About IATP

The Institute for Agriculture and Trade Policy promotes resilient family farms, rural communities and ecosystems around the world through research and education, science and technology, and advocacy.

Founded in 1986, IATP is rooted in the family farm movement. With offices in Minneapolis and Geneva, IATP works on making domestic and global agricultural policy more sustainable for everyone.

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Think Forward is a blog written by staff of the Institute for Agriculture and Trade Policy covering sustainability as it intersects with food, rural development, international trade, the environment and public health.



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December 08, 2010

Marching in Cancún

Cancun 2 003 The security is in full force at the global climate talks taking place in Cancún. Negotiators are cloistered in a resort called the Moon Palace. "Official" side events are a 20-minute bus ride away. And self-organized civil society events by various social movements and grassroots organizations are even farther away—up to an hour by bus.

The geographic separation of government negotiators and organizations representing people directly affected by climate change—particularly farmers—is reflected in the actual negotiating text. While governments maneuver to set up carbon market schemes and non-binding pledges, the participants in two large marches yesterday in Cancún urged more immediate action.

Cancun 2 030 Four IATP staffers, plus IATP board member Esther Penunia of the Asian Farmers Association, attended a march led by Mexican civil society groups in downtown Cancún, which included farm, labor and environmental groups from all over the world. An amazing array of signs, costumes and chants zeroed in on the main culprits of climate change: global corporations, who have exploited the world's natural resources, while at the same time steadily increasing greenhouse gas emissions. The groups also targeted international financial institutions, like the World Bank, who have helped finance multinational-led projects around the world that have continued this trend of natural resource exploitation.

Within the confines of the Moon Palace its hard to find any mention of the role of multinationals in causing climate change. Instead, they are often cited as part of solution with a variety of far-fetched technological advances and private finance schemes. If governments are serious about addressing climate change, they should listen to those who marched yesterday in the streets of Cancún, and less to multinational lobbyists who prowl the halls of the Moon Palace.

Cancun 2 041More pictures of the march, and our involvement in Cancún are on our flickr page.

Cancun 2 055

Ben Lilliston

December 06, 2010

UN climate talks keep agriculture on the wrong track

At the U.N. climate talks this week in Cancún, an unfortunate trend is continuing that could have major consequences for the world's farmers. Agriculture is unique in that certain farming practices can actually sequester carbon to help address global climate change. Within the climate negotiations, governments continue to move forward on efforts to create a market for carbon sequestered by agricultural practices. But such a market would allow polluters to keep polluting and big financial firms to make a bundle.

At a press conference today in Cancún, IATP's Steve Suppan and Karen Hansen-Kuhn, along with Esther Penunia of the Asian Farmers Association, argued that the focus of climate negotiators should be on adaptation for agriculture. Farmers around the world, particularly in developing countries, are urgently in need of support to deal with the effects of climate change and transition toward more climate-resilient, sustainable practices.

You can view the full press conference here.

Ben Lilliston

December 02, 2010

Agriculture in the climate talks - new paper

At the United Nations Framework Convention on Climate Change (UNFCCC) negotiations in Cancún, Mexico, governments will decide whether to expand the role that agriculture plays within global climate talks. The fate of these proposals will determine whether agriculture will be used by polluters to offset their emissions and shift the burden of greenhouse gas reduction onto developing countries. The Cancún meeting has the potential to further marginalize small-scale producers and their rights to land and livelihoods, and could also lead to perverse incentives to further intensify industrial agriculture practices.

In a new paper, Agriculture in the Climate Talks, IATP’s Shefali Sharma analyzes how agriculture and food security are treated within the UNFCCC negotiating text, covering issues around mitigation, adaptation and carbon markets. The paper is part of a series IATP has released to coincide with the U.N. climate talks in Cancún. You can find the full series, along with blog reports from IATP staff in Cancún, at: www.iatp.org/climate.

Ben Lilliston

Will the UN repeat Copenhagen's mistakes?

IATP's Shefali Sharma is blogging from Cancún, Mexico where the United Nations Framework Convention on Climate Change is being negotiated.

It’s the fourth day of the climate talks in Cancún and the atmosphere in the corridors is hushed. There are six bodies meeting over a two-week period here and already many of the meetings in the daily program are being limited to “parties and observer states.” This leaves most of the civil society organizations—who have travelled long distances to be here—essentially out of the negotiations. This is in contrast to other U.N. negotiations that are supposed to be open and transparent with observer organizations having opportunities to intervene and engage.

Information about what is happening in the key areas of the negotiations is not filtering out adequately. And those of us gathered here are having to resort to personal contacts in government delegations to find out what is going on. At the outset of the meeting, many government delegations also stressed that the number of simultaneous meetings had to be limited because it prevents smaller delegations from being able to participate adequately.

We already see a mushrooming of the number of meetings in the form of contact groups, informal consultations, “spinoff” groups and drafting groups taking place. This is in addition to the numerous side events that are taking place in the official NGO space several kilometers away from the negotiating halls in the Moon Palace, as well as other events outside of the officially accredited spaces. Individuals are having to shuffle from point A to B in shuttle buses as any other form of transport is unavailable along the security strip.

Those who were present in COP 15 in Copenhagen last year say that it is starting to feel as if Cancún will be a repeat of Copenhagen where more and more meetings become restricted to governments only and civil society is shut out from participating in an issue that affects all of humanity. Civil society organizations, for instance, can only meet amongst themselves in the Cancún Messe which is several kilometers away from where the actual negotiations are taking place. We are not even allowed to book meeting rooms to discuss and share information about the talks in the Moon Palace where the drama will unfold in the coming days. And because there has been so much trouble with internet facilities in the negotiating spaces, communicating by email has also proved difficult.

Moreover, though the Mexican government said that it will not repeat Copenhagen by having a select group of heads of states come to Cancún to patch together a backroom deal—it now appears that around 40 governments are being invited for the high-level segment of the talks which begin next week. There is a concern that the elements of Copenhagen’s last-minute deal called the “Copenhagen Accord,” which was instigated by President Obama and created huge fissures in the prospects of a global deal, might be pushed again in Cancún.

Civil society groups, including IATP, have raised several concerns regarding the trajectory of the talks in an open letter to the Mexican Government serving as the president of the UNFCCC conference of the parties in Cancún. The groups state, “The [Cophenhagen] Accord, produced by an exclusive group of 28 countries selected by the Danish Government, and tabled on a 'take-it-or-leave-it' basis in the final hours of the conference, is illegitimate and, even according to the U.N. climate secretariat, has no status. Scientists have confirmed that its pledges could lead to upwards of 4 degrees of warming leading to catastrophic impacts on the world's people and ecosystems and irreversible climactic change.”

Already, Japan has made strong statements wanting to end the Kyoto Protocol—a legally binding protocol under the UNFCCC, which was agreed in Japan itself. Its end would mean the end to the only legally binding treaty that obliges industrialized countries to cut their greenhouse gas emissions. If the industrialized world wants all countries to take responsibility for urgently reducing and halting the threat of climate change, they will have to take the lead in doing it back home. And doing it now. We will see how the drama unfolds in the coming days.

Ben Lilliston

Same old snake oil at Cancún climate talks

IATP President Jim Harkness is blogging from Cancún, Mexico where the United Nations Framework Convention on Climate Change is being negotiated.

The setting for the climate talks is truly surreal. As if to distract us from the dirty dealings going on inside the halls, our Mexican hosts have us staying along the beautiful (if over-developed) Yucatan coast. The ocean is blue, the sand is white and squadrons of Brown Pelicans and Magnificent Frigatebirds patrol the skies. There are “Iguana Crossing” signs along the side of the road, and I almost butted heads with an emissions trader this afternoon when our shuttle bus braked suddenly to allow a troop of Coatimundi to cross the road.

