DASH FOR CASH’: INDUSTRY LOBBYISTS AT THE CLIMATE TALKS Powerful industrial lobby groups are attempting to undermine ratification and implementation of the 1997 Kyoto Protocol, which committed industrialized nations to reduce their greenhouse gas emissions. Several of these industry groups will be represented during top level talks under the Framework Convention on Climate Change in Bonn from Oct 26 to Nov 4. At this meeting more details of the Kyoto Protocol will be negotiated. (The Kyoto Protocol was agreed by more than 160 nations in Japan in 1997, it established legally binding greenhouse gas reduction targets for each industrialized nation, with an overall reduction of –5.2% by 2008-2012).
The most controversial agenda topic at the negotiations (formally known as the fifth ‘Conference of the Parties’ – COP5) is the detail of how the Kyoto Protocol’s so-called ‘flexibility mechanisms’ will work: carbon trading, joint implementation (JI) and the clean development mechanism (CDM). These are tools that aim to start an international market in buying and selling carbon reductions, and could allow industrialized nations to implement projects to reduce emissions in developing countries and claim credit for doing so. Countries have said they will reach agreement on the details of how these, and other topics, will work by the sixth COP in late 2000.
As the negotiations have become more complex, and are now discussing commercial and trading activities, more and more industry lobbyists are attending the meetings. While some groups and companies remain overtly opposed to the Kyoto Protocol and its ratification, others increasingly focus on the details of its implementation. One delegate described proceedings as a ‘Dash for Cash’ as companies stake out how they can get a saleable ‘carbon credit’ from their commercial activities. This is fine in principle if it means a more rapid shift away from fossil fuels and stimulates a faster uptake of non-polluting renewable energy, however many of the traditional fossil fuel industries are set on ensuring that the market is set up so that carbon awards go their own business-as-usual activities. For example:
Some oil companies are hoping to claim carbon credits for implementing long-overdue ‘business as usual’ practices such as reduction of gas flaring, in developing countries;
The coal industry wants to expand the market for ‘clean coal’ or slightly more efficient coal-fired power stations into the south, and get credits for doing so ;
The nuclear industry’s rapidly expanding attendance at these meetings is all about trying to sell itself as a solution and also get credits as a carbon-free fuel.
Greenpeace believes that activities or projects involving coal, nuclear energy or the wider use of forestry offsets (‘sinks’ – planting trees rather than reducing fossil fuels directly) should not be eligible for credit under Joint Implementation or Clean Development Mechanism.
If governments award credits to business-as-usual activities they effectively reward those polluting, and reduce the incentive to shift the world’s energy investment pathway away from fossil fuels, the major source of greenhouse gas emissions. Reward and credit should go to projects which stimulate uncontroversial, permanent solutions like energy efficiency and renewable energy. Below is a short summary of the changing nature of the industrial lobby at the negotiations and some of the groups involved. A summary of industry events at COP5 is appended.
As the negotiations get more complex, Greenpeace believes it is relevant to differentiate business organisations or companies on the following grounds
Support for early ratification and implementation of the Kyoto Protocol
- not conditional on US ratification
- not conditional on unlimited use of the flexibility mechanisms
- not conditional on unlimited implementation of sinks as a substitute for starting a steady reduction in fossil fuel dependence. In Greenpeace’s view the industry support for voluntary agreements or unlimited/unrestricted flexibility mechanisms internationally is one attempt to prevent Annex I (industrialized country) parties from implementing a strong domestic package to cut greenhouse gas emissions. Official statistics presented at COP4 showed only seven Annex I (industrialized countries) parties on track to bring emissions below 1990 levels by 2000. These parties accounted for only around 16% of Annex I emissions.
Short outline of positions of some of the well-known industry lobby groups (traditional industries, nuclear industries and progressive industries). At the end is a summary list of industry side-events during COP5.
Traditional Industry Organisations American Petroleum Institute (API): www.api.org
Main US oil and gas industry lobby, BP and Shell are still members (API is also a member of GCC below). Four months after Kyoto, leaked documents showed that the group was planning a $6million media and outreach campaign to deliberately undermine climate science and bring new climate sceptics into the debate in the lead-up to COP4, Nov 1998.
