of president, and in Burma where Unocal infringed human rights when building a gas pipeline to Thailand. The juggernaut goes on, trampling indigenous peoples and biodiversity under its wheels.
Oil and gas prices are still too cheap, in the sense that neither local damages (“externalities” if you wish), nor their effects on climate change, are included. But their prices are rising rapidly because peak-oil and later peak-gas are fast approaching. Peak oil refers to the maximum output of barrels produced in the world, after which time extraction will decrease while potential demand will still rise. Another effect of peak oil is that more and more energy is needed to pump the remaining oil out of the ground, what is referred to as EROI (energy return on energy input.)
In contrast, the supplies of coal are plentiful, and there is no OPEC of coal to restrict supply. Therefore the first half of the 21st century is likely to be an era of coal. Already in the 20th century the use of coal increased by a factor of six. The world’s fastest growing economies, China and India, are fuelling their industrialization with cheap, readily available coal, counteracting reductions in energy intensity elsewhere. The trouble is that coal is socially and environmentally a very dirty business, whether procured by underground or open cast mining. Coal usually contains sulfur, which causes acid rain. Per unit of energy delivered, coal produces considerably more carbon dioxide than oil or gas. Nevertheless, the fear of emissions caps has not deterred a boom in the construction of coal-fired power plants, even in “progressive” European countries, with Romanian and Bulgarian massive coal deposits a growing supply source.
While the technology for capturing some carbon emissions from coal and storing them underground is becoming available at a cost, current prices for carbon emissions on the European market provide no incentive to do so. It is simply cheaper to pollute now and pay it off later. Or rather to pollute in Europe and then invest in a tree plantation or other CDM project in the developing world. Because of this trend, human-produced carbon dioxide emissions in the world keep increasing in a trajectory that means that a concentration of 450 ppm would be reached in little more than thirty years, while according to the IPCC emissions should come down by 60 per cent in the next few decades.
History of climate change
The intellectual history of the enhanced greenhouse effect is not yet common knowledge. It begins at least over one hundred year ago, when Svante Arrhenius from Sweden, a Nobel prize winner in chemistry, published some calculations on the effects on temperature of doubling, or tripling, the contents of carbon dioxide in the atmosphere, with results very close to the present ones. In 1938, electrical engineer G.C. Callendar published an article  explaining that the combustion of coal would produce a slight increase in temperatures on the globe. According to him, there was nothing to worry about. Everybody knew that burning coal was good for the economy and human well-being, and the increase in temperature was also good because it would extend the margin of cultivation to the North.
Twenty years later, at the end of the 1950s, Roger Revelle, protagonist of Alan Gore’s film, and other scientists, sounded a cry of alarm. Systematic measurements of carbon dioxide concentrations in the atmosphere were made. In the late 1980s, the International Panel for Climate Change began to get going.
This intellectual history is interesting for it own sake (late lessons from early warnings) but also because it bears on the historical responsibility for climate change that falls on the industrial counties. Should the responsibility go back to 1992 and the Rio de Janeiro treaty? Should it go back to 1960, or even further back?
Oil policies from the South: the OPEC eco-tax?
The new industrialized countries such as China and India do not want to talk about climate change. When they do, they argue that they should have the same opportunity to grow as the West did. On their side, the oil exporting countries (as well as the coal exporting countries, such as Colombia in Latin America), did not want to hear about the enhanced greenhouse effect. The curb or the cap on emissions, if it ever came, would mean lowering the demand for fossil fuels. Already in 1992 Saudi Arabia started to complain that they would claim compensation against those who were ready to spoil the oil market by unproven alarms about climate change. Today the official position of OPEC remains the same, only slightly modified of late by proposing to constitute a fund to subsidize research on carbon “sequestration” technologies.
Therefore, it is all the more remarkable that at the OPEC meeting in Riyadh on 18 November 2007, president Rafael Correa of Ecuador, aware of a speech by Herman Daly made in 2001 in Vienna to the leaders of the cartel , proposed a new eco-tax on oil exports by OPEP countries with the explicit aim of lowering a little the demand for oil in order to diminish carbon dioxide emissions. The proceeds from the tax (the Daly-Correa tax?) should go for poverty-reduction (including energy-poverty reduction), and for alternative energies (meaning geothermal, wind and solar, and not, let us hope, agro-fuels or civil-military nuclear proliferation). Correa stated that the tax could be of 3 per cent of the price of oil, for starts.
There is in this proposal an element of economic justice (many rich countries put heavy taxes on imported oil and gas, against the exporting countries). There is also an element of climate justice, based on a new awareness (among at least one of the smallest OPEC members) of the realities of the enhanced greenhouse effect, and the international distribution of its causes and effects. Such realities are apparent in Ecuador with glaciers in the Andes losing ice cover, and future sea-rise threatening Guayaquil.
Other voices from the south ask in Bali for recognition of the Ecological Debts or the Environmental Liabilities owed from North to South. There is a public and a private aspect to this.
