MAC: Mines and Communities

CARRYING CARBON TO COPENHAGEN: EU & UK

Published by MAC on 2009-12-14
Source: Planet Ark, Sunday Times, Independent (2009-12-11)

Regional mining profile #1

Marketing of carbon emissions' permits (the ETS - Emissions Trading Scheme) is at the root of the European Union's programme to reduce global greenhouse gas emissions (GGE).

The scheme is widely criticised as flawed, if not actually fraudulent.

The ETS is a "cap and trade system", introduced by the European Union in 2005. Under it, industry participants can buy and sell emissions allowances within an overall limit or “cap”. 

The theory is that CO2 emissions would thereby be reduced, and incentives created for "climate-friendly" innovations (such as renewable energy schemes) in order to propel polluting industries onto a low carbon path. Until 2011, a large number of these allowances would be handed out for free. From 2012, the polluters will have to pay for them as they are auctioned off.

Although the steel industry is the second biggest industrial GGE (global greenhouse gas emissions) culprit within the European Union, pressures by the sector have resulted in its obtaining large numbers  of free emission permits.

There's been similar intensive lobbying by other energy-intensive industries, notably the cement manufacturers, Lafarge and Holcim, backed by what's left of Europe's coal mining industry.

This has "...allowed industry to avoid making the structural changes needed and has in the case of the power sector, led to huge windfall profits, as a result of companies passing on the theoretical costs of emissions permits to consumers."

That's a conclusion reached by the Corporate European Observer (CEO) in a study published on December 7th. The CEO also points out that: "The impacts of the EU ETS extend well beyond its borders, as it is being used as a model for other cap and trade systems, such as [by] Australia or the US." See: http://www.minesandcommunities.org/article.php?a=9714

Says the CEO: "It is time to change course and enforce binding regulations to reduce emissions at source, with no offsetting, no trading and no get-out clause". (See full report below).

The Big Steal

According to another recent study, just one steelmaker - ArcelorMittal, owned by Britain's richest individual, Lakshmi Mittal - stands to gain £1 billion by selling-on carbon permit, or hoarding them for future use instead of auctioning them.

"ArcelorMittal was given the right to emit 90m tonnes of CO2 each year from its plants in the EU from 2008 to 2012", claims Sandbag, a UK group which aims to improve carbon trading.

The company emitted just 68m tonnes last year, largely due to a contraction in demand because of the recession; this year its emissions are predicted to plummet to 43m tonnes.

However, ArcelorMittal has been granted the "right" (sic) to spew out 90 million tonnes a year until 2012, backdated to 2008.

Indian company, Tata, through its wholly-owned subsidiary, Corus (soon to be renamed Tata Steel Europe) is Europe's second biggest steel producer after ArcelorMittal.

But, due to rising debt, Tata's key British plant on Teesside in northern England is about to be mothballed, with the loss of 1,700 jobs.

Understandably, trade unionists are outraged at the decision - especially because, prior to Tata's takeover of Corus in 2007, its Indian management seemed to assure British workers that they wouldn't be made redundant. See:
http://www.minesandcommunities.org/article.php?a=823

Under the EU pollution "give-away" scheme, Tata was due to receive 7 million free permits (worth around US$ 147 million).  Now, with the likely long-term closure of the Teesside plant, the company won't be able to claim them.

Instead of cancelling the permits, the UK government proposes to sell them on the open market - something which superficially conforms to the EU's auction policy.

But this proposal has outraged environmentalists who say it won't protect jobs, or help finance alternatives to continued reliance on coal.

In a commentary last week, in British news daily, The Independent, Johann Hari underscored the distinctly shaky reasoning behind the ETS: "If Britain pays China to abandon a coal power station and construct a hydro-electric dam instead, Britain pockets the reduction in carbon emissions."

In return, said Hari, "we are allowed to keep a coal power station open at home. But at the same time, China also counts this change as part of its overall cuts."

UK To Cash In On Closed Steel Plant Carbon Permits

PlanetArk

10 December 2009

LONDON - Britain's climate efforts were questioned on Wednesday after it said it would auction off rather than cancel millions of carbon permits to come from a closed steel plant, equal to one percent of UK greenhouse gas emissions. [between 2006-2008]

The government said cancelling the European Union permits, allocated to a plant owned by Europe's second largest steelmaker Corus in northeast England, would be a "lengthy process" so it would instead sell the annual rights to emit nearly 7 million tonnes of carbon dioxide back to industry.