But Mother Nature is also onto the game. Skies have been dark and stormy, and the puddles at our feet remind us that the land we are standing on will be underwater by the end of the century because of the greed and cowardice we are witnessing from rich country governments and corporations here in Cancún.

Much of the talk in the corridors and press halls today was about Japan’s announcement yesterday that they will neither place their emissions targets under the Kyoto Protocol nor even accept a second commitment period when the current one expires in 2012. Their statement elicited a general outcry from delegates and civil society observers alike.

Speaking at a press conference this afternoon, IATP Board Member Sivan Kartha (his day job is with the Stockholm Environment Institute) debunked, point by point, Japan’s flimsy arguments for their abandonment of an agreement signed in their own ancient capital. You can watch his presentation here.

But while Japan’s move is making headlines, the global community’s collective response to climate change is under much more insidious attacks in myriad meetings and processes that are either closed to the public or deemed too arcane to be newsworthy.

A few I heard about today:

  • Brazil is pushing for inclusion of “forests in exhaustion” as a category eligible for Clean Development Mechanism (CDM) funds. As explained by Ecosystems Climate Alliance, this is a cynical rhetorical sleight of hand that would build on an existing loophole in the Kyoto Protocol in order to provide new incentives for clearcutting of rainforests. (All at a healthy profit for both logger and plantation owner.)
  • I heard from a couple of insiders that the concept of geo-engineering seems to be gaining legitimacy within the UNFCCC. This term covers a wide range of massive techno-schemes based on the idea that we can treat the earth like a chemistry set, combining elements here and there, to cool it just like we’ve warmed it up. The specific ideas range from biochar (burying billions of tons of charcoal to sequester carbon underground) to fertilizing the oceans with billions of tons of iron filings, to pumping (yes, billions of tons) of cold water from the deep oceans to the surface. Elizabeth Kolbert has written a brilliant introduction to and critique of geo-engineering, which you should read.
    These schemes are the climate change-equivalent of Hail Mary passes in football. That they are getting any serious attention betrays a troubling new degree of desperation.

The International Emissions Trading Association (IETA) is here in force, hosting over 70 events during the two-week talks. I sat in on one of them, a press conference, and heard their new refrain, that 85 percent of funding for climate change adaptation and mitigation will “have to” come from the private sector.

The common denominators in all three examples are markets and technology, the same snake oil and lottery tickets the rich have been selling the poor for years. (The World Is Flat!) The problem is, the mystique surrounding these two ideas permeates not just the developed world, but also the mentality of elites in the global South. How much simpler our lives would be if all we had to do was wait for the climate problem to be solved not by some inconvenient redistribution of resources or change in consumption patterns, but by the Invisible Hand and the next (Bengali or Nigerian?) Thomas Edison? It is these fantasies, not the tropical drinks with umbrellas in them, which are distracting negotiators (and many large Northern NGOs) from the intellectually straightforward, but politically difficult task at hand.

The consolation in this otherwise grim tableau is that ordinary people are here as well: youth, people from faith communities, farmers, fishers, waste pickers, trade unionists, students, people from indigenous communities and grassroots greens. They want solutions from governments, but they know that they already have many of the solutions on their own farms and in their own communities, and they are here to share them. These people hope that they can make their case and be heard by their elected representatives, but know that even if all they do in Cancún is refuse to remain silent while those representatives sell them out, it will still have been worth the trouble.

Ben Lilliston

December 01, 2010

Cancún suprises logistical and political

IATP's Steve Suppan is blogging from Cancún, Mexico where the United Nations Framework Convention on Climate Change is being negotiated.

After the disastrous logistical organization of U.N. climate talks in Copenhagen, we prepared well to avoid similar surprises in getting to Cancún, Mexico. Nevertheless, the $40 airport taxi announced on the conference website would have been $70, if we had taken the taxi. And who knew that a five mile trip from the hotel to the conference center would take up to two hours due to security arrangements for Mexican President Felipe Calderón, who came to the Moon Palace to give an inaugural address to delegates? And there were pleasant surprises too: the hotel food, the sunset that widely surpassed the picture on the hotel website.

IATP set up its literature booth with the International Federation of Organic Agricultural Movements (IFOAM). Then we walked about to see what was in the booths of over 200 hundred organizations in the Cancún Messe, the mammoth site of myriad side events organized by governments, intergovernmental organizations and nongovernmental organizations. There are not a lot of bulletins that cover the negotiations themselves, but the Third World Network's bulletins are always worth reading. The TWN Cancún News Update for November 29 reported a big surprise for most of the government delegates.

Chair of the Long-term Cooperation Agreement (LCA), Ms. Margaret Mukahanana Sangarwe of Zimbabwe, posted on the UNFCCC website on November 24 a draft decision text that reflected the views of developed countries, but not the LCA-negotiated text that had been agreed on August 13 in Tianjin, China. For example, the posted text dropped the developing-country proposal for an international mechanism to compensate developing countries for the costs of climate change–inflicted damage. Also, developing-country proposals on adapting to climate change, finance and technology transfer were ignored or watered down.

Many delegates were still en route to Cancún for pre-meetings when the Chair posted her personal interpretation of what was needed for a successful outcome to the Cancún meetings. UNFCCC-member governments had not asked for this text and protested vigorously at the opening session that the text might be considered a substitute for the negotiated text. Mukahanana clarified today that her diplomatic note was not a formal text but her interpretation of the “possible elements” that might lead to agreement in Cancún. Still, the damage had been done: the work to overcome the bitterness about the top-down imposition of the Copenhagen Accord had been wasted by a note that reflected the accord and the interests of its proponents.

Then on November 30, Japan surprised delegates by announcing that it would never agree to new commitments to reduce greenhouse gasses under the Kyoto Protocol. Instead, it would join the United States in opting for voluntary pledges under the Copenhagen Accord, a political agreement that would not be binding on developed-country members but that would oblige developing countries to agree to international oversight of their actions to reduce greenhouse gasses. The Japanese announcement brought sharp rebuke, including from IATP board member Sivan Karthi.

IATP was not entirely surprised to discover that access to negotiating sessions has been even further reduced than what was allowed for last year's negotiations in Copenhagen, Denmark. A few table-setting sessions are open to NGO observers but negotiating sessions are not. We are going to learn what we can by talking with delegates outside of the negotiating rooms. And we'll offer advice if asked to do so. We'll go to side events to learn, e.g., about the many technical difficulties in measuring soil carbon and other terrestrial features of climate change.

And we will do some teaching and advocacy at our side event with IFOAM on December 3 and at several other NGO events. We hope to be surprised that the governments will make progress on agreeing on how to reduce greenhouse gases, how to adapt to climate change, how to pay for it, and who will pay for it and when. But it is hard to be optimistic about a good result from the Cancún negotiations for the planet and its people when the only good surprises thus far are logistical ones like the enjoyable meal we had tonight.

Ben Lilliston

November 29, 2010

Will they get it right in Cancún?

The United Nations two-week long meeting on climate change begins today. In Cancún, Mexico, governments will have yet another opportunity to commit to a new global action plan to save the planet. For civil society organizations like IATP it is a unique opportunity to connect with and learn from farm organizations, scientists, academics and activists from around the world. Throughout these two weeks, IATP staff will be reporting on the Cancún climate meeting—from the negotiating halls to the various civil society meetings and protests.

Today, IATP released a new series of papers focusing on challenges and solutions for agriculture and climate change. Below is our press release with links to each of the papers in the series:

Governments at Cancún climate talks need to support local solutions
IATP releases new ‘Climate and Agriculture’ series

CANCÚN, MEXICO – Governments attending the global climate talks in Cancún, which begin today, need to abandon loophole-ridden carbon markets and support bottom-up climate solutions that integrate equity, food security and democratic participation, according to the Institute for Agriculture and Trade Policy (IATP).

