In June 2011, Climate Policy published a review by Axel Michaelowa on the book “Upsetting the offset: the political economy of carbon markets” (vol 11/1). The book’s co-editors, Steffen Bohm and Siddharta Dabhi (vol 11/6), were quick to submit a spirited rejoinder. The lively exchange continued with an invited contribution from Peter Newell, providing his thoughtful perspective on the two “sides” (vol 12/1).
Interested? Track the thread of discussion so far by following the links below (all articles are FREE). Then come back HERE to post your own comment!
- Book review: Failures of global carbon markets and CDM? by Axel Michaelowa
- Commentary 1: Fault lines in climate policy: what role for carbon markets? by Steffen Böhm and S Dhabi
- Commentary 2: The political economy of carbon markets: The CDM and other stories by Peter Newell
climatepolicyjournal.org 
The underlying motivation of the authors (contributors) of “Upsetting the Offset” is highlighted on p. 250 in Matt Paterson’s Chapter 22 ‘Resistance Makes Carbon Markets’:
“For many involved in opposing carbon markets, the point is to get rid of them, not make them work better. We are thus in the awkward position of shaping the form of something we may prefer didn’t exist”.
If this is in fact the underlying agenda of the book’s authors, it is highly unlikely that any market based approach will be acceptable, which has the unfortunate consequence of limiting options to effectively tackle climate change at the scale required from this challenge, and sadly provides cannon fodder to the denier community.
Continuing the dialogue on “Upsetting the Offset” I submit the following thoughts. First, the paternalistic and condescending underpinning of the “cases” is troubling. It is important to understand that participation in CDM is voluntary for all non-Annex I countries and the CDM allows non-Annex I countries to determine what “sustainable development” means to their country. Therefore stating projects that received letters of approval and local authorisation do not support “sustainable development”, is an indictment of the local governance structure, not CDM. This approaches intellectual colonialism as it implies the North’s definition of sustainable development is superior to that of CDM host countries.
Second, the books framing of “how the scam of carbon markets affects the lives of communities” is a convenient argument to make from the North but potentially very dangerous to the health and livelihoods of the poorest households that can greatly benefit from the carbon markets to provide efficient, culturally appropriate cookstoves, solar lighting and water filters, to name a few. Peter Newell points out in his response, there is significant scope for ‘poorer countries’ to greatly benefit from household energy and renewable energy projects and CDM currently offers one of the few viable option for financing to bring these programmes to the required scale, particularly in Africa. Considering this, a more balanced view that identifies both abuses and benefits of CDM would be more convincing and useful.
Lastly, the alternatives offered by the book are not viable. The ecological debt argument, lacks a practical basis as even if there was the political will, how would one operationalise? The devil is in the details, and unfortunately this argument does not address how something like this would work. For the past 60 years ODA has provided vast amounts of funding with few tangible results, what is the operational basis for this ecological debt payments to developing countries with limited statehood? Cullet discusses the “common but differentiated responsibilities” principle underlying the climate change regime, based on results, has the time not come to analyze if this principle, not CDM, is not the primary delaying tactic being employed by most OECD countries? Maxey and Dale’s argument propels the “North knows best” mindset with the theme of “sustainability being led from the grassroots which has emerged from the UK and is blossoming around the world”. In a similar manner, Hannis’ article has no discernable link to developing countries or CDM so I struggle to understand its relevance to this debate. Finally, Land’s advocacy of “bicycology” also offers a narrow view of development with no grounding to the developing world context. I find these “alternatives” insufficient to the task of immediately addressing the poverty-environment nexus in developing countries, which is the most direct route to simultaneously address climate change and development in a sustainable manner.
Considering the complexity of the climate change problem, we need to attack the problem with an effort commensurate to the challenge. Well-thought out independent research into how the carbon market and the CDM fails is important and necessary to better understand if market incentives can play a role in transforming the development paradigm toward a more sustainable pathway.