"There's a lot of paperwork around it, so the current intention is to auction them," a UK Department of Energy and Climate Change (DECC) spokeswoman told Reuters.

DECC said that regardless of the closure, the UK was on track to meet its goal to cut emissions by 80 percent by 2050 and did not need to "change rules or cut corners."

Environmental groups were outraged by the news.

"It's not just hypocritical, it's downright rude that for the sake of bureaucracy the UK can't be bothered to cancel these permits," said Sanjeev Kumar of green group WWF.

The Teesside plant is scheduled to be mothballed in late January and DECC said if the facility is to be closed for more than 50 days, Corus, owned by India's Tata Steel, is not entitled to receive the permits, worth around 100 million euros ($147.5 million) per year at current market rates.

This comes as Prime Minister Gordon Brown prepares to push rich and poor nations next week to accept deep emissions cuts under a new climate deal at United Nations talks in Copenhagen.

"If the UK wants to show international leadership on climate change, that starts at home and this is the easiest first step," Kumar added.

Under the EU's Emissions Trading Scheme, the bloc's flagship weapon in its fight again climate change, heavy polluters are given permits by government, most of which are free, and must submit one for every tonne of carbon dioxide emitted.

"Our national allocation plan, as approved by the European Commission, dictates that the credits go back into the auction pot when plant closures occur," the DECC spokeswoman said.

"This is an EU-wide process and this is how we follow it."

WWF's Kumar said the process was not overly complicated and that several EU member states have already retired permits.

NO MONEY FOR CLIMATE, JOBS

Britain's 2008 greenhouse gas emissions were 623.8 million tonnes of carbon dioxide, according to provisional statistics published by DECC last March.

Even though the Teesside plant's annual emissions were 6.2 million tonnes of CO2 between 2006-08, Corus was due to get 7 million free permits per year to 2012, Reuters data showed.

In cancelling Teesside's permits, the UK could realize up to a one percent cut toward its 2050 emissions goal by ensuring these gases never hit the atmosphere.

But if auctioned, like the government's special reserve of around 77 million permits due to be sold by 2011, the proceeds would go to Treasury coffers rather than being earmarked to fighting climate change or creating jobs.

Corus said on Friday 1,700 jobs will be cut at Teesside. No more steel will likely be produced after the firm failed to secure a long-term partner for the site's output.

Corus said some operations will be maintained next year but a company spokesman could not confirm the carbon emissions of the remaining operations or how many permits, if any, the plant expected to receive in 2010.

(Editing by Keiron Henderson)

© Thomson Reuters 2009 All rights reserved


Carbon credits bring Lakshmi Mittal £1bn bonanza

By Jonathan Leake and Bojan Pancevski

Sunday Times

6 December 2009

LAKSHMI MITTAL, Britain's richest man, stands to benefit from a £1 billion windfall from a European scheme to curb global warming. His company ArcelorMittal, the steel business where he is chairman and chief executive, will make the gain on "carbon credits" given to it under the European emissions trading scheme (ETS).

The scheme grants companies permits to emit CO2 up to a specified "cap". Beyond this they must buy extra permits. An investigation has revealed that ArcelorMittal has been given far more carbon permits than it needs. It has the largest allocation of any organisation in Europe.

The investigation has also shown that ArcelorMittal and Eurofer, which represents European steel makers at European level, have lobbied intensively in Brussels. This has included threatening to move plants out of Europe at a cost of 90,000 jobs, and asking European commissioners to meet Mittal.

ArcelorMittal is now free to sell its surplus permits on the market or to hoard them for future use. The latter would allow it to avoid cutting greenhouse gas emissions for years, effectively undermining the point of the scheme.

Either way, the company will have gained assets worth around £1 billion by 2012. The eventual value could be much greater. Each carbon permit is currently worth about £12.70 but the European Union has said it wants to drive this price above £30.

The disclosure comes on the eve of the Copenhagen climate conference, whose main aim is to extend schemes such as the ETS into a global system for trading carbon.

Details emerged from an analysis of the community independent transaction log, the EU system for logging the carbon permits issued to factories and power stations covered by the scheme in Europe.

Anna Pearson, an expert on the ETS who carried out the analysis, said: "Between 2008 and 2012 ArcelorMittal stands to gain assets worth £1 billion at today's prices for scant effort. For them, the ETS has been turned into a system for generating free subsidies."

