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Project Minutes | Blockchain SIG | Blockchain TED Videos | IBM Blockchain for Diamond Ind | RUBAC Video | RUBAC Projects | Disclaimer | Copyright Home | A: Exec Sum | B: Our Inner West | C: Our Approach | D: Current Emissions | E: Key Areas Focus | Ea: Community Emis | Eb: Council Emis | F: Implementation The Moral Economy of Carbon Offsetting: Ethics, Power and the Search for Legitimacy in a New Market - 2016 PhD Thesis by Robert WATT awarded 01 Aug 2017 Chapter Nine: Conclusion Wall Street took a good idea, [the] mortgage bond, and turned it into an atomic bomb of fraud and stupidity that is on its way to decimating the world economy … We live in an era of fraud in America, not just in banking but in government, education, religion, food, even baseball. I thought we were better than this, I really did, and the fact that we're not does not make me feel all right and superior - it makes me feel sad I just know that at the end of the day average people are going to be the ones who have to pay for all this because they always, always do.- Steve Carell as 'Mark Baum' in The Big Short (McKay 2015). The fictional Mark Baum of the epigraph is a Hollywood portrayal of hedge fund manager Steve Eisman, who predicted the crash in value of mortgage securities which led to banking sector collapse and government bail-outs in 2008. The epigraph refers to wilful failure to recognise the potential for widespread mortgage defaults in the run up to the financial crisis. Mortgage brokers were presenting risky loans as secure assets, packaging them into profitable financial instruments. This was a case of fraud, according to 'Mark Baum'. If fraud is understood as 'wrongful deception intended to result in private gain', then that view has credibility. When the lack of value of many mortgage bonds became apparent - when the systemic fraud was detected - the bonds' value collapsed bringing financial ruin. Governments responded by socialising banks' losses, imposing the costs of reckless but highly profitable lending on to the public, such that 'average people' were the ones who paid. Even so, these actions were framed in moral terms in debates about the ethics of lending, justifications of salaries, and acceptability of bail-outs (Fourcade et al. 2013). This conclusion starts with the case of the banking sector, rather than discussing carbon offsets, because I believe the dynamics of 'moral economy' apply to other sectors as well as that of (supposed) climate change mitigation. Referring to some other cases helps the conclusion to draw out some wider implications from this study. In what follows, I begin by emphasising the links between fraud in the banking sector and the case of carbon offsetting. In both of these, gains have been privatised whereas costs have been imposed on the public. And yet despite the problems of offsetting, which I briefly re-cap, there have been substantial efforts to define offsetting as a morally worthy activity. My argument is that this attempted definition can be powerful in so far as it makes practices resistant to critique and helps obscure serious problems. Some examples from other economic sectors help to illustrate this point. Consequently, my conclusion is that critique is of central importance to the deconstruction of inflated claims about moral activity. Continuation of critique is especially important in the context of ongoing efforts to resurrect carbon offset markets in policy and practice. Just like in the mortgage bonds sector, in the case of carbon offsetting there are many incidents of wrongful deception intended to result in private gain, which can otherwise be referred to as fraud. Creative carbon accounting, in which project developers and consultants exploit structural defects of the baseline and credit system, especially its features of additionality-testing and baseline-reckoning, lead to the crediting of offsets that lack environmental integrity. The prevalence of fraudulent activity, insufficiently challenged by commercially and politically compromised auditors, undermines the moral case in favour of offsetting. The fraud creates moral problems because credits that lack use value are being used as a source of revenue for various market actors, while the losses fall on the general public. The public are to suffer the worsening impacts of climate change and the externalised negative effects of offset projects in developing countries. The producers and buyers of the credits have limited incentive to ensure the quality of the offsets because the assets are supposed to represent public goods: emission reduction and sustainable development. When these goods are not provided, as is all too frequent, the public bears the absence (Gillenwater 2011, p.6). My findings support the contentions of critics who maintain that offsetting 'is without scientific legitimacy and is dangerously misleading' (Anderson 2012c). In line with the evaluative component of the moral economy research approach, my evaluation of moral rationales and problems gives a clear picture of offsetting as a scheme which is regularly failing to fulfil its avowed objectives. Carbon offsetting has undermined climate change policy, as credits that lack environmental integrity have been used to 'comply' with regulation. Offsetting has