Today, IATP released a new series of papers focusing on agriculture and climate change. The series covers issues related to agricultural practices, climate finance and adaptation strategies. IATP is sending six staff members to the United Nations climate talks in Cancún and is hosting an official side event on climate-friendly agriculture, as well as speaking at a number of civil society workshops.

“Climate negotiators, led by the U.S., are too distracted by trying to set up unworkable rules for a new carbon market that will primarily benefit big financial players and the big polluting countries,” said IATP President Jim Harkness. “We need to get back to basics by strengthening commitments to reduce greenhouse gas emissions, supporting local efforts and fulfilling funding obligations to countries struggling to adapt to the effects of climate change.” 

IATP’s new series emphasizes that negotiators in Cancún should not consider agriculture as simply an offset for polluters. Rather, agriculture has a multifunctional role in society to strengthen food security, protect the environment and provide livelihoods for people around the world. Papers in the series include:

“Financing Agricultural Adaptation to Climate Change: A Modest Beginning,” by Steve Suppan – Proposes concrete short-term options for financing climate change adaptation in developing countries.

“Women at the Center of Climate-friendly Approaches to Agriculture and Water,” by Shiney Varghese – Profiles the agricultural practices of the Tamilnadu Women’s Collective in India that both mitigate and adapt to climate change.

“Grain Reserves: A Smart Climate Adaptation Policy,” by Sophia Murphy – Makes the connection between efforts to ensure food security and climate change adaptation.

“A Farm Bill for a Cooler Planet,” by Julia Olmstead and Jim Kleinschmit – Examines how the U.S. Farm Bill could support practices that both mitigate and adapt to climate change.

“The New Climate Debt: Carbon Trading Wrapped in a Green Bond Proposal,” by Steve Suppan – Analyzes a climate finance proposal by the International Emissions Trading Association that would enrich global carbon traders.

You can read all of the papers in IATP’s climate series, as well as blog reports from Cancún by IATP staff, at www.iatp.org/climate.

To hear directly from farmers on how climate change is affecting their lives, see IATP’s new Voices of Agriculture and Climate website at www.climateandagriculture.org.

The Institute for Agriculture and Trade Policy works locally and globally at the intersection of policy and practice to ensure fair and sustainable food, farm and trade systems. www.iatp.org


Ben Lilliston

November 24, 2010

The cost of adding carbon credits to clean water

In a recent NYT opinion piece Clean Water at No Cost? Just Add Carbon Credits, Tina Rosenberg argued that one of the best ways to ensure that the world’s poorest have access to water is through carbon trading. Having spent “more than two decades reporting on social problems around the world, and where possible, exploring new models to address them,” in October 2010, Rosenberg and David Bornstein began a series, entitled Fixes, that proposes to help spread knowledge about solutions (or potential solutions) to real-world problems, and how they work.

But in this case, her solution rests on a simplistic understanding of the two central issues: the water crisis and carbon trading. There are a many of reasons for the water crisis and the large numbers of water-poor, and working through them is like peeling the layers of an onion. The most apparent reason for not having access to safe water is the lack of public financing to build a water infrastructure. So, for a while, multinational-led water privatization was promoted as the solution, with these companies leveraging the financing for building and maintaining the water infrastructure. However as the article acknowledges, “for-profit water multinationals such as Bechtel and Suez” have been critiqued “for the way they treat rural people and slum dwellers.” 

These companies “have little incentive to lay pipes to reach people who are far away, and if they do, they charge very high prices.” In the absence of water infrastructure, the next best solution is decentralized water treatment systems. The article tells us about a technology that can help individuals and households clean their own water! LifeStraw, an instant micro-biological water purifier, is a “point-of-use water purification system that can filter up to 18,000 liters of water,” which is estimated to last for about three years (at  the rate of 16.43 liters of purified drinking water per day). It is as simple as having a straw for an individual, or a slightly bigger "LifeStraw Family" with a spout that can be hung from the wall of a household. Point-of-use water purifiers have been called more effective compared to cleaning the original water source, especially when it comes to poorer environments.

Several U.S. government organizations including the Center for Disease Control (CDC) and the U.S. Agency for International Development (USAID), as well as Coca Cola, have been involved in the testing and promotion of this technology in a number of countries in Africa. It is understandable that the organizations would want to test it in sub-Saharan Africa where access to clean drinking water is seen as a challenge. Vestergaard Frandsen, the company that developed LifeStraw, plans to provide the technology at no cost to water poor people! So far, so good!

How would they pay for it? Vestergaard Frandsen is multinational leader in making what they call "profit for a purpose." They plan to raise money by charging those who emit greenhouse gases (GHG) in exchange for an allowance of GHG emissions, or put in simpler words, in exchange for an allowance to pollute more.

The argument goes thus: If there were no LifeStraw, poor people would have to boil their water. This would contribute to GHG emissions. Thus, access to LifeStraw potentially leads to the reduction of an activity that would have otherwise contributed to global warming. All this sounds very good, but there is a big “if” involved here. What this imagined scenario ignores is the fact that along with lack of access to water, the poor also lack access to other resources, including firewood. Boiling water is neither a common practice, nor a priority for poor households in most parts of the world. It is mainly those with easier access to resources, and the ability to spare resources for doing that additional chore who take up the practice. This has been my repeated experience across two decades of interactions with poor communities.

It is at this point that one might want to peel the next few layers: Why are our water resources polluted and depleted? Most obviously, because of several causes, including: lack of sanitation facilities; improper disposal of untreated human waste; discharge of untreated industrial effluents into rural and urban waterways that sometimes double as drinking water sources; excessive use of agrochemicals that seep into underground waters; and agricultural runoffs that pollute surface waters.

Peel once more and you come to the core of it all: Our consumption-driven economies require water-intensive, high-output agricultural and industrial production as well as energy generation, that takes water for granted. There is no doubt that technologies like LifeStraw may be necessary (and much better than, say, bottled water) in water-stressed situations, or emergencies such as floods. But it would be misplaced to fund them through carbon trading. Carbon trading has emerged as a response to our refusal to cut down or reduce actual emissions. Instead it is a mechanism to provide emitters with a cheaper option: continue with emissions by buying permits to pollute rather than incur cost to replace the GHG-emitting technology with better options. In order for carbon markets to function, there is, first, the need to create a demand for carbon credits. 

As and when national governments introduce an upper limit (also known as a "cap") to allowable emissions, such a demand will be created. Companies and countries that exceed the limit—largely in the North—will need to buy credits from elsewhere—largely, the South. Second, there is the need to create carbon credits that can be bought by carbon polluters. According to current mechanisms—such as the Clean Development Mechanism (CDM)—these credits can be accrued only if the condition of "'additionality," (amongst others) is fulfilled. 

For example, credits may accrue when farmers switch their practices from fossil-fuel intensive to organic, or when governments provide policy incentives to nudge a shift in consumption patterns. In both cases, if GHG emissions are less compared to what would have happened in the absence of the project, they would be eligible for carbon credits. But there are problems with such mechanisms. To begin with, they do not take existing conservation practices into account. For example, in many of the poorer regions of the world, natural farming is practiced as part of local traditions. There is also the possibility of dubious claims where carbon credits may be granted to hypothetical activities. For example, the provision of LifeStraw is expected to reduce the GHG emissions associated with the (non-existent) practice of boiling water. Additional problems associated with the carbon derivatives markets is yet another issue.

Even if problems associated with carbon trading practices and carbon markets were to be fixed, some fundamental problems would persist. First of all, when carbon credits are allocated to GHG-reduction activities, often practiced by communities and countries in the South, it is a means for passing on the responsibility of GHG reduction to those countries whose climate footprint is limited but whose climate vulnerability is high. In the case of water poor, they need finances, and are willing to carry the burden in order to have access to funds to help climate-proof their nation. Second it allows polluting communities and companies to continue with their current GHG-emitting practices at almost no cost to themselves. Thirdly, carbon trading becomes a means for generating profit from doing almost nothing, or close to nothing.