ArcelorMittal, which is based in Luxembourg and has more than 80 steel plants around Europe, has confirmed Pearson's figures. The ETS covers 10,000 industrial installations, responsible for 40% of the EU's greenhouse gas emissions.

"Following intense lobbying and claims that the scheme would harm business, the cap on emissions was set too high and too many permits were issued," said Pearson, who performed her analysis for Sandbag, which campaigns to improve carbon trading.

ArcelorMittal was given the right to emit 90m tonnes of CO2 each year from its plants in the EU from 2008 to 2012. However, the company emitted just 68m tonnes last year. That was partly due to the recession, but Pearson believes its allocation of 90m was already too generous. This year ArcelorMittal's emissions are predicted to plummet to 43m tonnes.

A spokesman for the company said: "The extra surplus arose when actual steel production fell way below forecasts because of the unexpected global economic crisis. As the world returns to growth, we expect to use them up."

However, Pearson estimates that by 2012 the company will have accumulated surplus permits for 80m tonnes of CO2 - equivalent to the pollution generated annually by the whole of Denmark.

Details of ArcelorMittal's lobbying emerged from freedom of information requests made by Corporate Observatory Europe to the European commission. They include two letters from Mittal himself, in December 2006 and April 2007, requesting meetings with Günter Verheugen, the commissioner for enterprise and industry, and Stavros Dimas, the environment commissioner.

In another, in January 2008, ArcelorMittal threatened to relocate if made to pay for carbon certificates.

The business is 43% owned by Mittal, who tops The Sunday Times Rich List with a fortune of £10.8 billion. He lives in a Kensington mansion bought for £70m in 2003.

The revelations support the criticisms of carbon trading by Professor Jim Hansen, director of Nasa's Goddard Institute for Space Studies, who supports the alternative idea of a direct tax on carbon. He said: "The corporates see emissions trading as a huge opportunity to boost profits."

Pearson said she had written to Mittal on behalf of Sandbag asking if ArcelorMittal would "retire" the carbon permits - meaning they could not be used by anyone else.

"If the company were to rip these up it would be a great act of philanthropy and set an excellent example," she said.

An ArcelorMittal spokesman said: "ArcelorMittal's surplus carbon credits are an asset which will only grow in importance," he said.

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The EU: a hollow champion for the climate.

How the financial crisis (and intense lobbying) let polluting industry off the hook

Corporate European Observer

7 December 2009

The EU has cultivated an image of being a leader in the fight against climate change
at UN climate summits. But as the UN talks in Copenhagen get underway, a closer
look at the EU's climate policy reveals fundamental failings. The EU's flagship climate
policy - the Emissions Trading Scheme (ETS) has been once more effectively
undermined by industry lobbying for the right to pollute for free. The most polluting
industries, including chemicals, cement and steel, have secured free permits to
pollute for at least the next decade. This sends a dangerous signal to other countries
about the need to regulate polluting industry, and undermines a major argument for
emissions trading - that of putting a price on carbon.

According to the EU Commission, the ETS – a cap and trade system introduced in
2005 in which industry participants can buy and sell emissions allowances within an
overall limit or “cap” - is the main way to achieve carbon dioxide (CO2) emissions
reductions in the EU. The idea is that it reduces CO2 emissions and creates
incentives for climate-friendly innovations and so moves industry onto a low carbon
path.

Yet, despite the claims, it has failed to do so. The main reasons have been that
industry has been given more emissions permits than it needed, resulting in major
falls in the carbon price, and it has been allowed to “offset”, to get credits by investing
in projects in third countries instead of reducing emissions at source. This has
allowed industry to avoid making the structural changes needed and has in the case
of the power sector, led to huge windfall profits, as a result of companies passing on
the theoretical costs of emissions permits to consumers.

In 2007-08, the ETS was reviewed ahead of setting conditions for the third phase
(from 2013 to 2020), which were to be included in the EU's so-called climate and
energy package.

A crucial part of the proposal for the third phase was the introduction of auctioning -
forcing industry to bid for emissions permits - and enlargement of the ETS to other
sectors which had not previously been covered by the scheme. Until now, permits to
pollute have been handed out for free. For the period post-2012 the European
Commission proposed full auctioning for the power sector and the gradual
introduction of auctioning for the manufacturing sector, including the chemical
industry, steel and other energy intensive industries.

