The Kyoto Protocol
Neocolonialism and Fraud

by Larry Lohmann

first published 2 April 2002


The climate crisis is a political issue revolving around two things -- the overuse and the skewed use of the earth’s capacity to keep greenhouse gas proportions within the atmosphere within a certain range. The Kyoto Protocol so far fails to address either issue. Giving industrial corporations quasi-property rights over the atmosphere, it also, in practice, subsidises increased emissions. Far from being a small step forward, as it is usually presented, the Protocol is in fact a dangerous stumble sideways into an institutional morass of privatization, spurious science and the construction of a new carbo-industrial complex.




Like all environmental issues, the climate crisis is a political issue. It revolves around two things - the overuse and the skewed use of the earth's capacity to keep greenhouse gas proportions within the atmosphere within a certain range.

Industrial societies have long been transferring excessive amounts of carbon from underground deposits of coal and oil, where it is safely sealed off from the atmosphere, to the air. As a result, the percentage of greenhouse gases in the atmosphere is increasing every year. In simple terms, the earth's carbon dioxide dump is overflowing.

Part of the reason the dump is brimming over is that it is being shared so unequally. At present the US alone uses roughly all of the available dump. If it continues to do so, stabilizing the atmosphere's chemistry would mean none would be left over for the other 95% of the world's people.

The commonsense solution is both to reduce the use of the earth's greenhouse gas dump overall and to divide up the dump more equitably.

On the surface, it may seem that the 1997 Kyoto Protocol does both. The Protocol requires rich industrialized countries to start cutting emissions first - by about five per cent by 2008-2012 - while, for the time being, leaving Southern countries alone.

Yet appearances are deceiving. At the same time the Protocol targets the North for some small emissions cuts, it also quietly gives the North quasi-property rights over the atmosphere, leaving the South out in the cold.

Similarly, while on paper the Protocol seems to be mapping out greenhouse gas cuts, in practice it subsidizes increased emissions.

These are the real points of the Kyoto Protocol - and they remain unreported in the newspapers.

The Magic of the Market

What has gone wrong? Call it the magic of the market.

In 1997, through skilful politicking, US elites and their allies were able to insert special clauses in the Kyoto Protocol which allowed Northern countries to meet part of their emissions targets by trading carbon dioxide with each other.

The cover story was that this would make cutting emissions more efficient by allowing people who could overshoot their targets cheaply sell permits to emit carbon dioxide to people for whom cutting would be expensive.

What no one mentioned was that markets, in addition to promoting a certain kind of "efficiency", also presuppose a certain kind of property rights regime. You can't sell what you don't own. Kyoto's new "carbon market" awarded enormous quasi-property rights in the atmosphere to the North.

Suppose that (for example) Russia doesn't need all of the generous permits to use the world's carbon dioxide dump which it was granted in 1997. It can then sell the surplus to Europe or Japan, which (let's assume) are exceeding their allowed emissions. That means it owns that surplus. But who gave it those property rights over the world's carbon dioxide dump? Were people who use that dump in Venezuela or Vanuatu ever consulted?

Similarly, if Japan (say) finds that cutting its emissions by the six per cent it has promised is too difficult or expensive, it'll be able to buy cheap emissions permits from elsewhere to fill the gap. But it won't need to buy permits for the remaining 94 per cent. These it already has automatic "title" to, free of charge - at least until 2008.

Why were industrialized societies allowed such extensive rights in the world's carbon dioxide dump, while other countries which had made sparing historical use of the dump were given no rights whatsoever? The only possible answer is that industrialized countries were using a huge proportion of the dump already.

Ironically, this controversial conception of property was implicitly endorsed by all of the diplomats who signed the Kyoto Protocol - including those from countries which were granted no rights in the atmosphere, such as India, Ghana, Guyana and Tuvalu. If you grab a resource, then you own it. Might makes right.

No serious discussion of this wildly inegalitarian theory of property - or of any of the alternatives - took place at any time during the negotiations. In effect, most of the atmosphere has been given away free to rich corporations and governments while the world has been looking the other way.

The parallels with what is happening with human genes, water and biodiversity are obvious. Australian scholars Peter Drahos and John Braithwaite put their fingers on what is wrong with this "stealth privatization" in a forthcoming book on intellectual property:

"Lobbying in relation to property rights should take place under conditions of democratic bargaining. Democratic bargaining matters crucially to the definition of property rights because of the conseqences of property rules for all individuals within a society. Property rights confer authority over resources. When authority is granted to the few over resources on which the many depend, the few gain power over the goals of the many."

Nothing to Trade

The Kyoto Protocol's possessionist theory of property rights is only one of the unfortunate results of its market approach. The other is unsound science and the further subsidization of climate change.