Position: opposes ratification of a protocol. Says Kyoto ‘would impose enormous costs of Americans personally and significantly harm the US economy’ and that it lacks a scientifically credible base. Supports voluntary flexible measures. Wants the ‘additionality’ criteria removed from Joint Implementation projects (governments have agreed that emissions reductions under JI and CDM projects must be ‘additional’ to what would have occurred anyway). Several members are involved in forestry offsets projects in developing countries.
Global Climate Coalition (GCC): www.globalclimate.org
This is arguably the most notorious US traditional industry anti-climate lobby: big oil, coal, auto industries and major energy users (BP and Shell withdrew due to bad publicity). Actively associated with climate science sceptics in the early 1990s. In the lead up to Kyoto sponsored, along with other US groups, a multimillion-dollar advertising campaign in the US specifically to derail the US position at the Kyoto negotiations. At COP4 its delegation was reduced and targeted efforts on the US delegation.
Position: opposes ratification, supports voluntary measures and unrestricted ‘maximum flexibility’ on carbon trading “While knowing Kyoto is the wrong path to follow” (press release May 18, 1999).
International Chamber of Commerce (ICC): www.iccwbo.org
Umbrella group of international Chambers of Commerce (7,500 companies), provides one vehicle for corporate attendance at the negotiations. Previous head of ICC’s delegation was Clem Malin, VP of International Relations at Texaco. In the lead up to Kyoto the ICC did not support binding targets and timetables for emissions reduction.
Position: supports maximum flexibility and involvement with the private sector. ICC does not support restrictive ‘supplementarity’ (parties have agreed that the use of flexibility mechanisms should be supplemental to domestic action). Supports voluntary actions and not emissions caps on companies. Position maximizes role of private sector, but opposes ‘extensive reporting requirements’ under the auspices that it could jeopardize confidential business information.
International Climate Change Partnership (ICCP): www.iccp.net
This group claims a ‘responsible’ and ‘moderate’ voice on climate change. It contains many of the chemical companies that were active in the Montreal Protocol (controls ozone depleting chemicals) and which started participating in the climate talks because of negotiations to control HFCs (a refrigerant and powerful greenhouse gas. A BP Amoco representative is the President. In lead up to Kyoto advocated 2020 as earliest deadline for emissions agreements.
Position: no explicit comment on ratification. Does not support quantitative limits or ‘artificial restrictions’ on emissions trading or ‘upper bound’ limit on the clean development mechanism (CDM). Supports reductions from all sources and sinks being included.
International Petroleum Industry Environmental Conservation Association (IPIECA) www.ipieca.org
European based oil lobby organisation. Exxon’s Brian Flannery is one of the oil industry’s more notorious anti-climate lobbyists and regularly attends negotiations on IPIECA’s delegation.
Position: No clear positions published on the Kyoto Protocol. IPIECA still posts on the internet conclusions from a 1997 Economics Forum that “Near-term emissions reductions proposals can be costly (to both industrialized and developing countries), with unclear future benefits”.
Pew Centre (Business Environmental Leadership Council) www.pewclimate.org
This organisation, set up in 1998, is directed by Eileen Claussen, former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs. 21 major industries participate in the Leadership Council. These include BP Amoco, Boeing, Enron, Dumont, Toyota, and Whirlpool.
Position: no clear support for KP ratification only support of Kyoto as a ‘first step’ but looking for more agreement on the mechanisms and inclusion of some ‘important countries’, presumably developing countries. Supports credit for early action, market mechanisms and sinks (eg BP Amoco &American Electric Power’s Bolivian forestry protection project).
World Business Council for Sustainable Development (WBCSD) www.wbcsd.ch
Over 120 companies participate in this group set up in early 1990s around the Earth Summit. Close affiliations with the ICC. At COP4 BP, General Motors, SGS (Swiss verification and certification company, Societe General de Surveillance, already active in forestry verification projects) were the main delegates.