This ignited a fierce lobby campaign by the affected sectors. Refineries and the cement, steel and chemical industries were among the more vociferous in making their claims. They argued that auctioning permits would increase costs and threaten their survival, forcing them to relocate to countries with less strict regulations. According to them this would mean continued and even increasing CO2 emissions (so-called carbon leakage) as well as job losses in Europe.

Using EU access to information regulations, Corporate Europe Observatory has
obtained evidence of the extensive lobbying that went on in numerous meetings and
through correspondence between the energy intensive industries and the
Commission, particularly DG Enterprise, DG Environment and to a lesser extent DG
Transport and Energy and the Commission President Barroso.

The cement industry,represented by Cembureau and individual companies including Lafarge and Holcim played a key role, as did the steel sector, represented by Eurofer and especially ArcelorMittal. Chemical companies such as BASF – and the lobby group CEFIC, were also actively involved.

The oil companies, represented by Europia were particularly effective - arguing
against initial proposals to treat refineries in the same way as the power sector -
which would mean they had to pay for all permits from 2013. They successfully
lobbied to be put on a level with the manufacturing sector - claiming they would not
survive competition from abroad.

These voices were also echoed by other groups with privileged access to decision
makers, particularly the European employers' confederation Business Europe and
others such as the European Roundtable for Industrialists (ERT), the Alliance of
Energy Intensive Industries (AEII) or the EU Committee of the American Chamber of
Commerce (AmCham).

Industry wanted a guarantee that they would get free allocations, but initially the
Commission said it would not consider the risk of carbon leakage until after the
Copenhagen climate summit to avoid influencing the outcome of the meeting.

Industry wanted to know before then, as is clear from a letter sent by Lafarge CEO
Bruno Lafont to Enterprise Commissioner Verheugen on 20 February 2008 (1). In it
Lafont claims: “Indeed, we cannot wait until June 2011 to see this issue settled, as
the resulting lack of predicatbility would dramatically impair our investment
decisions.” The letter continues with the threat to move four planned investment
projects worth 1 billion euro outside of the EU, saying he: “would like the Commission
to be fully aware that the final environmental balance, if we were forced to invest
outside of the EU, would be negative as a consequence of the resulting additional
transportation of finished products.”

However, industry's claims were not backed up by solid evidence. The bulk of
academic and scientific studies (2) showed that auctioning did not pose a major risk to
the competitiveness of EU industry - a position argued by civil society groups and the
Greens in the European Parliament. Indeed when the European Parliament voted on
the proposals in autumn 2008, it rejected many of industry's demands. These had
been put forward by a few MEPs who appeared to be working hand in hand with
corporate lobby groups. In particular German MEP Karl Heinz Florenz and Finnish
MEP Eija-Riitta Korhola from the conservative group (EPP) put forward amendments
echoing industry's demands. Indeed, according to Terhi Lehtonen, an advisor to the
Greens, inspection of Florenz's amendments, revealed that they had actually been
written by Eurofer, the steel industry lobby group.

Following the failure in Parliament, companies turned to member state governments
for support, and indeed some of them, most notably Germany, were already pushing
for free allocations to protect the competitiveness of their home industries (the
chemical industry for example clearly influenced German chancellor Angela Merkel's
position). According to Avril Doyle, the former Irish MEP who was rapporteur for the
ETS review in the European Parliament, the German chemical industry, along with
German coal, has been the most effective lobbyist for Phase Three of the ETS (3).

Some governments (German, Dutch, Swedish, UK) had looked at the risk of carbon
leakage from auctioning and had concluded that it would have a small impact on the
economy. However, as the extent of the economic crisis became apparent, their
position changed. Facing a recession, many governments became more sympathetic
to industry's claims.

The EU presidency was at this point held by the French. Nicolas Sarkozy had made
a personal pledge to have the climate and energy package approved during his
tenure. The package was contentious - including regulations not only on the ETS
review but also EU targets for renewable energy and CO2 reductions, burden
sharing, regulations on car emissions and policy on carbon capture and storage. In
order to avoid getting bogged down in endless negotiations, Sarkozy moved the
issue from the Environmental Council (which requires qualified majority voting) to the
European Council (which requires unanimity, therefore giving the right of veto to any
country which is not happy with the deal). This allowed governments to in effect
become lobbyists for their own industry sectors. The Finnish finance minister, for
example, was quoted in Finnish media saying that the prime minister would not leave
the European Council until he got free allocations for the Finnish paper and pulp
industry.

