At least some middle income developing countries are cautiously voicing support for ‘Nationally Appropriate Mitigation Actions’ as an alternative to the CDM carbon market. NAMAs are an as-yet poorly defined instrument for planning for developing country mitigation commitments. Within the global negotiations, the US position has been that developing countries must be incorporated into global efforts to reduce greenhouse gas emissions, and lead negotiator Todd Stern has repeatedly dismissed what he calls developing country ‘resentment.’
An abbreviated version of this argument appeared in the newsletter AlterEco on Dec 10, 2010.
Second-in-command negotiator Jonathan Pershing puts it more generously: developing and developed country commitments within any acceptable global agreement must have the same “character.” NAMAs help achieve this by developing a national strategy for emissions reductions that can begin to quantify developing country commitments. These ‘nationally appropriate’ activities take the form of a list of possible projects combined with basic research on the volume of reductions and the costs of implementing changes. This begins to form some of the groundwork for figuring out who will pay for those projects. It might take the form of a realistic commitment to a certain percentage reduction within a global architecture, on condition that wealthy countries will largely pay for the necessary investment.
Interestingly, the idea exposes some of the fault lines between developing country governments and existing carbon offsets markets. Under the Clean Development Mechanism private actors invest in emissions reductions projects in developing countries, quantify those reductions and then sell the credit for them to polluters in Europe. It is a market for a novel resource asset that is solely meant to transfer ecosystem benefits to the global North. One proponent claimed to me yesterday that at least developing countries are getting paid for it. But in fact very little of the dollar value for offsets stays in developing countries. The project developers are often foreign, plus they sell the offsets usually to European financial service providers at a steep discount, perhaps at only 40-50% of cash value. More than that, the projects pay for capital investment in developing countries, which is a good thing, but it is not necessarily economically productive capital. The ability to pollute a bit more in Europe has direct economic benefits – cheaper energy, more cement or aluminium production – but waste gas flaring in Thailand does not. The benefits are primarily environmental, not economic, and those environmental benefits are primarily global and may indeed have local environmental costs.
NAMAs tend to emphasize that developing country governments have very little control over ad hoc CDM investment within their borders, and governments may view NAMAs as a way to direct mitigation activities at the level of national economic planning and to seek out more systematic forms of finance. Indeed CDM carbon offset developers tend to view NAMAs as a direct threat to their business strategy because it opens their projects up to alternative forms of finance and because NAMAs are meant to anticipate reductions commitments. While these two issues are still poorly defined, what CDM developers really dislike is the idea of having to work closely with national planning agencies: they want the least-effort means to get in, earn their money, and leave. But the other side of this is that NAMA projects would be organized most likely through the very planning bodies that put together national development plans including the World Bank’s Poverty Reduction Strategy Papers (PRSPs). It presents a choice between fast capital globalization-style investment and the sort of ‘soft’ neoliberalism the World Bank has increasingly defined over the past 20 years.
A Malaysian delegate expressed the crux of this frustration to me: when donor countries start to insist on precise accounting of quantified reductions in direct quid pro quo for mitigation finance, it turns NAMAs once again into stark payments for carbon reduction services. That, for him, is where sovereignty is challenged. It is not a mater of infringement on sovereignty as when a foreign body takes on some of the role of the national government, but a matter of the formal subordination of one sovereign government to the prerogatives of another.
Martin Kohr, director of the South Centre, put it starkly when he pointed out that even if middle income countries agree to strict accounting demands, they will of course take the money being offered – but ‘when cooperation is needed in the negotiations they will hate you.’ (Paraphrase.) Perhaps that does look a bit like resentment, as the US negotiators like to say, but hopefully we can better see some of the architecture of that resentment here.