IETA puts the 'corporate' into COP20 – but will Lord Stern legitimise it through speaking?

The presence of polluters in COP20, this year's UN climate talks in Peru, is far less evident than the excesses of last year. That is, until you visit the pavilion of the International Emissions Trading Association (IETA), sponsored by Shell, Chevron, GDF Suez, the Global Carbon Capture and Storage Institute, and the like. Through its packed calendar of dedicated side events – 64 over the two weeks of the summit – the IETA ensures dirty energy lobbyists and their false solutions get to present themselves as part of the solution, not just by wrapping themselves in the colours of the UN, but also via the credibility of many high profile speakers, including UN climate chief, Christiana Figueres and – surprisingly – Lord Nicholas Stern. Should he know better?

The International Emissions Trading Association

The main lobby group for carbon markets, the IETA has around 140 members, ranging from big polluters like BP and Alstom, big banks like Goldman Sachs and JP Morgan Chase (who are also big investors in fossil fuels), consultancies such as Ernst&Young and PricewaterhouseCoopers, and carbon trading companies like EDF Trading. Since its inception in 1999, it has grown into a carbon market lobbying powerhouse, consistently being the largest delegation at a COP (almost 500-strong at COP15 in Copenhagen). Its chairman until recently was Shell's David Hone, while its CEO is Dirk Forrister, who has spun through the revolving door between the private and public sector many times (including for Bill Clinton's Climate Change Task Force) but in fact began with US NGO the Environmental Defence Fund. IETA's list of directors include Enel, Rio Tinto, Chevron, Bank of America Merrill Lynch, and GDF Suez among others.

It has consistently pushed for the expansion of carbon markets, presenting them as the 'policy instrument of choice' to address the climate crisis, despite a lack of agreement among countries, and despite the collapse in carbon price and these markets' failure to deliver. At last year's talks in Warsaw, there was enough opposition that IETA's plans for a new market mechanism (or a global carbon market under the so-called 'framework for various approaches') were shelved. Unfortunately they've been put back on the table again, although countries may once more fail to reach an agreement. But that hasn't stopped the IETA – and Christiana Figueres when she was 'in conversation' with CEO Forrister – from calling for more markets and pushing for them in every possible place in the negotiations.

IETA at COP20 in Lima

According to one of the staff at their (rather pokey) pavilion, the delegation this year is 'only' just shy of a hundred, due to restrictions from the UNFCCC. However, last year in Warsaw they also had an extra member on the Kazakhstan delegation. But that means their members and sponsors get accreditation. The list isn't yet public this year, but last year saw them give inside access to PricewaterhouseCoopers, Statoil, Enel, Vattenfal, and Dow Chemicals among others (although Shell's David Hone was accredited via the World Council for Sustainable Development, co-founder of the IETA). Is that how Chevron was allowed to wander into the Canadian delegation 'stakeholders' meeting and lobby both governments and NGOs? A company who has enlisted Hilary Clinton and the State Department to promote fracking around the world in order to overcome local opposition shouldn't be in the talks, or anywhere near policy makers.

The badges provide one form of access, but the 60+ events they throw means some of the bigger political names will be accessible to their members. When the head of the UN climate talks, Christiana Figures spoke, she waxed lyrical about markets and reassured the audience on how essential they were (some might go so far as to question her objectivity as UNFCCC Executive Secretary when some countries are trying to push back). When sitting in an event, one can hear the music from the neighbouring pavilions: incredibly, just behind the IETA is the indigenous pavilion, representing many of the communities suffering at the hands of IETA's members, either through carbon markets or their core dirty business models.

Why bother with renewables when we have Carbon Capture and Storage (CCS)?

Looking more closely at a few specific events, the real agenda of the IETA is clear: continuation of business as usual for it, and its energy intensive members. One session explores the idea of unburnable carbon, the carbon bubble, and stranded assets – which refers to the fact that we need to leave 80% of all known fossil fuel reserves in the ground if we want to stay below two degrees of average warming. The event is on Saturday, but as the panel is chaired by global oil and gas industry association IPIECA, and includes Chevron (continuing to expand fossil fuel exploration and extraction), Italian energy firm Eni (trying to drill in the Arctic) and speakers from various carbon capture and storage institutes, the outcome is not in doubt. The blurb makes that clear: the event is trying to explore some of the “arguments and assumptions involved in these concepts” and putting them into “a wider perspective of the future energy system”, ie that with CCS we can keep burning oil and gas because they bring “modern living standards and economic growth”. So we really don't need to move away from fossil fuels?