The approved directive (4) set thresholds to identify the sectors at risk of carbon
leakage, which will be entitled to some free permits until at least 20205 . The
thresholds - based on the increases in production costs and the level of trade with
third countries were set low enough to allow most sectors to be included.

This was the political price to pay for governments approving the deal.

Importantly, the directive also moved forward the date by which the Commission
would decide the final list of sectors deemed at risk of carbon leakage. The final list
will be approved by the end of 2009, but the draft list was published in the summer
and has already been approved by member states, the Commission and the
Parliament's Environment Committee - making the Parliament's final approval a
formality (6). Even the Commission had been pushing for this to be delayed until after
the Copenhagen climate talks. Other countries could see it as a protectionist move,
and it also sets a dangerous precedent for dealing with polluting industries
elsewhere. Lobby pressure from industry supported by national governments has
significantly reduced the chances of making industry change course.

The sectors included on the list were decided via a stakeholder process, led by DG
Enterprise working with DG Environment. Through access to information requests
Corporate Europe Observatory has obtained evidence of intense lobbying by energy
intensive sectors, including chemicals, steel and cement, showing numerous
meetings with both DGs, emails and letters, claiming the cost pressures that would
lead them to relocate (carbon leakage).

The steel sector, for example, had close to 20 meetings on the subject of carbon
leakage with DG Enterprise Commissioner Verheugen and other officials between
January 2008 and May 2009 dealing with carbon leakage.

As a result, industry has managed to persuade EU member states not only to adopt
low thresholds, but also to allow the thresholds to be based on flawed calculations.
The directive introduces gradual auctioning (so they would not have to pay for 100%
of permits until 2020.) but the calculations to see how much the costs would rise if
industries paid for permits assumed 100% auctioning from the start. This means that
industry costs were inflated.

The final result was that 164 sectors representing 77% of the EU's manufacturing
industry were considered at risk of carbon leakage. To rub salt into the wound, the
list will be reviewed every five years, providing an opportunity to add new sectors.
Politically, it will be practically impossible to remove sectors.

Civil society groups have warned of the negative consequences of handing out free
allocation to a high number of the most polluting industries, but the Commission and
industry argue that because the cap remains the same, total emissions will still be
reduced. Benchmarking (7), they argue, will ensure that only the most efficient
manufacturers get all permits for free. Not only is the setting of the benchmark open
to heavy lobbying, but giving free permits to the worst polluters kills the rationale
behind the emissions trading scheme. It removes the incentive for climate-friendly
innovation. The idea is that putting a price on carbon effectively redirects the
economy towards low carbon products and technologies. When industry gets permits
without paying for them, they either pass the costs to consumers and make a windfall
profit, or they ignore the costs removing any carbon price signal at all. This means
there is no incentive to introduce low carbon products or manufacturing processes.

The cap is there, but there are also loopholes. In the first two phases of the ETS,
more emission permits were allocated than needed, and as a result of industry
pressure, these spare permits can be banked for future use (8). What is more, industry
is allowed to offset up to 50% of their carbon emissions - effectively allowing industry
to claim reductions by paying through offsetting schemes under the Kyoto Protocol
(the clean development mechanism and joint implementation) (9).


The exact number of permits allocated will be decided in 2011 based on a benchmark
decided next year. This means industry is still actively lobbying to obtain as many
permits out of the total of 2,000 million allowances as possible, which is worth a huge sum of money.

And this is just one of the problems of relying on cap and trade as the way to achieve
emission reductions. It is permeable to industry lobbying and they have been allowed
a major say in its design and implementation.

The impacts of the EU ETS extend well beyond its borders, as it is being used as a
model for other cap and trade systems, such as Australia or the US. Yet the EU's
flagship climate policy is clearly flawed. It is time to change course and enforce
binding regulations to reduce emissions at source, with no offsetting, no trading and no get-out clause.

Corporate Europe Observatory

7 December 2009

1 Letter sent by Bruno Lafont to Günter Verheugen on 20 February 2008, filed at Corporate Europe Observatory, obtained through access to information regulation.