For example, when Vestergaard Frandsen provides access to clean water for free to water poor, is the company trying to fulfill their corporate responsibility? As far as I can make out, it is far from it: Vestergaard Frandsen is hoping to cash in on the possibility of emerging carbon markets. Ostensibly promoted as a win-win mechanism to reduce GHG emissions, carbon trading and carbon markets have created spaces where companies such as Vestergaard Frandsen can accrue carbon credits worth billions for themselves for claimed GHG-reduction practices. However, as my colleague Steve Suppan, an expert on carbon derivatives pointed out: “Carbon markets cannot exist without governments creating both the demand [cap] and the supply [billions of dollars of emissions permits given to industry and offset credits]; the collapse of the Chicago Climate Exchange is just more evidence of this fact.” The NYT article had him remarking: “So now carbon marketers are looking for a lifeline in water. My, what a surprise! And what a surprise that the carbon market–besotted NYT fell for this ruse!” No doubt, financial incentives should be available to continue with, or shift to, practices whose GHG-emission footprint is lower than the alternatives. But the model cannot be that of carbon trading; it has to be that of climate financing.

Similarly, adaptation funds should be made available for communities to access appropriate technology that can help meet their basic needs, like safe drinking water. At COP 16, negotiators should explore viable alternatives for climate financing that promote real solutions to real problems.

Shiney Varghese

November 06, 2010

Watered down 'Roadmap of Action' on climate change

IATP's Shefali Sharma reports from The Hague where the Global Conference on Agriculture, Food Security and Climate Change has just concluded.

The closing plenary of the conference ended with a laser light show about answers to the climate change problem and its impact on agriculture. At the closing, the “Chair’s Summary” of the six-day conference was handed to the participants and speakers made references to the idea that this was a roadmap for domestic as well as international action and its implementation would depend on all that were gathered at the conference.

The outcome at The Hague, in the end, was a non-binding Chair’s summary. This is because both governments and civil society organizations raised serious concerns about the first draft of the outcome document that was distributed yesterday morning in which draft language stated, “We collectively developed the Roadmap for Action on Agriculture, Food Security […] to achieve the ‘triple win’ of improving agricultural productivity and food security […]” 

Though the outcome document continued to have a “Roadmap for Action” as publicized prior to the conference, the language of the outcome document was watered down significantly from claims to a “shared understanding” to simply “Understanding the Challenges” in the final draft.

The organizers announced on Wednesday that the draft would not be a negotiated document but that inputs were welcome. Yesterday, Australia, Egypt, New Zealand, Philippines and the United States were just some of the countries cautioning that an outcome document that is not actively negotiated cannot claim to have a common vision for action. There was also a significant amount of confusion during the course of the meeting as to the intentions of such a roadmap. 

A statement by 12 organizations, including IATP, responded to the first draft circulated yesterday by stating, “Those most impacted by climate change and whose livelihoods are most at risk, in particular small-scale farmers, indigenous people and women especially from developing countries, have not been present, or consulted, nor have genuinely participated in this process. A democratic and participatory process should have involved all sectors of civil society engaged on these issues in a process designed to genuinely engage and dialogue with civil society. The ‘roadmap for action’ drafted by a few cannot be claimed to have been ‘collectively developed,’ even by those present at the Conference.”

They further stated, “Our understanding of the problems and solutions differs fundamentally from the framing posed by the organizers. We believe that adaptation has to be the main priority of this conference. The agricultural challenges faced by the poorest and most vulnerable, in Africa but also in Asia, in small-island states, in Latin America, are adaptation challenges. While sustainable farming practices can provide mitigation benefits, the climate crisis is caused first and foremost by the emissions of rich countries and we reject that small farmers are meant now to take on the mitigation responsibilities of the North.” You can read the full statement here.

The second draft that was circulated this morning no longer had references to the “collective” and “shared” understanding. And the third and final draft in the afternoon made minor edits to the morning version.  However, the outcome document remains a collation of a broad spectrum of ideas—none of them agreed and several of them controversial—that cover various propositions through the course of the six days of panels, side events and the ministerial roundtable.        

Seventeen of the 26 pages are in the form of an annex whereby countries, intergovernmental organizations, companies and a few NGOs have listed the policies, strategies and “incentive mechanisms” they will use to carry out their vision of “climate smart” agriculture—a phrase that has been in popular use in the run up to this conference. Vietnam has offered to host a “follow-up” conference in 2012 as the outcome document claims to have created a “living Roadmap initiated during this conference.” 

During the conference, the World Bank also positioned itself to expand its role into funding agriculture soil carbon sequestration projects through its BioCarbon Fund. Warren Evans, director of the Environment Division at the bank stated, “[…] for the first time, we have been able to move forward with methodologies  for monitoring, reporting and verifying soil carbon sequestration from improved agronomic practices […]. This is particularly important because all of us here today want agriculture and soil carbon to be formally eligible for carbon payment in future climate agreements.” 

A second major initiative that was announced today was the Commission on Sustainable Agriculture and Climate Change which will be launched by the Climate Change Agriculture and Food Security Program of the CGIAR and Earth System Science Partnership. The initiative is being supported by the Global Donor Platform for Rural Development. The initiative hopes to have a panel of nine senior scientists to act as commissioners. The commission would begin in early 2011 and aims to deliver  “a clear set of findings” and policy recommendations on agriculture and climate change to feed into such processes as the UNFCCC COP17 and Rio +20 Earth Summit.

Ben Lilliston

November 05, 2010

UN climate finance report falls flat

The U.N. High-level Advisory Group on Climate Change Financing (AGF) released their report today, outlining a series of recommendations on one of the most controversial elements of the global climate negotiations. Everyone agrees that money must be raised to help developing countries both adapt to the effects of climate change as well as reduce greenhouse gas emissions. But how much money, where the money comes from, and who controls it, are all stumbling blocks in the climate negotiations.

Last month, IATP and 25 other civil society groups wrote the AGF, calling for public finance options, including a financial transaction tax, to be given a priority over private finance options that depend on volatile and unreliable carbon markets. IATP's Steve Suppan wrote a paper last month outlining concerns with carbon markets as a reliable source of climate financing. Below is the press release issued today by civil society groups in response to the AGF report:

UN Advisory Group on Climate Finance Report Falls Flat

Recommendations Downplay Role of Public Finance, Rely Too Much on Private Finance

A new report on climate change financing options released today by a U.N. Advisory Group unwisely emphasizes carbon markets and other private finance options, while irresponsibly advocating an increased role for multilateral development banks (MDBs). Despite concluding that public sources of climate finance are available and promising, the report’s findings downplay the role that public finance can and must play in helping developing countries deal with climate change.

The U.N. Secretary General’s High-level Advisory Group on Climate Change Financing (AGF) issued its report today ahead of the annual U.N. climate summit in Cancún that begins November 29. The report outlines a number of public and private options to raise money to help developing countries adapt to the impacts of climate change and reduce greenhouse gas emissions. 

“The AGF recommendations are unfortunately based on unduly optimistic econometric projections and a blind faith in the capacity of highly volatile and unreliable carbon price signals to induce long-term investments in low carbon energy production and manufacturing,” said Steve Suppan of the Institute for Agriculture and Trade Policy. “A better start on climate finance would be for developed countries to make good on their $30 billion pledge for immediate funding to allow developing countries to adapt agricultural production and water management systems to the imminent ravages of climate change.”

