Profiting from 'green' business

It is hard for consumers and employees to evaluate the truth of claims that companies make about their green credentials. For example, Tesco, which says it is eco-friendly, is sending CDs and DVDs on a 1,400 mile trip to exploit a tax loophole. Discs are packed up in a warehouse in west London and sent to Zurich. Switzerland is outside the EU, and by re-importing from there to the UK, Tesco can avoid charging VAT. Sainsbury’s insists that respect for the environment is one of its five business principles, but this week it was selling asparagus imported from Peru and Thailand as if they never heard of air miles. News Corporation chairman Rupert Murdoch announced this week that within four years his company will be "carbon neutral". Measures include switching to solar-powered golf carts at Fox’s Hollywood studios and a plan to use renewable energy in the studio that produces the TV series 24. But News Corporation, which controls a large chunk of the world’s media, is also bidding to buy the New York stock exchange. Readers, viewers, and employees might feel that owning the US share casino will determine where News Corporation stands in the global conflict between profit and the planet’s future. News Corp has joined the Climate Group, one of the capitalist clubs springing up to develop "the climate change business". Members include BP, Alcan, HSBC, Starbucks and the notorious Severn Trent water company. Its website offers a list of schemes members can use to offset their own emissions, most of them profit-making ventures registered under the Kyoto Protocol’s clean development mechanism.

Carbon offsetting has become a way for some of the world’s most polluting companies to establish new profit centres. In return for a certificate claiming that they are cleaning up some part of their operation, a polluting company can sell credits to a carbon offset scheme.Readers may recall that in the Wizard of Oz , the scarecrow wanted a brain and was given, instead, a certificate. Well the principle here is much the same. For example:

• the Chhatisgarh iron works in India is selling credits for claimed improvements in its coal-fired operation which continues to spoil farmland, displace villagers and contaminate water supplies
• in Ecuador peasants are losing money on a contract they signed to maintain trees planted to offset a Dutch coal-fired power station
• in Maharashtra, India, wind farms are displacing farmers. One of News Corporation’s first ‘green’ actions was to buy carbon offsets from Indian wind farm companies
• around Mount Elgon in Uganda, villagers are forcibly kept out of a "national park" established by a Dutch foundation and the Uganda Wildlife Authority to plant "offset" trees.

The main result of Kyoto, with all its pious claims, is that the principle of polluter pays is being replaced by the polluter gets paid. Global corporations carry on emitting CO2, but charge premium prices for products they claim are environmentally friendly. And most of their claims to be green are based on buying cheap carbon credits from companies many of whose operations are destroying land and communities. Whilst contraction and convergence principles could play a useful role within a new global environmental agreement based on democratic control of politics and the economy, carbon offsetting has no useful role. It is a substitute for action to reduce emissions and a smokescreen behind which the global corporations are continuing business as usual.

Penny Cole, environment editor