First, countries which historically have produced and continue to produce more carbon dioxide per capita than the rest have a “carbon debt.” Jyoti Parikh, a previous member of the UN International Panel on Climate Change argued in 1995 that the average global emissions were about one ton per person per year. Industrialized countries produced three-fourths of these emissions, instead of the one-fourth that would have corresponded to them on the basis of population. The difference was 50% of total emissions, some 3000 million tons at the time. Contemplating the increasing marginal cost of reduction, the first 1000 million tons maybe could be reduced at a cost of, say, $15 per ton, but then the cost would increase very much. Taking an average of $25, then a total annual subsidy of $75 billion was forthcoming from South to North.
The North has occupied the sinks (such as the oceans) and the atmosphere as a temporary deposit. They are debtors and they should pay, as Anil Agarwal and Sunita Narain from the Centre for Science and Environment of Delhi argued already in 1991 making the case for equal per capita emissions allowances.
Second, from the point of view of corporate accountability, many oil companies have done terrible damage to the local inhabitants and to other forms of life in the name of profit. Again, Ecuador provides some lessons. The court proceedings against Texaco (now Chevron-Texaco) that started in New York under the Alien Tort Claims Act in 1993 are now reaching a conclusion in a court in Lago Agrio, an oil-polluted township in Sucumbios province. There might be an agreement out of court. The damages (because of oil spills, gas burning, over 600 pools of polluted extraction water and the resultant cancer cases, extinct tribes, and lost biodiversity) are now being quantified in money terms because this is the nature of the court case (a civil suit for damages and not a criminal case).
The damages caused by Texaco between 1970 and 1990 in terms of lost human health, the destruction of local indigenous groups, soil and water polluted and loss of biodiversity, are huge. Texaco made a conscious decision not to re-inject the water, standard practice in the US at the time, nor to line the waste pits. These damages could be estimated in terms of saved costs, or in terms of the economic value of human suffering and nature spoiled. A claim for about 6 billion dollars has often been mentioned. The present value of this sum (at a rate of interest of only 5 per cent, and taking also into account the loss of purchasing power of the dollar in the last twenty or thirty years) would exceed 20 billion dollars.
The lesson from Lago Agrio is that oil, coal, gas companies can no longer get away with not paying for their social and environmental liabilities, even when they are operating in places where human life is cheap and the destruction of Nature is not carried into the bottom line of the profit-and-loss account. Since 1993, it has been civil society, through its organizations and support groups in Ecuador and abroad that has pushed the case.
The Yasuni ITT proposal
Finally, another innovative oil policy coming from civil society is the ITT Yasuni proposal, also in Ecuador. The idea was first expressed in the Oilwatch position paper in Kyoto in 1997: keeping fossil fuels in the ground deserves “carbon credits”. Thus, in the Ishpingo-Tambococha-Tiputini field in the Yasuni National Park, about 920 million barrels of heavy oil would remain in the ground in perpetuity or in a moratorium sine die, in an area inhabited by indigenous groups, some living in voluntary isolation, and that holds unique biodiversity.
An ancillary benefit of keeping this oil in the ground (apart from respecting Nature and human rights), is that the carbon dioxide that would be produced when burning the oil elsewhere, is “repressed” underground. The avoided emissions of carbon dioxide are of the order of 410 million tons from the oil, plus some more from the avoided deforestation.
Ecuador is asking for a part of the money from outside in recognition of its foregone monetary revenue. At present, there is strong support inside the government of Ecuador for this project, which was launched by the then Minister of Energy, Alberto Acosta, early in 2007. Acosta is now the president of the Assembly that is writing the new Constitution: Acosta has stated that the ITT region and other natural parks should be declared out of bounds for the oil industry. Support from President Rafael Correa is not firm because he is if by training a development economist with anti-environmental inclinations.
This project, if successful, could be copied elsewhere – for instance in U’Wa territory in Colombia, in the Niger Delta, in some of the worse coal mines in the world… In fact, in the Niger Delta, the Ogoni and Ijaw activists have often pointed out the inconsistency between all the international rhetoric on “saving the world’s climate” and the local reality of oil extraction and gas burning at the cost of so many human lives. Shell has never been held accountable for the damage done and the death of Ken Saro-Wiwa and his comrades in 1995. At present Shell continues to flare gas despite new laws prohibiting the practice.
As the Bali meeting takes place, there are new voices from the South that are clamouring to make themselves heard. They are demanding justice and refusing the alms offered by the North in the form of so-called flexibility mechanisms and “adaptation loans” which transform the polluter pays principle into the “polluted adapt” principle. After nearly twenty years of ineffectual climate change politics dominated by the North, Bali too is doomed to failure if it does not listen to the polluted.
 Herman Daly, Sustainable Development and OPEC, in Ecological Economics and Sustainable Development. Edward Elgar, Cheltenham, 2007. Parikh, J.K. (1995), ‘Joint Implementation and the North and South Cooperation for Climate Change, International Environmental Affairs, 7, 1