In the fields around this giant chemicals factory in Gujarat, the barren soil smells of paint stripper and the water from the well makes you gag. So why has it been given tens of millions of pounds of taxpayer-funded UN 'green reward points', which are traded hungrily on the financial markets at huge profit?
...Radha, a tough, sinewy widow and the only female farmer here, says that the well, which draws from deep groundwater, used to adequately supply the village and surrounding farms.'We have plenty of water – but water is the problem,' she says.As the bucket returns to the top, we can make out a white, almost oily-looking film on the surface of the liquid, which has formed little snowflake shapes.She scoops up some water and asks us to smell it. It has an odour so acrid it catches in the back of our throats, making us cough.'We can't irrigate our crops with it,' she says. 'It's the water of death. It kills most crops we put it on.'
THE GREAT CARBON CREDITS MERRY-GO-ROUND
In theory the carbon-credit trading scheme is a thoroughly modern and intelligent approach to reducing world pollution. The graphic above explains the system – in a nutshell, rich First World companies are financially encouraged to help poorer Third World companies clean up their manufacturing processes. They do this by accepting 'carbon caps', or limits, which if exceeded can be replenished by purchasing carbon credits – via specialist traders – from manufacturers in the developing world.
In practice, however, there are loopholes that seriously threaten the schemes' credibility. The most significant are these: they take into account only greenhouse gases, money made through trading credits can be used to expand a business so increasing pollution and, perhaps most questionably, auditors of the scheme are paid for by the companies.
CARBON CREDITS OR TOXIC DEBTS?
Carbon credits have become such a profitable commodity that market speculators – hedge funds, banks and pension funds – have enthusiastically bought into them. Traders buy and sell credits issued by both the UN and EU schemes. For trading purposes, one allowance or Certified Emission Reduction
(CER) is equivalent to one ton of CO2 emissions.
These credits can be sold privately or on the international market. Louis Redshaw, head of environmental markets at Barclays Capital predicts that 'carbon will be the world's biggest commodity market – and it could become the world's biggest market overall.'
But that was before the recession. A global fall-off in manufacturing means that companies are producing far less carbon. In recent months, companies in this position have dumped their credits on the market. This has not only provided heavily polluting firms with funds to plug gaps in their balance sheets but has also pushed down prices. Carbon has now dropped to such a level it's cheaper to burn polluting fossil fuels and buy up credits than find ways of reducing emissions.
