On 2 November 2004, tens of millions of people around the world were transfixed by the drama unfolding in the US elections. Many of us stayed up all night watching random states flicker blue or red on the map, hoping a change in the political direction of the world's most powerful country would be revealed. It was not to be.

Only a few days later, however, a break in the clouds seemed to appear over the former superpower - Russia. After much wrangling, the Russian Government finally ratified the Kyoto Protocol, enabling the UN climate change treaty to enter into force. The Russian decision was all the more remarkable given that it was under intense US pressure not to ratify. Even President Vladimir Putin's top economic advisor, Andrei Illarionov, asserted that Kyoto would kill the global economy 'like an international Auschwitz'.

Others took a very different view. Greenpeace hailed the Russian decision: 'We will look back on today as the moment in history when humanity faced up to its responsibility.' Kofi Annan described it as an 'historic step forward in the world's efforts to combat a truly global threat'. The Protocol now appears to be firmly back on course, after the Bush Administration's infamous withdrawal from the treaty, followed shortly after by Australia.

The situation we are faced with is, indeed, truly dire. A new study of the Arctic has found that in the past 30 years, temperatures there have risen 4.4 degrees centigrade and the average thickness of ice has halved. Another report found an unexplained 'spike' in carbon dioxide in the atmosphere, raising concerns that the earth's carbon-cycling capacity has been pushed past its limits. Scientists from Oxford University and the British Meteorological Office have warned of a likely increase in devastating heatwaves, such as the scorcher that hit southern Europe in 2003 which led to 20,000 deaths. There is now an emerging consensus among scientists that all these events bear an unmistakable ' human signature'. Given all we know, urgent action is required if we are to avert impending ecological and social crisis.

Much ire has rightly been focused on the US and climatesceptic corporations such as Exxon/Esso. But less attention is given to the damage done to the Kyoto Protocol by those countries and corporations who do endorse it, aided by the UN itself. Ideally, the UN should be leading the way towards ending our addiction to fossil fuels, limiting corporate power, addressing the debt crisis and recognizing the ecological debt that the over-consuming North owes the South. It is, however, unlikely to do so.

Any effort by governments to ' do something' about climate change is, of course, welcome - and the Kyoto Protocol is perhaps the most seductive 'something' we have. Of all the UN's treaties and conventions, few have achieved such wide public exposure. Right-wingers and some business groups may demonize it, but it still gives the UN and anyone endorsing it - including business - positive 'brand value'.

Hoodwinked in the hothouse

But scratch beneath the surface and the rust begins to show. Most environmental groups readily admit that Kyoto is only the 'first step' towards resolving climate change. Its meagre first-round target of reducing greenhouse gas emissions by 5.2 per cent below 1990 levels stands in stark contrast to the 50-70 per cent recommended by the UN's own scientific panel. During the initial negotiations large parts of the agreement were tailored to accommodate countries - such as the US and Australia - who now no longer intend to ratify. Russia's dilly-dallying helped it to gain more concessions and weaken the treaty even further.

Thanks to intensive corporate lobbying, 'flexible mechanisms' such as emissions trading - which allow countries and corporations to trade the 'right to pollute' - have created a new market literally out of thin air. The lion's share of pollution quotas have been ceded to the very same actors who have propelled us towards climate disaster. The World Bank has positioned itself at the heart of this carbon market, while hypocritically continuing to fund hundreds of new fossil fuel projects a year.

The Protocol has spurred investment in unsustainable projects such as monoculture tree plantations in Brazil which have driven local people off their ancestral land while the corporations promoting such practices have been rewarded with the prospect of 'carbon finance'. The UN recently approved the use of genetically modified trees as ' carbon sinks'. All of this is being done under the rubric of Kyoto's ' Clean Development Mechanism'.

In the early 1990s, prior to the original Earth Summit, the UN Conference on Trade and Development (UNCTAD) quietly launched its Greenhouse Gas Emissions Trading Project just as governments were beginning to develop initial proposals on how to tackle climate change. UNCTAD's new office set itself the task of influencing these proposals to ensure that market-based mechanisms took centre stage.

