Thursday, September 22, 2011

"Money, It's a hit. Don't give me that do goody good bullshit..."

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The NYTimes ran an article yesterday discussing an Oxfam report that villagers in Uganda were violently forced off their land by the Ugandan government and New Forest Company, a British forestry company. The government and the company have interest in the land as a means of involvement in the carbon-credit trade. The article reports,

But in this case, the government and the company said the settlers were illegal and evicted for a good cause: to protect the environment and help fight global warming.

The case twists around an emerging multibillion-dollar market trading carbon-credits under the Kyoto Protocol, which contains mechanisms for outsourcing environmental protection to developing nations.

The company involved, New Forests Company, grows forests in African countries with the purpose of selling credits from the carbon-dioxide its trees soak up to polluters abroad. Its investors include the World Bank, through its private investment arm, and the Hongkong and Shanghai Banking Corporation, HSBC.

In 2005, the Ugandan government granted New Forests a 50-year license to grow pine and eucalyptus forests in three districts, and the company has applied to the United Nations to trade under the mechanism. The company expects that it could earn up to $1.8 million a year.


Oxfam endorses the use of insurance (notably index-based insurance) as a means to help rural farmers adapt to climate change. The insurance industry has been important in establishing a viable carbon trading market by offering insurance against the risk that beliefs about climate change risk will change and being generally involved with the market establishment through the UN.

So... the carbon trading market entices some unfortunate behavior. Insurance supports the belief system required for the carbon trading market. Oxfam supports the use of insurance as a means to address climate change. Oxfam point to the unfortunate behavior tempted by the carbon trading market.

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