Position: no comment specifically on ratification of the Kyoto Protocol. Wants early credit and implementation for the Kyoto mechanisms, and non-restricted – meaning they should include all technologies and sinks and should be without ‘artificial restrictions’. Currently backing biotech giant Monsanto in its bid to have soil carbon sequestration recognised and eligible for credit.
Union of Industrial and Employers' Confederations of Europe (UNICE) www.unice.org
This group incorporates most of the national industry umbrella organisations. Former BP Oil (Europe) representative coordinates UNICE climate work and its delegation.
Position: no clear position on ratification, particularly the issue of supporting EU ratification decoupled from US ratification. Supports voluntary agreements between industry and government on energy efficiency, some specific domestic policies and measures such as transport policy, Kyoto emissions trading and Joint Implementation (JI).
Prominent national industry organisations
Other prominent players at the negotiations include
Germany: Federal Association of the German Industry, BDI; information agency of the German Power Plants (IZE)
Australia: Business Council of Australia; New Zealand: the Natural Resource Users Group
World Coal Institute, International Gas Union and a small selection of unions (eg United Mine Workers of America) also attend.
Pro Nuclear Organisations
Numbers of pro-nuclear participants at the negotiations increased exponentially from a ‘high’ of nearly 40 in Kyoto to over 150 at COP4, Buenos Aires last year. This staggering figure did not include groups such as ‘E7’ utilities or the Federation of Electric Power Companies (Japan) which includes several pro-nuclear utilities. The magnitude of the pro-nuclear lobby demonstrates how desperate they are to use climate change as a life-extension for a steadily diminishing industry. Organisations at COP4 included:
American Nuclear Society
Asociacion Argentina de Tecnologia Nuclear
European Atomic Forum
European Nuclear Society
Japan Atomic Industrial Forum
Nuclear Energy Institute
The Uranium Institute
World Council of Nuclear Workers
The main objective of all of these groups is to:
establish nuclear power as an ‘emission free’ energy source which is an available and credible solution to climate change
make nuclear power eligible for emission reduction credits under the flexible mechanisms of the Kyoto Protocol
Progressive Industry Organisations Insurance Industry Initiative: (www.unep.ch > trade and environment unit)
Launched in 1995 under the auspices of the UNEP's Trade and Environment Unit, this group contains 85 insurance and reinsurance companies from 27 countries. This industry first appeared at the negotiations in 1995 (COP1, Berlin) at a seminar of high level industry executives to express concern over high weather- related losses, and supporting strong government action to reduce greenhouse emissions. A third of all investments in global stock markets are currently managed by the insurance industry or pension fund managers and are worth around $15 trillion.
Position: supports 'rapid ratification' of the Kyoto Protocol and effective implementation by means of national Policies and Measures and international flexible mechanisms. In June 1999 it released a report 'The Kyoto Protocol and Beyond' giving a perspective on the market surrounding the Kyoto mechanisms, including the need for a strong compliance regime, and some broad comments on liability questions.
Business Council for Sustainable Energy Future (European progressive industries) www.e5.org
Sister organisations: usually give joint official presentations on the position of the progressive industries. Members include AEG appliances, Calor Gas, Danfoss, Deutsche Bahn, Enron, and well over 20 Associations including the International Association for Public Transport and the World Fuel Cell Council.
Position: The European organisation supports the Kyoto Protocol, promotes accelerated domestic action within the EU and obligations to show 'demonstrable progress' on emissions reductions by 2005 to build trust with developing countries, and an early start to emissions trading within the European Union countries.
Business Council for Sustainable Energy (US gas industry and progressive industries) www.bcse.org
Members include the American Gas Association, Trigen, SMUD, York International, Maytag, American Wind Energy Association and the Solar Energy Industries Association. Markedly different from the traditional industry lobby in the lead up to Kyoto, supported emissions reduction targets and timetables.