Despite the fact that CCS technology is expensive, experimental and at least 15-years from commercial readiness, worryingly, these messages are being echoed in the highest places: a recent side event by the intergovernmental panel on climate change (IPCC) – who produce the climate science the UNFCCC is supposed to work from – invited Shell to present its ideas on CCS, while the UNFCCC also had Shell presenting at a day of negotiations dedicated to CCS. But the biggest worry is how this is being taken up by our governments, eager not to upset business. It is from them – the UK, the EU, the US, Japan, Australia – that the biggest pressure arrives.

Why divest from fossil fuels?

A session the following Monday, entitled “Why Divest From Fossil Fuels when a Future With Low Emission Fossil Energy Use is Already a Reality”, is equally surprising to find inside the climate talks. In short, keep burning fossil fuels (using unproven CSS technology) and don't shift to renewables. Business as usual. It is far easier for IETA's members to promote CCS than have to change their core business models, but currently it is the taxpayer who foots the bill of failed experiment after failed CCS experiment, with energy companies allowed to continue extracting in the faint hope that at some point in the future the technology will be ready and can then be retrofitted.

But is climate change just about emissions? Is the problem with fossil fuels limited to climate change? Speaking on the panel will be Shell's David Hone, who has claimed many times before that CCS will allow them to continuing digging up the Alberta tar sands in Canada, one of the biggest environmental disasters in the world. It has also impacted local indigenous communities, and the same happens everywhere extraction takes place: human rights abuses; land grabs; environmental destruction. From the Yasuni in Ecuador to the Ogoni people in Nigeria, dirty energy extraction has caused nothing but social and environmental conflict at the local level, aside from the catastrophic impact it has on the climate. Many of the communities affected by the operations of IETA's members will be present at the COP itself, and yet they will have to put up with seeing the same destructive corporations presenting themselves and their business model as being the way forward.

Tackling the climate crisis is about far more than a scientific calculation of emissions in the air, it is about who is affected and who is responsible, who benefits from the 'solutions' and who doesn't. The fossil fuel industry supply chain has a devastating effect on local communities and their territories, but so do large-scale renewables projects, which are more often than not intended for export rather than to meet the energy needs of local populations. That's why decentralised, community-owned and controlled renewable energy has the potential to challenge both the climate crisis and the power structures underpinning it, as well as providing energy access and accelerating development. That's why the Africa Group has put forward a proposal within the negotiations for exactly that sort of energy model, with global climate finance to accelerate it.

Stern words

Surprisingly, at the Monday event which claims we don't need to move beyond fossil fuels, the UK's Lord Stern is set to speak. His groundbreaking study in 2006 made the strong economic case for action now rather than later (governments ignored it all the same), and he currently heads up the influential Grantham Research Institute on Climate Change and the Environment. Yet he's on a panel alongside Shell and the infamous World Coal Association, who organised the controversial International Coal and Climate Summit last year in Warsaw. The blurb warns against moving away from fossil fuels, and makes the claim that fossil fuels are necessary for poverty eradication – which they're not. Even if his research institute (and maybe he himself) thinks CCS is feasible in the near-term (despite the costly failed experiments and the fact it won't be commercially viable until the medium- to long-term), this event is intended to do little more than endorse the World Coal Association (WCA) agenda of continued coal use through CCS. Speaking alongside them will also be the Global Carbon Capture and Storage Institute, set up by big mining and energy companies.

By speaking, Stern gives all involved – and particularly the WCA – the veneer of respectability they received when Figueres spoke at their International Summit last year. It would be a gift for the IETA and the WCA, but there's nothing to be gained from his side. If the intention is challenging them, it's a lost cause. The room is tiny – maximum 30 people – and no-one outside the room will hear about it. Instead, IETA and the WCA will write it up, pull out a nice quote and show how they've engaged and even won-over serious climate change thinkers. His name will forever be there, associated with organisations who are stopping progress on tackling the crisis. Should he even be attending? Christiana Figueres' attendance at the coal summit didn't weaken the industry, it legitimised them (she said they had an important role to play and that they were key for development). At least since then she has taken a tougher stand against coal, perhaps as a result of the backlash.