similarly encouraged misleading claims about green 'climate neutral' behaviour. And while market advocates talk positively about sustainable development, the actual record of carbon offsetting in development terms is far less commendable. As such my work contributes to critical scholarship on carbon offsetting by providing more evidence of the many problems involved in offsetting practice. Interviews with market actors have shone light on the mechanisms through which project developers, consultants and auditors undermine environmental integrity and avoid development programming. I have highlighted the purchasing strategies, driven by price considerations, which ignore problems. My analysis also suggests limited potential for reform. Changes to methodologies, audit practices and standards can make limited improvements as I have highlighted. But the fundamental trouble is that carbon offsetting, as a baseline and credit trading system, is easily manipulated for gain. Beyond identifying problems, I have offered explanations for them, situating malpractice within the broader political and economic structures of the market. The revenue seeking behaviours of commercially oriented actors explain much of the misuse of this scheme: a finding with disconcerting implications for broader efforts to implement market- based responses to pressing environmental challenges. Even as responses to moral concerns involve exploiting opportunities for private gain, substantial efforts have been made to define offsetting as an ethical practice. The attempt to define carbon offsetting as an ethical practice is part of an effort to construct a powerful, hegemonic view about the legitimacy of the carbon market which can enable interested parties to continue to exploit opportunities to achieve private gain. The case of carbon offsetting is not exceptional. It is just one example of economic activity in modern capitalism that is defined as moral in order to contribute to the production of hegemony. Even violence and war can be promoted, justified and sustained - or ended - on the basis of normative cultural beliefs about the legitimacy of armed force and punishment (Hamilton 2011; Peffer 2008; Neumann 2004). Trends towards 'fair trade', 'eco-tourism' or 'corporate social responsibility' have started to contribute new definitions of morality. But moral framings depend on selective readings of situations. Commercially interested parties encourage the 'moral gaze' to be directed at certain features of the world, but not others. For example in eco-tourism, visitors are encouraged to think about environmental care when diving in coral reefs or cultural sensitivity in tropical forest retreats, while their attention is diverted from more problematic aspects - the environmental impact of long distance travel (c.f. Cohen & Higham 2011), the sewage and waste run-off affecting marine life from tourist developments, the commodification of affect among hotel staff expected to conform to western cultural standards (Carrier 2010). In another case, the chemicals industry promotes normative ideals of family, community and environment to encourage gardeners to buy chemicals to create an aesthetically pleasing lawn - a tactic which succeeds despite significant consumer concern about the environmental and health risks of lawn chemicals (Robbins & Sharp 2003). The mobilisation of particular ethical desires, obscuring others, aligns with commercial agendas to sustain economic activities and the associated power of privileged groups that have an interest in sustaining hegemonic world-views. My work suggests that invocations of morality in the carbon offset market are being used to obscure, and thereby sustain, activities that are problematic. The value of the 'moral economy' approach to carbon offsetting becomes most evident where it gives insight into some of the causes of sustained carbon market dysfunction. Moral justification, normatively charged marketing, and ethical identities contribute to a portrait of carbon offsetting which makes it seem like an ethical practice. To some extent the portrayal has been definitively successful. For example, in a survey of 'ethical tourist behaviour' practices, researchers from a department of marketing describe purchasing carbon offsets, without supporting argument, as 'an ethical behaviour whose adoption requires considerable financial commitment', making it 'the most extreme ETB [ethical tourist behaviour] item' in their survey (Ganglmair-Wooliscroft & Wooliscroft 2016, p.2716). Equally, many carbon market actors embrace a view that carbon offsetting is normatively highly valuable, as I have described. As such, the thesis contributes to an understanding of carbon market governmentality, in which carbon market actors face strong incentives to align their personal beliefs and moral understandings with the prevalent discourses about the normative value of their enterprise. The thesis contributes thus to the wider literature by unpacking and showing the moral underpinnings of the cultural political economy of carbon offset markets. The wider danger involved in this cultural construction of morality - in its creation of hegemony and its ability to exert governmental power over individuals involved in the carbon market - is that appeals to moral concern and ethical identity can endow