2 See fi European Parliament, study, “Competitive distortions in a world of different carbon prices. Trade, competitiveness and employment challenges when meeting the post-2012 climate commitments in the European Union”, July 2008,
http://www.europarl.europa.eu/activities/committees/studies/download.do?file=21551;
“Issues behind Competitiveness and Carbon Leakage. Focus on Heavy Industry”, OECD/IEA, Paris, October 2008
http://www.iea.org/papers/2008/Competitiveness_and_Carbon_Leakage.pdf; “Climate
Policy and Industrial Competitiveness: ten insights from Europe on the EU Emissions Trading System”, by Michael Grubb, Thomas L. Brewer, Misato Sato, Robert Heilmayr, Dora Fazekas, August 2009
http://www.climatestrategies.org/our-reports/category/17/204.html;

3 Avril Doyle speaking at a session during the World Business Summit on Climate Change which took place 24-26 May 2009 in Copenhagen.

4 Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009
amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community.
http://register.consilium.europa.eu/pdf/en/08/st03/st03737.en08.pdf5 These will be allocated in relation to a benchmark for the best performing installations - with
the best-performers receiving 100% free permits6http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0063:0087:EN:PDF7

The idea is that only the best 10% performers of every sector get 100% free allocation, but the design of the benchmarks are being decided in 2010 and therefore open to the influence of industry, which has already started actively lobbying for the most favourable arrangements.

8 An analysis by Sandbag concludes that the bankablility of permits and credits means that nearly 40% of phase 3 targets could be met be carry-over from phase 2. See “EU ETS S.O.S: Why the flagship ´EU Emissions Trading Policy´needs rescuing”, Anna Pearson and Bryony Worthington, Sandbag, London, July 2009.

9 Calculations by NGO FERN based on EU data showed that the actual emission reductions to be achieved in the EU in phase 3 of the ETS is just 3.9% compared to 2005 levels and 60% of this will come through offsetting. “Reducing Emissions or Playing with Numbers?”, EU Forest Watch, FERN, March 2009. According to a study by Ecofys, “the remaining abatement effort in phase-3 of the EU-ETS could to a large extent (65%) be achieved through the use of CDM/JI-credits”, “EU climate policy impact in 2020. With a focus on the effectiveness of emissions trading policy in an economic recession scenario”, Ecofys, June 2009.
http://www.ecofys.com/com/publications/documents/Ecofys_EUclimatepolicyimpactin2020_ne .pdf

__________________

Leaders Of The Rich World Are Enacting A Giant Fraud

By Johann Hari, The Independent

11 December, 2009

Every delegate to the Copenhagen summit is being greeted by the sight of a vast fake planet dominating the city's central square. This swirling globe is covered with corporate logos - the Coke brand is stamped over Africa, while Carlsberg appears to own Asia, and McDonald's announces "I'm loving it!" in great red letters above. "Welcome to Hopenhagen!" it cries. It is kept in the sky by endless blasts of hot air.

This plastic planet is the perfect symbol for this summit. The world is being told that this is an emergency meeting to solve the climate crisis - but here inside the Bela Centre where our leaders are gathering, you can find only a corrupt shuffling of words, designed to allow countries to wriggle out of the bare minimum necessary to prevent the unravelling of the biosphere.

Staggering across the fringes of the summit are the people who will see their countries live or die on the basis of its deliberations. Leah Wickham, a young woman from Fiji, broke down as she told the conference she will see her homeland disappear beneath the waves if we do not act now. "All the hopes of my generation rest on Copenhagen," she pleaded. Dazed Chinese and Indian NGOs explain how the Himalayan ice is rapidly vanishing and will be gone by 2035 - so the great rivers of Asia that are born there will shrivel and cease. They provide water for a quarter of humanity.

Mohamed Nasheed, the President of the drowning Maldives, said simply: "The last generation of humans went to the moon. This generation of humans needs to decide if it wants to stay alive on planet Earth."

We know what has to happen to give us a fighting chance of avoiding catastrophe. We need carbon emissions in rich countries to be 40 per cent lower than they were in 1990 - by 2020. We can haggle with each other over how to get there but we can't haggle with atmospheric physics over the end-goal: the Earth's atmosphere has put this limit on what it can absorb, and we can respect it, or suffer.

Yet the first week of this summit is being dominated by the representatives of the rich countries trying to lace the deal with Enron-style accounting tricks that will give the impression of cuts, without the reality. It's essential to understand these shenanigans this week, so we can understand the reality of the deal that will be announced with great razzmatazz next week.