“It was inappropriate for the AGF Report to make reference to the role of multilateral development banks. MDBs are not a source of climate finance, but are used as a channel. And they are not acceptable even as a channel. MDBs are a part of the climate problem, not the solution. The World Bank and other MDBs are far, far more adept at causing climate pollution than in helping countries to mitigate or adapt to it. Using MDBs as a channel would also mean climate finance in the form of loans or other debt-creating instruments,” said Lidy Nacpill of Jubilee South – Asia/Pacific Movement on Debt and Development.

“Adaptation funding, in particular, is compensation for damages done by developed countries and should only be given in grants. It is untenable that the AGF suggests otherwise. The enormous costs of dealing with climate change must not add to the already heavy debt burdens experienced by many developing countries,” added Nacpil.

“The AGF report—as limited in scope and conservative in its estimates as it is—still shows that there are numerous viable options to generate public finance for climate change,” said Ilana Solomon of ActionAid USA. “Developed countries have no excuse for inaction. The options are there. They must work through the U.N. Framework Convention on Climate Change to come to agreement on a combination of public sources to generate the desperately needed resources to help developing countries confront climate change."

“The AGF acknowledges that meeting the needs of developing countries will take a ‘systemic approach’ to financing climate adaptation and mitigation,” noted Janet Redman, co-director of the Sustainable Energy and Economy Network at the Institute for Policy Studies. “Options like a financial transaction tax meet the mark: stabilizing the economy by curbing dangerous speculation and raising hundreds of billions of dollars each year for global public goods like combating climate change. The AGF is undercutting its own mission by underestimating the revenue generated by a feasible and popular source of public finance."

The groups expressed concern that the AGF was guided by a pledge developed countries made in Copenhagen to mobilize $100 billion per year by 2020 in public and private finance—a pledge which falls short of reasonable estimates of climate financing.

“The $100 billion is an arbitrary, political figure that is based neither on need nor on equity. If the U.S. government rapidly mobilized trillions to bail out Wall Street, why cannot at least equal effort be put toward bailing out the planet from a climate crisis that rich countries caused?” said Karen Orenstein of Friends of the Earth U.S.

In October, at the global climate talks in Tianjin, more than 25 civil society organizations sent a letter to the co-chairs of the AGF outlining their recommendations for climate finance.

ActionAid USA, Friends of the Earth U.S., Institute for Agriculture and Trade Policy, Institute for Policy Studies, Jubilee South – Asia/Pacific Movement on Debt and Development.

Ben Lilliston

November 03, 2010

Don't forget the carbon speculators

This week, the World Bank, the U.N. Food and Agriculture Organization and a number of governments are meeting in the Hague at the Global Conference on Agriculture, Food Security and Climate Change. The original goal was to develop a Roadmap for Agriculture that would feed into the global climate change negotiations at the United Nations.

One of the key obstacles to developing a joint approach on agriculture and climate change is financing: finding money to help farmers and communities adapt to the effects of climate change while reducing agriculture's contribution to climate change. Carbon markets have been one of dominant proposals for financing agriculture-related projects on climate change.

IATP's Shefali Sharma is in the Hague and delivered the below statement to conference participants on the risks carbon markets pose to food security and greenhouse gas reduction goals.

Between 2007 and the spring of 2008, the food price index shot up by 85 percent, then in a few months, agriculture commodity prices fell by 60 percent. The massive price spike and drop was devastating for developing countries, particularly net-food importers. The food price crisis drove another 150 million people into hunger. According to UNCTAD, the extent of price volatility during the food crisis cannot be attributed to supply and demand alone. There is now a wide consensus that speculation on commodity markets by financial traders had a significant role to play in creating the crisis.

In our discussions in the Hague on food security, climate change and “innovative finance," the discussion on speculation in carbon markets and their impact on agriculture commodities is glaringly missing. 

Carbon and commodity markets are tied together through futures markets. And carbon trading is essentially derivatives trading. Unregulated derivatives trading, starting with mortgage-backed securities, was a major source of the current global financial crisis. This crisis is the reason most developed countries claim they have inadequate public funds for climate finance. Yet, carbon trading, to the scale at which it is being proposed, would create a large secondary market of carbon derivatives that has thus far been poorly regulated. When bundled with other commodities, such as maize, wheat  or oil, carbon derivatives have a large potential to destabilize agriculture prices. A second way that carbon derivatives can destabilize markets is through over-the-counter trading: a preferred mechanism of financial speculators who can make unlimited bets in commodity markets through this window. In 2008, 44 percent of carbon traded on the European Emissions Trading Scheme was through over-the-counter trades. As a result the carbon price in the ETS has been highly volatile and low.

Land-based offsets included in carbon markets therefore have significant implications on land tenure, food sovereignty, biodiversity and the right to food. These linkages need to be carefully examined and have thus far been neglected as a topic of discussion in this conference.

Industrialized countries and their industries have a legal and historical responsibility under the UNFCCC to mitigate climate change. They should not pass this responsibility to countries who have had little to do with creating the problem, but who nonetheless will bear the largest impacts. 

Reliable, predictable and public finance needs to fund adaptation needs in developing countries and there are several proposals including carbon, transport and financial transaction taxes that are on the table that should be considered.

Ben Lilliston

Reporting on the roadmap at the global conference on ag and climate

IATP's Shefali Sharma is reporting from the Global Conference on Agriculture, Food Security and Climate Change at The Hague.

It is the fourth evening of this six-day long conference, which promises to deliver a “roadmap” of concrete actions on agriculture, food security and climate change through a participatory process. This evening, a draft copy of the roadmap is supposed to be made available at the conference center with the announcement that this was “not going to be a negotiated text” and that only a “chairman’s summary” would be produced as the outcome of the meeting.

For three days now, the meetings have continued nonstop from 10 a.m. to 8 p.m. with plenaries morphing into working groups, morphing into numerous side events and an investment fair in the evening.  Participants have complained about not having any breaks or enough time to engage on the numerous topics. The conference has been dominated by panels and confusion has reigned with regards to the objectives of such a “roadmap” that will simply be delivered onto the participants in a top down manner.  Certainly, the chairmen’s summaries of what happened in working groups the day before illustrates that the conference is not meant to necessarily capture the diversity of views (and there are many, with little consensus on anything!), but steadily drive towards a planned outline of a “roadmap.”

Such a shell of an outline was handed to participants today with the headings such as: “Shared Understanding of the Challenges,” “Shared understanding of the Solutions,” “Urgent Need for Action,” and  “A Roadmap for Action.” This latter heading is further divided into “Policies and Strategies” for the catch phrase of the conference: “climate-smart agriculture,” “Tools and Technologies for Climate-Smart Agriculture” and “Financing for Transformational Change.” And yet the working groups have not necessarily been addressing these issues in any meaningful way, nor has there been adequate governmental and civil-society participation in the debates or time to merit a “shared understanding.”

The conference appears to be dominated by agribusiness interests and those promoting opportunities for carbon-related offsets and market-based approaches to solve the climate crisis in agriculture sector in the Global South. The words “mitigation” and “adaptation” have been used interchangeably, particularly by representatives from industrialized countries such as the U.S. and New Zealand, raising concerns that this so-called “roadmap” of the chair of the conference will simply ignore the legal obligations of industrialized countries who are party to the UNFCCC to reduce their own carbon footprint and greenhouse gases domestically and to set the stage for carbon offsets in agriculture.

In response to the proceedings of the conference, Bolivia and Nicaragua on behalf of the ALBA group of countries (Bolivia, Cuba, Ecuador, Nicaragua and Venezuela) made 13 recommendations to the conference organizers regarding the chairman’s summary as the outcome document of the conference. 
They noted that “a process that genuinely seeks to draw together the linkages between agriculture, food security and climate change should involve government delegates from both the agriculture and climate change sectors in order to support fair and effective solutions to the agriculture and climate crises.“ 

They called on the chair to “honor the commitments” under the UNFCCC on mitigation, adaptation and financing. They said, “Developed countries should not shift the burden of reducing their emission to developing countries through the carbon market and offsetting […]” Instead, they called for a “holistic framework” that also includes water management, biodiversity, agricultural prices, commodities markets, livelihoods, employment, salaries, womens’ and indigenous rights and poverty reduction.”