UNdue influence

UNCTAD, whose mandate is to assist developing countries, admitted that its research focus was 'limited to the emerging carbon market', despite the fact that there was little support for this among developing countries. This approach was characteristic of the UN at the time. Canadian business leader Maurice Strong, placed at the helm of the 1992 UN Earth Summit, was roundly criticized at the time for his pro-corporate bias. He has since helped to found the precursor to one of the most powerful corporate lobby groups active in the UN system - the World Business Council for Sustainable Development. Strong's influence continues to this day - the UNCTAD project is now called the 'Carbon Market Programme' and is a joint initiative with his Earth Council Institute.

Just as the UN was caving in to business pressure and dismantling its efforts to regulate corporations, the new corporate 'partnership' ethic began to take hold. Seeing how effective corporations were, UNCTAD actually set up a corporate lobby group to help it ensure that emissions trading was central to UN policy-making on climate change. To this day, the International Emissions Trading Association is one of the most active lobby groups in the negotiations. The group includes the world's worst polluters, such as BP, Shell, Unocal, Lafarge, Dupont and ChevronTexaco, and works tirelessly to ensure that corporatefriendly policies are at the heart of government action. It has the UN to thank for its success.

As public opinion in favour of taking action began to mount, so too did corporate efforts to prevent any binding regulations. Formal proposals for pollution trading and other market-based mechanisms were soon being seriously discussed in the mid-1990s, just as the environmental movement was gaining ground. The message from industry was clear - let the market decide, or do nothing at all. The US and a few other countries soon became strong advocates of a global carbon market, building on the foundation laid by the UN itself.

Greenhouse gravy-train

Some of the strongest corporate backers of the carbon market in the US included the disgraced Enron and its partner-in-crime Andersen. In a classic revolvingdoor scenario, the former head of UNCTAD's Greenhouse Gas Trading Project, Frank Joshua, is now head of Greenhouse Gas Trading Services at Andersen. The accountancy firm expects to cash in on a multi-billion-dollar market in carbon credits based on dubious accounting rules Joshua himself helped to enshrine in the UN.

The climate negotiations now have the flavour of a typical World Trade Organization meeting replete with all the impenetrable language and blatant power politics. Corporate fairs and sideevents are now commonplace at the talks where some of the largest greenhouse gas emitters impress delegates with powerpoint presentations and slick brochures. A typical UN climate conference now attracts upwards of 1,000 professional corporate lobbyists working tirelessly to ensure business priorities win the day.

Companies aren't so much 'going green' as 'seeing green' - finding new ways to exploit the market, deploying carbon hedge funds, ' emissions brokerage' services, carbon derivatives trading, climate exchanges and all the accoutrements of finance and capital which dominate the world today.

In Britain, which developed the first ever national greenhouse gas trading scheme, nearly half a billion dollars of taxpayers' money has been transferred to corporations as an 'incentive' to participate. Notorious polluters have received hundreds more millions in generous tax credits and profits from the sale of bogus carbon credits. The British experience may be a sign of worse things to come.

Perhaps the saddest aspect of the climate treaty is the amount of time, energy and resources it has taken to negotiate it. Climate activist Larry Lohmann of the Corner House put it succinctly: 'Shortly after the treaty was initialled in 1997, a scientifi c journal pointed out that 30 Kyotos would be needed just to stabilize atmospheric concentrations at twice the level they stood at, at the time of the Industrial Revolution. At this rate, 300 years of negotiations would be required just to secure the commitments necessary by the end of this decade.'

The bias of the UN is less about succumbing to corporate pressure and more about pursuing corporatefriendly solutions as a matter of course. As a forum for discussion and setting of lofty ideals - such as the Universal Declaration of Human Rights - the UN is at its best. As an institution seeking to implement those ideals, it quickly morphs into a den of horse-traders and technocrats. The UN then resigns itself to brokering democracy itself, letting corporations and powerful countries dominate the agenda and reap the most benefits. As a result, Kyoto has little to do with the environment and everything to do with 'managing' climate change. It is this intellectual corruption of the process which is, in the end, the UN's most direct responsibility and its most glaring failure.

Adam Ma'anit is an NI coeditor and research associate of CarbonTradeWatch, a project of the Transnational Institute.

This article is from the January-February 2005 issue of New Internationalist.

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