Most of the tricks centre around a quirk in the system: a rich country can "cut" its emissions without actually releasing fewer greenhouse gases. How? It can simply pay a poor country to emit less than it otherwise would have. In theory it sounds okay: we all have the same atmosphere, so who cares where the cuts come from?

But a system where emissions cuts can be sold among countries introduces extreme complexity into the system. It quickly (and deliberately) becomes so technical that nobody can follow it - no concerned citizen, no journalist, and barely even full-time environmental groups. You can see if your government is building more coal power stations, or airports, or motorways. You can't see if the cuts they have "bought" halfway round the world are happening - especially when they are based on projections of increases that would have happened, in theory, if your government hadn't stumped up the cash.

A study by the University of Stanford found that most of the projects that are being funded as "cuts" either don't exist, don't work, or would have happened anyway. Yet this isn't a small side-dish to the deal: it's the main course. For example, under proposals from the US, the country with by far the highest per capita emissions in the world wouldn't need to cut its own gas by a single exhaust pipe until 2026, insisting it'll simply pay for these shadow-projects instead.

It gets worse still. A highly complex system operating in the dark is a gift to corporate lobbyists, who can pressure or bribe governments into rigging the system in their favour, rather than the atmosphere's. It's worth going through some of the scams that are bleeding the system of any meaning. They may sound dull or technical, but they are life or death to countries like Leah's.

Trick one: hot air. The nations of the world were allocated permits to release greenhouse gases back in 1990, when the Soviet Union was still a vast industrial power - so it was given a huge allocation. But the following year, it collapsed, and its industrial base went into freefall - along with its carbon emissions. It was never going to release those gases after all. But Russia and the eastern European countries have held on to them in all negotiations as "theirs". Now, they are selling them to rich countries who want to purchase "cuts". Under the current system, the US can buy them from Romania and say they have cut emissions - even though they are nothing but a legal fiction.

We aren't talking about climatic small change. This hot air represents 10 gigatonnes of CO2. By comparison, if the entire developed world cuts its emissions by 40 per cent by 2020, that will only take six gigatonnes out of the atmosphere.

Trick two: double-counting. This is best understood through an example. If Britain pays China to abandon a coal power station and construct a hydro-electric dam instead, Britain pockets the reduction in carbon emissions as part of our overall national cuts. In return, we are allowed to keep a coal power station open at home. But at the same time, China also counts this change as part of its overall cuts. So one tonne of carbon cuts is counted twice. This means the whole system is riddled with exaggeration - and the figure for overall global cuts is a con.

Trick three: the fake forests - or what the process opaquely dubs "LULUCF". Forests soak up warming gases and store them away from the atmosphere - so, perfectly sensibly, countries get credit under the new system for preserving them. It is an essential measure to stop global warming. But the Canadian, Swedish and Finnish logging companies have successfully pressured their governments into inserting an absurd clause into the rules. The new rules say you can, in the name of "sustainable forest management", cut down almost all the trees - without losing credits. It's Kafkaesque: a felled forest doesn't increase your official emissions... even though it increases your actual emissions.

There are dozens more examples like this, but you and I would lapse into a coma if I listed them. This is deliberate. This system has been made incomprehensible because if we understood, ordinary citizens would be outraged. If these were good faith negotiations, such loopholes would be dismissed in seconds. And the rich countries are flatly refusing to make even these enfeebled, leaky cuts legally binding. You can toss them in the bin the moment you leave the conference centre, and nobody will have any comeback. On the most important issue in the world - the stability of our biosphere - we are being scammed.

Our leaders are aren't giving us Hopenhagen - they're giving us Cokenhagen, a sugary feelgood hit filled with sickly additives and no nutrition. Their behaviour here - where the bare minimum described as safe by scientists isn't even being considered - indicates they are more scared of the corporate lobbyists that fund their campaigns, or the denialist streak in their own country, than of rising seas and falling civilisations.

But there is one reason why I am still - despite everything - defiantly hopeful. Converging on this city now are thousands of ordinary citizens who aren't going to take it any more. They aren't going to watch passively while our ecosystems are vandalised. They are demanding only what the cold, hard science demands - real and rapid cuts, enforced by a global environmental court that will punish any nation that endangers us all. This movement will not go away. Copenhagen has soured into a con - but from the wreckage, there could arise a stronger demand for a true solution.

If we don't raise the political temperature very fast, the physical temperature will rise - and we can say goodbye to Leah, and to the only safe climate we have ever known.

©independent.co.uk

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