The ALBA group also supported the findings of the International Assessment on Agriculture Science Technology and Development (IAASTD) and referenced the World People's Conference on Climate Change and the Rights of Mother Earth held in Cochabamba on April 2010. They stressed that ecological agriculture “is the route to food security and adaptation to climate change” and as such adaptation should be the main priority of the conference. They noted that a market-based approach will lead to carbon speculation “and inevitably a carbon bubble. On the contrary, we need to get non-sector speculators out of food futures markets. Speculation in food security that leads to mass malnutrition is immoral and should be illegal,“ they said.

They concluded by emphasizing the Adaptation Fund of the Kyoto protocol as the appropriate channel for financing and stressed that further funding could also be obtained through Special Drawing Rights at the International Monetary Fund.

Tomorrow begins the ministerial roundtable to deliberate on the chair’s summary.

Ben Lilliston

October 29, 2010

Climate change and agriculture: Are we getting to the heart of the matter?

This Sunday, the Netherlands, several other governments, the World Bank and the FAO are hosting a major six-day conference on agriculture, food security and climate in the Hague. Those closely following the climate talks believe that this conference is an attempt to include agriculture much more centrally within the climate negotiations of the U.N. Framework Convention on Climate Change. 

In principle, that is a welcome idea—to finally address the air, water and land-related pollution that industrial agriculture causes and the dangers it poses to our health and the health of the planet. Agriculture, along with land-use changes, is said to contribute up to 30 percent of the gases that are warming our planet to dangerous levels. However, we must be able to recognize real solutions in addressing these problems.

The conference agenda shows scant evidence that the real causes of agriculturally based greenhouse gas emissions will be addressed. For instance, one of the biggest sources of agriculture emissions is industrial livestock factories. According to one FAO paper, the livestock sector contributes almost 80 percent of all agriculture-related emissions. Yet, industrial livestock factories do not appear to be a topic of discussion. 

Instead the emphasis will be on finding “innovative” ways to finance adaptation to climate change in developing countries and “innovative” practices that can help small farms adapt to climate change.  Innovation is well and good, only in this context it appears to mean carbon markets and “climate genes.”  Up to 75 percent of these patented technologies are owned by multinational seed and agrochemical companies such as Monsanto, BASF, DuPont and Syngenta.[1]

Civil society organizations, including IATP, concerned about this meeting and its intentions have joined together to send a statement to these governments, the World Bank and the FAO. They say it’s critical that governments heed the policy recommendations of IAASTD, a comprehensive assessment conducted by over 400 experts. They say that small family farms, laborers, indigenous peoples, women and civil society organizations are already providing practical, just and affordable solutions to the problems of food security and climate change. They just need to be heard.

[1] Others include Bayer, Dow, Mendel, Ceres and Evogene. Source: Syam, N. “Implications of an IP Centric Approach to Adaptation of Agriculture to Climate Change.” Power Point Presentation. South Centre, October 2010





October 20, 2010

Draft AGF report offers clues on climate finance

We've posted an October 4 draft report of the U.N. High-level Advisory Group on Climate Change Financing (AGF). The AGF was set up by the U.N. Secretary General in February, following the global climate talks in Copenhagen, to evaluate and provide options for financing efforts to address climate change, particularly in developing countries. The AGF is expected to release a final draft in November, and present its findings at the COP 16 meeting in Cancún.

Prior to the climate talks earlier this month in Tianjin, China, IATP released a short paper outlining concerns that carbon markets are considered a reliable source for climate finance. While in Tianjin, IATP and other civil society organizations sent a letter to the AGF co-chairs expressing that the amount of climate finance being considered is not enough; public finance should be prioritized over private finance; multilateral banks should not serve as a channel for climate finance; and that carbon markets lack the necessary reliability for climate finance.


Ben Lilliston

October 19, 2010

Agriculture in global climate talks

While agriculture is unquestionably one of the sectors most affected by climate change, it has historically been somewhat of an afterthought in global climate negotiations. That changed in the lead-up to the climate talks in Copenhagen last year. Agriculture now has its own sectoral chapter within the climate negotiations that covers such ground as food security, traditional farming knowledge, sustainable practices and a research agenda for better understanding agriculture's role in contributing to and addressing climate change. In addition to its own chapter, agriculture will certainly be affected by other aspects of the negotiations, including climate finance (how funding is raised and disbursed to address climate change).

IATP's Shefali Sharma just returned from Tianjin, China where the U.N. held its final negotiations prior to the next big global climate meeting (COP 16) in Cancún, Mexico in December. Shefali writes that despite the wide gaps between countries on many major issues, the stakes continue to be high for climate and food security around the world. In a post-Tianjin report, Shefali outlines the state of play for agriculture within the global climate talks and what we can expect to be discussed in Cancún. Read the full report.

Ben Lilliston

October 08, 2010

Climate finance must add up

One of the most contentious issues at the global climate talks taking place this week in Tianjin, China continues to be finance: how to fund efforts to adapt to climate change and mitigate greenhouse gas emissions. The global financial crisis has made these discussions even more challenging as developed countries like the U.S. struggle with rising deficits. To move the discussion forward, the U.N. established a High-level Advisory Group on Climate Change Finance (AGF) last year, which will present a report at the COP 16 climate talks in Cancún, Mexico in December.

Prior to the Tianjin meeting this week, IATP published a paper outlining our concerns with carbon markets as a reliable source of climate finance. Earlier today, IATP joined over 25 civil society organizations in Tianjin in expressing grave concern that the AGF “is not going to support the type of solutions that will truly benefit developing countries and communities living in poverty.” In a letter to the co-chairs of the AGF, the groups wrote that:

  • Pledges for climate finance are not enough of what is required.
  • Public finance should be prioritized over private finance.
  • Multilateral development banks should not serve as a channel for climate finance.
  • And, carbon markets lack the necessary reliability to be considered a valid source of climate finance.

You can read the full letter here.

Ben Lilliston

October 07, 2010

IATP at Tianjin climate talks: Carbon markets not reliable

IATP co-hosted a side event at the United Nations Framework Convention on Climate Change (UNFCCC) climate negotiations in Tianjin, China earlier this week. Below are the remarks of IATP President Jim Harkness. Other speakers at the side event included Nick Berning and Karen Ornstein of Friends of the Earth along with a Bolivian UNFCCC delegate on how carbon markets are being treated in the negotiations.

These remarks are also available to download as a PDF on iatp.org.

Carbon markets: A reliable and practical source of climate finance?

Remarks of IATP President Jim Harkness at the UNFCCC climate negotiations in Tianjin, China. Presented October 5, 2010.

Thank you for joining us today. My name is Jim Harkness.

I am the President of the Institute for Agriculture and Trade Policy. We are a 25-year-old organization that works locally and globally to ensure fair and sustainable

food, farm and trade systems. We are based in the United States, with offices in Geneva, Switzerland. And we have representatives on our board of directors from Brazil, the Philippines, Mexico, Canada and the Netherlands.

We’re here to talk about financing for adapting and mitigating climate change. Most of us believe that we will not have a meaningful climate deal without a clear system of finance in place to invest in a low-carbon economy and adaptation. We are at a critical juncture in this discussion. As you know, a draft decision on a climate finance fund is expected in Tianjin. Also, the Secretary-General’s High-level Advisory Group on Climate Change Financing (AGF), which was formed after Copenhagen, will be presenting a draft report on climate finance shortly after Tianjin and a final report before Cancun.