Under the US/Kyoto climate scheme, you can buy permits to pollute not just from people who are reducing their emissions. You can also buy them from people who are planting trees, rearranging traffic signals, managing forests, or even burning more coal - provided that these people can show that these projects are resulting in fewer greenhouse gas emissions than "would otherwise be the case".

What Kyoto failed to mention is that this free and easy trading of smoke for trees or "hypothetical" emission reductions makes little scientific or economic sense. Kyoto's expanded "carbon market" has no commodity to trade.

The impossibilities of constructing Kyoto's composite "carbon commodity" are fourfold.

First, while it is possible to measure industrial greenhouse gas emissions, it is impossible, and will remain impossible, to measure present and future uptake of carbon dioxide by any segment of the biosphere with comparable accuracy and verifiability. Second, no consensus exists on who is responsible for carbon-saving practices such as conserving forests and halting the construction of coal-fired power plants. Third, no one can quantify the "carbon effects" of social actions (like eviction or changed investment behaviour) which result from tree-planting or energy efficiency projects. Fourth, no one is capable of specifying only one story line representing "what would have happened" in the absence of such projects.1

The fact that the "carbon value" of tree plantation or energy efficiency projects can't be specified means that the market will be quickly filled with bogus carbon emission permits. Ultimately, that means loss of confidence and the end of trading. The question is not whether the market will collapse, but when.

The market's demise has so far been delayed by the efforts of shoals of economists, UN bureaucrats, foresters, lawyers, development consultants and other experts and their institutions, who hope to create new billion-dollar empires out of constructing it.

But even in this atmosphere of cash-induced delirium, warning bells are ringing more and more loudly.

Tellus Institute economists notified the world in 2000 that Kyoto's Clean Development Mechanism is on course to serve primarily as a source of "free-rider" carbon credits for projects that would have been undertaken without the Protocol. The International Institute for Applied Systems Analysis recently released a series of studies proving that Kyoto's attempt to set up a quantifiable climatic equivalence between above- and below-ground carbon has made the treaty "completely unverifiable". And Environmental Data Services concluded in April 2002 that the UK's own fledgling internal carbon trading scheme was simply not environmentally credible, involving "potentially bogus emissions credits" and a "scandalous misuse of public funds".2

The longer the illusion that Kyoto's carbon market is possible remains, the more damage will be done to the climate.

Where are the Environmentalists?

Unfortunately, most environmentalist critics of the climate negotiations seem to have missed the point.

Environmentalists have been right to ridicule Kyoto's insignificant reduction targets. Shortly after the treaty was initialled in 1997, a scientific journal pointed out that 30 Kyotos would be needed just to stablilize atmospheric concentrations at twice the level they stood at at the time of the Industrial Revolution. At this rate, 300 years of negotiations would be required just to secure the commitments necessary by the end of this decade.

But the force of this criticism was lost when environmentalists hastened to add that "of course, Kyoto is a step in the right direction; we just need to move faster".

And today many environmentalists are still held captive by this metaphor of Kyoto as a constructive, hard-won (if tiny) step along a technical, clearly marked-out linear path.

This metaphor magically transforms the Kyoto Protocol into a basically sound structure with "imperfections" which can eventually be "reduced". It obscures the fact that Kyoto can be more accurately compared to a blind stumble sideways into an institutional morass of privatization, spurious science and the construction of a new carbo-industrial complex. The problem is not "imperfections" or "compromises", but a revolutionary restructuring of power in favour of the rich and of new technocracies which has so far been concealed from the public.

Similarly, when environmentalists comforted themselves that "at least carbon will now have a price", they were overlooking the resource seizures and fake science necessary for the setting of that price.

Another red herring for environmentalists has been George W. Bush's 2001 withdrawal from the climate negotiations.

In fact, whether the US is in or out at this point means little. By now, the Kyoto process has been engineered in a way that lets carbon-intensive industries reap huge benefits from the treaty whether or not the US decides in the end to support it formally.

Some environmentalists' last-ditch defense of Kyoto - that it "must be a step in the right direction because it makes so many fossil-fuel companies angry" - is just naive, an abdication of the responsibility to analyze.

Naturally, fossil-fuel corporations are still hoping to gain more from the Kyoto process than they have already. And they aren't so foolish as to state openly that they're satisfied with the compromises that their lobbying has effected so far.

But environmentalists should be politically savvy enough by now not to take their public statements at face value, nor use them as a perverse guide to action.

Notes and references

1 For substantiation see The Corner House, "Democracy or Carbocracy? Intellectual Corruption and the Future of the Climate Debate" Corner House Briefing No. 24, October 2001.

2 "Smoke and Mirrors on Emissions Trading", Environmental Data Services Report, London, 326, March 2002, pp. 2, 25-29.