Position: the US organisation in contrast with its European counterpart 'withholds endorsement' of the Protocol until final details have been negotiated; it does however support the US reduction goal as long as the flexibility mechanisms (eg trading) are adopted internationally. Does not regard sinks alone, or the dominant use of sinks, as effective in achieving long-term emissions reductions. Supports the Kyoto mechanisms as means to spur market signals for technology transfer and clean energy technologies. Like the European organisation it believes industrialized nations must demonstrate progress on emissions before developing countries are expected to accept responsibilities.
Other organisations such as the European Wind Energy Association (EWEA) and the International Cogeneration Association have also played an important role in presenting to governments solutions to current fossil fuel dependence and supporting government action to reduce greenhouse gas emissions.
New organisations at COP4
* Monsanto and those who want to put carbon credits for soil sequestration of carbon on the agenda [Monsanto admits the tillage practices they advocate also mean selling more pesticides like Roundup]. The question of new and additional ‘sinks’ activities under the KP remains highly controversial.
* International Forestry Industry Roundtable (IFIR): pushing for very broad definitions of afforestation, deforestation and reforestation (Article 3.3/3.4 of the KP), and broad definitions of activities which should receive carbon credits. [Note that in May 2000 the IPCC will give a technical analysis of some of sinks related issues, including definitions].
* Verification and Certification industries: these industries took a far more prominent role with Lloyd’s Register, British Standards Organisation and others like SGS looking for prospective business opportunities. They provide views on aspects of the market that need to be in place before award of carbon credits or trading can take place with confidence: issues like compliance, verification, liability etc.
INDUSTRY SIDE EVENTS AT COP5
The official schedule is available on website http://www.unfccc.de > cop5 > side events
MONDAY 25 SINKS: 1-3pm German Forest Owners Assn + Confederation Europeanne des Proprietaires Forestiers
POWER INDUSTRY: 1-3pm IEA/OECD Policy roundtable on power generation + energy supply
GERMAN JI: 6-7.30pm BDI (Federal Association of the German Industry) The Ruhrgas/Gazpro AIJ project - success story on voluntary agreements and Activities Implemented Jointly
SINKS: 7.30-9pm WBCSD/Monsanto Potential for agricultural soil sequestration
(World Business Council on Sustainable Development)
TUESDAY 26 SINKS: 1-2pm Netherlands delegation & Agric Research Dept Importance of country specific data for decisions on additional 3.4 LUCF activities
(LULUCF = Land Use, Land Use Change and Forestry)
WIND: 2-3pm European Wind Energy Association & Greenpeace European wind energy forum for energy and development
SINKS: 3-7pm IPCC update on special report on LULUCF
ELECTRICITY/Emissions Trading: 6-7.30pm UNIPEDE/IEA trading in electricity industry, insights from greenhouse gases and electricity trading simulation
NUCLEAR: 7.30-9pm World Council of Nuclear Workers Are Tradeable Emissions Permits an attempt against human rights?
WEDNESDAY 27 US INDUSTRY: 1-3pm PEW Centre Electric power options in developing countries
VERIFICATION: 6-7.30pm International Standards Organisation (ISO) Standards in climate change mitigation: an overview of ISO’s work to date with case studies
CDM: 7-9pm German Delegation CDM, private business and development co-operation
INDUSTRY: 6-7.30pm International Chamber of Commerce (ICC) Briefing on climate change activities
INSURANCE: 6-7.30pm UNEP Insurance Industry Initiative The Kyoto Protocol – contributions from the financial sector
THURSDAY 28 SEMINARS
* IETA (International Emissions Trading Assn) (9am - 2.30pm, Cologne) Domestic and Commercial Emissions Trading Initiatives. Speakers BP Amoco (Charles Nicholson on pilot UK scheme), Dirk Forester EDF, Garth Edwards Natsource, Australian Greenhouse Office, BP Amoco, Shell, Transalta, Suncor, International Petroleum Exchange (IPE), Sydney Futures Exchange, Richard Sandor.
* Business Council for Sustainable Energy (10am-6pm, Bonn) Climate Protection is a Business Opportunity. Speakers (unconfirmed) Shell, Rolf Gerling, Enron, Deutsche Bahn, Danfoss.