Stern should set example to us all

If Lord Nicholas Stern decided not to go, it would send a strong signal to those very industries undermining the effort to tackle the crisis. It would question their legitimacy and stop their march towards the heart of our governments with false solutions like CCS. If we're going to tackle climate change, then we need to delegitimise the role that dirty industry currently plays, remove its access to power and channels of influence it has with our governments. And as an influential person himself, with strong climate credentials, Lord Stern has an important role to play. Those fighting against lung disease would not speak at a tobacco event, so Stern should should do the right thing and not attend this one.


Carbon Trading

It seems that you do not know of Lord Stern's activities in the carbon trading field. He was until not long ago a senior figure and advisor to Idea Carbon, a company advising financial institutions on carbon markets. He is also an advisor to HSBC bank on carbon trading.

Christiana Figueres was also a consultant with Lord Stern's company. From 2008 to 2010, she was Vice Chair of the Rating Committee, Carbon Rating Agency, described on her web site as the “first entity to apply credit rating expertise to carbon assets”.

The Carbon Rating Agency is a subsidiary of IdeaCarbon who say about themselves, “our unique access to some of the most influential decision-makers in the carbon and environmental community, gives us the possibility to foresee important regulatory and market trends and thus allow clients to have unparalleled views and advice on climate issues and debates.” IdeaCarbon is based in the Isle of Man, a tax haven.

The Carbon Rating Agency openly boasts of its highly influential management team and ratings committee: “which includes ratings experts, financial market professionals, UN climate change negotiators and former senior managers from development agencies such as the World Bank, a combination which ensures that the full range of risks facing carbon projects are taken into account by the ratings process.”

Lord Stern joined IdeaGlobal, the parent company of Idea Carbon, in 2007, as Vice Chairman. The Grantham Institute was set up in 2008 by Jeremy Grantham, chairman and co-founder of GMO, a $140 billion global investment management company based in Boston with offices in London, San Francisco, Singapore, Sydney and Zurich.

A fellow adviser at IdeaCarbon was Dr Samuel Fankhauser, who is also a colleague of Lord Stern at the LSE Grantham Institute. Fankhauser is also on the UK Climate Change Committee and its Mitigation sub-committee. He participated in the 1995, 2001 and 2007 assessments of the IPCC.

Another IdeaCarbon colleague of Lord Stern was Mr. Nitin Desai, a Special Advisor to the UN Secretary General on Internet governance and chair of the Advisory Group that organises the annual UN Internet Governance Forum. He is an Honorary Fellow of the LSE and former Under-Secretary-General for Economic and Social Affairs of the United Nations from 1997 to 2003.

In India, he is a colleague of IPCC chair Dr Pachauri, as a “Distinguished Visiting Fellow” at The Energy and Resources Institute (TERI) and advises the Indian Government on its national climate change action plan.

Christiana Figueres was also a Senior Advisor to C-Quest Capital, “a carbon finance business dedicated to originating and developing high-quality emission reduction projects around the world. We invest in carbon assets that generate not only superior returns but also concrete benefits to the environment. Founded by Ken Newcombe and Matthew Mendis in 2008, CQC is headquartered in Washington, D.C. with offices in Australia and Malaysia and a presence in India.”

Ken Newcombe, CEO was, from 2006 to 2007, Vice Chairman of Climate Change Capital in London, which manages the largest private sector carbon fund in the world.

“Before joining the private sector, Newcombe led the development of the Prototype Carbon Fund, a public-private partnership of the World Bank which pioneered the global carbon market and managed the growth of World Bank’s carbon finance business to eight carbon funds, with approximately a billion dollars under management for investment in carbon offset projects and laying the foundation for additional funding of the same order.”

Executive Director and Vice Chairman of Climate Change Capital, James Cameron, is a member of GE's Ecomagination board, Pepsico UK's advisory board, chairman of the World Economic Forum's Agenda Council on Climate Change, a trustee member of the UK Green Building Council and the Carbon Disclosure Project and was at one time, a member of the Prime Minister's Business Advisory Group.

Lord Stern is on the International Advisory Board of the Global CCS Institute. I think his "strong climate credentials" are perhaps not so strong as one might think.

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