Much of the discussion in Copenhagen, and throughout the climate debate, has focused on carbon markets as a primary source of climate finance. Of the $100 billion a year by 2020 committed to “be mobilized” by developed countries within the Copenhagen

Accord, much of that climate finance is expected to come from carbon markets. Many have argued that carbon markets are necessary because developed countries no longer have the public resources for climate finance. It’s important to note that one reason developed countries are facing such financial constraints is the recent bailout of the financial services industry following a decade of its deregulation and spectacular

near-collapse. We are deeply concerned that the global community is now being asked to trust this failed and unrepentant industry—which has fought regulation following its bailout—to provide adequate climate finance through carbon trading. We believe that carbon markets will not result in reliable and timely financing for the critical projects around the world that are needed to adapt to climate change and reduce greenhouse gas emissions. And, having studied the role of poorly regulated financial markets in the global food crisis of 2007-08, we are concerned that such markets will not only shift the burden of mitigation

to developing countries, but will also adversely affect food security, and undermine many important efforts to deal with both climate change and rising global hunger.

Carbon and agriculture markets are tied together through futures markets. Big financial firms, many represented here in Tianjin, have positioned themselves to invest in carbon derivatives. These derivatives would be based on the value of carbon emissions permits—given to industry by governments—and of carbon offset credits. And these carbon derivatives could bundle together permits and credits with each other and with other commodities, such as oil or agricultural futures contracts.

Carbon derivatives would be created and traded under regulations that oversee all commodity futures contracts, which include agriculture, metals, energy and oil. And here’s the crux of the problem. These commodity futures markets have experienced a decade of regulatory exemptions, exclusions and waivers that have led to excessive speculation by big Wall Street players. The result has been enormous price volatility and harm to many around the world.

Excessive speculation by big financial firms, like Goldman Sachs, on commodity futures exchanges are now well recognized as major contributors to the global food crisis of 2007-08. The U.N. Commission on Trade and Development (UNCTAD), a recent FAO committee report on agriculture price volatility and the U.N. special rapporteur on the right to food have all stressed the need to address excess speculation on these markets by big financial firms.

How do these firms distort futures markets and what exactly are the effects? The big financial firms use two key tools to game the system. One, commodity index funds bundle together up to 24 futures contracts for all types of commodities. So, within one fund you might have derivatives for corn, gold and oil all together. Because financial firms, unlike commodity users, are not limited in the number of contracts they can hold, financial speculator “weight of money” (the sheer size of their holdings) drives the prices of the indexed contracts. As these contracts are sold and new contracts are bought, the “weight of money” induces enormous price volatility, far beyond what can be explained by commodities supply and demand. This price volatility is also replicated in global food prices—this is devastating for poor consumers and for the small farmers who produce most of the world’s food.

Carbon derivatives could also be bundled within a commodity index fund. The price effect of bundling contracts of consumable commodities and those of carbon, a wholly artificial and legislated commodity, can be difficult to predict. Legislation that allows the unlimited “banking” of carbon emissions permits could result in a periodic flooding of the market with permits. The resulting price drop would undermine the environmental objective of raising carbon prices to induce long-term industry investments in clean technologies. The current practice of trading carbon offset derivatives before the offset projects are verified to have reduced greenhouse gases could likewise result in price volatility, if the carbon asset underlying the derivative turns out to be fraudulent.

What would happen to agricultural contracts tied directly or indirectly to the vastly capitalized $2 trillion carbon market of 2017 forecast by the U.S. Commodity Futures Trading Commission (CFTC) under a mandatory U.S. carbon market scenario? The mostly likely outcome is that the bigger market drives prices in the much smaller agricultural markets. If agricultural futures prices return to their 2007-08 volatility, net import food–dependent developing countries would be unable again to forward contract food grains at reliable prices, leading to increased food insecurity.

A second way speculators take advantage of exemptions from commodity futures market rules is through over-the-counter (OTC) trading. These are unregulated private trades between firms, rather than trading on public and regulated exchanges. By trading over the counter, these financial firms are able to avoid regulatory scrutiny since OTC trade data are not reported daily to regulators,

as is required of regulated exchanges. By claiming that OTC trades are “customized” and that the data is confidential business information, OTC traders gain an unfair price information advantage over public exchange traders

OTC trading is already common on the European Emissions Trading Scheme—accounting for 44 percent of all carbon trades in 2008, according to Point Carbon. Trading under the ETS has resulted in high volatility and low carbon prices. Low and volatile prices have not has spurred big emitters to invest in greenhouse gas–reducing technologies and practices, as required by the ETS legislation.

UNFCCC Parties will be asked to consider adopting another variant on carbon trading as a major source of climate finance currently pushed by one of the largest carbon trading lobbies. The International Emissions Trading Association (IETA) is made up of over 170 financial, law, energy and manufacturing companies. They are leading advocates for carbon derivatives. Their most recent proposal for financing is something called green bonds. We believe green bonds are also extremely vulnerable to excessive speculation.

Under the IETA proposal, financial firms would loan developing countries money—through a green bond—to engage in a carbon-reduction project. The carbon credit that would result from that project would serve as the collateral for the bond. IETA proposes that international financial institutions guarantee project loans in case of a developing country default.

Once again, if a carbon market is highly volatile, the developing country may not be able to cover that loan through the sale of carbon offset credits or other revenues. So, we have a scheme that puts developing countries into debt while guaranteeing the investment of financial firms. All under the guise of addressing climate change.

On the issue of climate finance, we need to start a new conversation and be open to new proposals and ideas. We need to answer such questions as: Who should provide the financing to address climate change? Who oversees that money and decides how it is spent?

We believe that those who are largest polluters historically have a responsibility to be the largest source of climate finance in accordance

with the convention—and not just countries, but polluting industries as well. There are a variety of taxes being discussed including carbon, transportation and financial taxes. Those should all be on the negotiators’ table.

It is absolutely essential that climate finance investments do not undermine food security, e.g., by displacing farmers from their land. Our goals should be exactly the opposite: to support sustainable agriculture that improves our ability to adapt to climate change, reduces greenhouse gas emissions, increases food security and strengthens rural livelihoods.

We strongly oppose the World Bank’s involvement in controlling a climate finance fund. This proposal would divorce climate finance from the normative and technical agreements of the UNFCCC—a grave mistake. The World Bank has an unfortunate history in its involvement with the Clean Development Mechanism and other climate related projects—as well as being a leader in pushing for deregulation in the finance sector.

Instead, we believe the Adaptation Fund, within the UNFCCC’S Kyoto protocol, is the appropriate place for climate finance funds to be held and distributed. We also support the establishment of a new fund under the convention, as proposed by developing countries.

We are interested in working with others to develop new, creative ideas on climate finance. We believe that new approaches to climate finance will only succeed in addressing climate change if they are consistent with the convention and are transparent, inclusive and equitable.

We have materials on the table that go into more depth on the issues I’ve discussed today. You can find all of our materials on our website: www.iatp.org. Thank you! 

Andrew Ranallo

October 05, 2010

Debating climate finance in Tianjin

IATP President Jim Harkness and Senior Program Officer Shefali Sharma are in Tianjin, China this week monitoring the ongoing global climate talks that will serve as the final prelude to COP16 in Cancún later this year.

In a side event held today,Tianjin climate talks entitled “Carbon markets: A reliable and practical source of climate finance?” IATP hosted a panel to discuss public finance mechanisms, market and environmental integrity in carbon trading, and consequences for sustainable agriculture. A press conference will be held on Thursday.