US ELECTRICITY: 1-3pm Edison Electric Institute/UNIPEDE Electric Technologies
GAS: 6-7.30pm International Gas Union & Eurogas Natural gas - part of solution to climate change
WORLD BANK: 6-7.30 World Bank Climate change activities of WB
INDUSTRY: 7.30-9pm WBCSD Measuring and reporting business greenhouse gas emissions
(World Business Council for Sustainable Development)
FRIDAY 29 SINKS: 1-3pm Chile govt delegation LULUCF views of a group of Latin American countries
WIND: 1-3pm German delegation + FGU wind company Success stories of wind in German climate mitigation
INDUSTRY: 6-7.30pm BIAC Technology cooperation and climate change
(Business Industry Advisory Committee - OECD business liaison group of companies)
+VE INDUSTRY: 6-7.30pm Business Council for Sustainable Energy Roundtable discussion on climate change mitigation in developing countries
LENDING INSTITUTIONS: 7.30-9pm World Resources Institute Export Credit Agencies - technology transfer and climate change
SATURDAY 30 RUSSIA: 10-12am RIIA/Centre for Energy Policy Russian energy prospects and climate policy
(Royal Institute of International Affairs)
AVIATION: 12-2pm Leadership for Environment and Development Roundtable on aviation and sustainability
INDUSTRY : 2-4pm ICCP (International Climate Change Partnership) Long and short term goals of reducing greenhouse gases
JAPANESE INDUSTRY: 2-4pm Keidanren The challenge of Japanese industry – industry’s voluntary action plan
WIND: 4-6pm European Wind Energy Association (EWEA) - no subject given
AGRIC SINKS: 4-6pm Canadian delegation & Agri-Food Canada Measurement and Verification of carbon sequestration in soil
MONDAY 1 NOVEMBER HFC/PFCs: 1-3pm BDI & German chemical industry HFC/PFC/SF6 possibilities to reduce emissions by German industry
CDM: 6-7.30pm WBCSD/UNDP Project on CDM capacity building
(World Business Council on Sustainable Development)
SINKS: 7.30-9pm ICC& American Forest and Paper Association Forest carbon sequestration
(International Chamber Commerce)
TUESDAY 2 NOV PROGRESSIVE INDUSTRY on COMPLIANCE: 1-3pm BCSE Mechanisms and compliance
(Business Council for Sustainable Energy)
CDM/INDUSTRY: 1-3pm WBCSD successful launch of CDM
CARBON FINANCE: 7.30-9pm Centre for Sustainable Development in the Americas + Andina de Fomento (CAF) Carbon Finance - perspectives for the Future
COMPLIANCE: 7.30-9pm RFF (Resources For the Future) Compliance - issues and methods
WEDNESDAY 3 NOV INDUSTRY/FLEXMEX: 1-3pm: ICC Special Panel Session – A business perspective on the Kyoto Mechanisms
(International Chamber of Commerce)
VERIFICATION: 1-3pm Lloyds Register/UNIDO Accreditation, verification, certification
CDM/IETA: 6-7.30pm IETA (International Emissions Trading Association) CDM workshop
UNIONS: 6-7.30pm International Confed. of Free Trade Unions Toward employment transition for climate change
OIL MARKETS: 6-7.30pm CICERO “Who’s afraid of climate change?” Effects of the Kyoto Protocol on global oil markets
(Centre for International Climate and Environmental Research)
KOREA: 7.30-9pm Korea Chamber of Commerce Policy approaches to greenhouse gas emissions reduction and a model for developing countries: the case of Korea
INDUSTRY/FLEXMEX: 7.30-9pm German Power Suppliers (IZE) Presentation on the flexibility instruments and joint implementation
THURSDAY 4 NOV US INDUSTRY: 6-7.30pm Business Round Table Potential benefits of technology
HOT AIR/JI: 7-8.30pm RIIA/Centre for Energy Policy Stop hot air- start early JI
(Royal Institute for International Affairs)
NUKES: 7.30-9pm International Nuclear Forum - no subject