IATP's Senior Policy Analyst Steve Suppan has also written a new paper addressing the U.N. Secretary-General's High-Level  Advisory Group on Climate Finance (AGF), entitled "Trusting in Dark (Carbon) Markets?" Read the press release below:

Climate finance can’t afford carbon markets

Influence of market speculators too risky for the future of the planet

TIANJIN, CHINA – A high-level advisory group to the United Nations will outline its draft proposals this week for financing efforts to combat global climate change. Carbon emissions markets are expected to be central in their recommendations. But carbon market prices would likely be too volatile to provide a reliable source of finance, and other options should be considered, according to a new analysis released today by the U.S.-based Institute for Agriculture and Trade Policy (IATP).

The United Nations Secretary-General’s High-level Advisory Group on Climate Finance (AGF) will present key elements of a draft report on October 7 at the U.N. global climate talks in Tianjin. The AGF will present a final report in Cancun, Mexico at the next Conference of the Parties (COP 16) meeting in early December.

The IATP paper, “Trusting in Dark (Carbon) Markets” by Steve Suppan, warns that carbon markets are vulnerable to excessive speculation by big financial firms. Those same firms wreaked havoc on agriculture markets in 2007-08, contributing to a sharp rise in global food prices and an increase in global hunger.

“The big financial players are lobbying governments to scale up the trading of carbon,” said Suppan. “But there is no independent evidence to show that carbon market price signals spur industry to make long-term investments in greenhouse gas–reducing technology. These big players are also lobbying for regulatory exemptions that would promote the carbon price volatility that delays or even drives away these investments.”

IATP President Jim Harkness and Senior Program Officer Shefali Sharma are in Tianjin to monitor the U.N. climate negotiations. IATP co-hosted an October 5 side event in Tianjin on climate finance proposals.

“Agriculture, particularly in developing countries, is the sector most vulnerable to the effects of climate change and badly needs transparent and predictable climate finance,” said Harkness. “A transition toward more sustainable practices will make agriculture, and livelihoods dependent on it, more resilient to climate change, reduce greenhouse gas emissions and strengthen global food security. We need to consider alternative climate finance proposals to make this happen.”

IATP has authored a series of papers on climate change, including “Speculating on Carbon,” “The New Climate Debt” and “Climate and Agriculture: A Just Response,” among others. For more, go to IATP’s climate and agriculture website.

Andrew Ranallo

September 29, 2010

Farmers' new normal

While floods from earlier this summer have receded in Iowa, rivers are bursting in Minnesota from last week's downpour of rain. Flooding, heat waves and other extreme weather over the last few months has had a devastating affect on agriculture in the U.S., Russia, Mexico, Pakistan, China and elsewhere. These weather events are consistent with global climate change—and they are not waiting for a new global climate treaty, or a U.S. climate bill.

In a commentary published in the Minneapolis Star Tribune today, IATP President Jim Harkness writes about the need to include farmers—on the front lines of extreme weather—in developing climate policy. Jim and IATP's Shefali Sharma will be in Tianjin, China next week at the UN climate talks, connecting with more farm organizations concerned about climate change. Read the full commentary in the Star Tribune.

Ben Lilliston

September 02, 2010

Flooding might be the ‘wave’ of the future

This commentary by IATP Senior Fellow Dennis Keeney originally appeared in the Ames Tribune. It is republished with permission.

“Living with floods involves two broad activities: better managing the risks and taking steps to reduce our vulnerability, and better managing the landscape to reduce the magnitude and destructive power of floods.” — Connie Mutel, Epilogue, “A Watershed year: Anatomy of the Iowa Floods of 2008.”

In the spring of 2010, The University of Iowa Press published “A Watershed Year: Anatomy of the Iowa Floods of 2008.” Connie Mutel edited this outstanding book. It should be required reading for those concerned with policymaking to address our recurring big floods. But we continue to battle day-to-day and event-to-event. Iowa State University officials talk of shoring up University Avenue in Ames, and the university and businesses clean up the damage. Who’s really hurt are the hundreds who have major property damage; basements, valuables and feelings of security are destroyed.

Are the Iowa cities that sit on large- or medium-sized river basins doomed to relive the experience of large floods regularly? No matter how much infrastructure we build to withstand the onrush of streams and rivers, flooding might be the “wave” of the future. In June 2008, the rivers of eastern Iowa created floods of epic proportions. In August 2010, the rivers of central Iowa did the same. What is going on? After the unprecedented statewide flooding of 1993, Iowans assumed we had seen the worst and returned to business as usual. How wrong can we be?

Rivers are not static. They are constantly eroding and reshaping their channels. When water flowing into the river exceeds the capacity of the channel, rivers use the naturally created floodplain to store the extra water. When rivers are denied access to the floodplain, or structures are built in the floodplain, we have a flood. Floods are natural, part of the water and biodiversity cycles. When we get in their way, damage occurs.

The climate of the Corn Belt is conducive to violent weather: high winds, tornadoes, blizzards, drought and intense rainfalls. The rainfalls seem to be the cause of much of our angst, especially recently. Reasons for the “unprecedented” floods include the possibility of major climate shifts, changes in land use, especially in agriculture, and lax urban building codes and poor storm management. I will take a quick look at these as space permits.

Probably the most sensible way to avoid flood damage is to get out of the way. But cities are not easy to move. Removing homes and businesses is a slow, expensive process, complicated by the private property ownership and by a multitude of government regulations. When public buildings are involved, such as Hancher Auditorium in Iowa City and Hilton Coliseum in Ames, public funds must be used to restore the buildings, diverting resources that are desperately needed for education and research.

A recent news release indicated a new Hancher will be built, presumably out of harm’s way, and Hilton Coliseum and presumably also the Scheman Center will be protected by higher flood barriers (levees), though the latter is not clear.

ISU’s proposed solution—deny the river its flood plain—is not really a solution. No doubt this would lessen flood damage to the ISU complex, but it would certainly increase flooding in other areas of the flood plain with unpredictable results. The river will have its way.

A better alternative, but one that might now be impractical, is to increase storage on the land. Laura Jackson, a professor of biology at the University of Northern Iowa, and I discuss this approach in chapter 24 of the book I referred to earlier. Most of the watershed above Ames is agricultural. It has been altered in ways that lower the retention of water and hasten flash floods. Tile drainage, wetland and prairie destruction, stream channeling, and, of course, the annual corn and soybean cropping all hasten the movement of water through the watershed.

Similarly, Ames, and most other cities, was not designed with floods in mind. Water runoff must be decreased relative to infiltration in both urban and rural landscapes. Our manicured, reconstructed lawns are nearly as impermeable as the concrete they drain into.

Changing our urban and rural landscapes is daunting. Some regions have gone together to plan for flood mitigation. A regional flood control effort for the Story-Boone County region could identify new roads and bridges that could be designed to provide storage and locate flood plains where flood levees could be removed, giving the river a chance to recover its flood plain.

Finally, are flood frequencies and intensity partly a result of climate change? Eugene Takle examined this question in a remarkably clear manner in his chapter of the “Anatomy of the Floods” book mentioned previously. Cedar Rapids’ average annual rainfall has increased more than 9 inches over the past 113 years and now stands at 37 inches per year. More rain is falling in the late winter, spring and early summer and rainfall events are becoming more intense. These trends were predicted by climate models, and they likely will continue in the foreseeable future. Takle writes that “the dice have been loaded toward a higher probability of extreme flood events.” Now with three major floods in 17 years, it would seem public and private decision makers should take heed.

In summary, floods will happen. Climate change will likely cause further increases, and our rural and urban landscapes have been so modified as to make lessening the impacts of floods difficult. History tells us we will recover from the floods, get enough federal aid and insurance money to repair the damage, and move on with little thought to the next flood. We deserve better.

Dennis Keeney was the first director of the Leopold Center for Sustainable Agriculture and is an emeritus professor at Iowa State University. He resides in Ames and can be reached at earthwatch@mchsi.com.

Ben Lilliston