firms, organisations and individuals with a sense of moral authority that gives them more power and makes them resistant to criticism. This can be seen in other sectors too. For example, corporate social responsibility initiatives can extend corporate management into intimate realms, as documented in the case of regulating sexual conduct through HIV prevention schemes in South African mining companies (Rajak 2010). Power such as this can become naturalised if businesses are granted status as the arbiters and stewards of justice (Blowfield & Dolan 2008). In another example, constructions of charity and corporate philanthropy take on moral meanings in the case of action against breast cancer (King 2006). This makes it difficult to raise criticism of such actions (because they have assumed a normative emotional power) even when serious questions of effectiveness and legitimacy need to be raised (Ibid.). The creation of a sense of moral authority can serve to stifle and limit critique (Dolan 2010). It can help legitimise a social order (Brei & Böhm 2011). When visions of fairy-tale moralities are deployed through diffuse cultural forms, this offers a technique for 'fostering and managing subjectivities', for producing 'regimes of truth' (Igoe 2013, pp.38 & 44). The most effective response to these processes is to identify them and provide critique and challenge where needed. Morality needs to be reclaimed from those parties that have a private interest in defining it in some particular ways so as to obscure problematic practices. The moral economy approach to research which I have set out and implemented in this thesis holds value in that respect across a range of economic sectors. Its commitment to deconstruction of moral justifications of capitalist economic practices, plus careful evaluation of their rationales and problems, is important because it is potentially liberating. Critique can help us see through the mythical aspects of the moral narratives of the rich and powerful, helping us to challenge relations of domination and their ill-effects (Sayer 2014). Indeed, efforts to construct hegemony and exert governmental power are always incomplete, never total, as people have the ability to resist these forms of power. Consequently, I hope that my work can enhance the purchase of critical perspectives on carbon offsetting. In contributing an analysis of the justification strategies that carbon market actors deploy to discursively defend the moral status of carbon offsetting, I have been able to highlight some of their argumentative weaknesses. For example, much justification depends on a normalisation of capitalist relations, implicit ridiculing of critics that take a non-reformist attitude, and an argument that problems (presented as minor and insignificant) can be dealt with through reform. The reformist attitude is the most effective means of defending offsetting from the effects of criticism because reform efforts have indeed been implemented and have led to some improvements. But my examination of responses to moral concerns - in a situation when they can easily become black-boxed - suggests that reforms have not been effective enough to properly address problems that are related to the basic structures of the carbon offset markets. In terms of policy recommendation, I can only advise resisting the pursuit of offsetting options at a time when efforts to employ carbon offsets as part of future national or international climate policies and market-based mechanisms continue (Wuppertal Institute 2015). The International Civil Aviation Organization, under pressure to rein in the dangerously rapid growth of greenhouse gas emissions from the air travel sector (Bows-Larkin 2015), is looking towards emissions trading and offsetting as means of outsourcing responsibility for climate change mitigation at the time of writing (Garside & Szabo 2016). Not only does emissions trading risk locking in long term emissions from aviation (Lawson 2012), the offsetting provision risks undermining any commitments to reducing emissions, threatening to replace direct action with non-credible offsets. Some NGOs and researchers have responded to the aviation offsetting initiative with lobbying for quality standards, proposing that some offset project types get screened out and made ineligible in case of environmental integrity or human rights concerns (Bailis et al. 2016; International Coalition for Sustainable Aviation 2016). Other NGOs have reacted more critically by signing a letter describing offsets as a 'false solution' and 'a significant distraction from real measures to reduce aviation emissions (Lang). My findings support the latter NGOs' contention that experience with the CDM and other schemes has 'deeply discredited the notion that offsets provide climate benefits' (Ibid.). One complication is that communicating the problems of offsetting does not straightforwardly result in termination of the practice. That is partly because offsetting is not implemented just for the sake of environmental protection or sustainable development. Much of the attraction is rather offsetting's accumulation potential (Paterson 2014b, p.576). Whereas offsets can be viewed as a policy failure from a perspective of environmental protection or development goals, they can be viewed as a success from the perspectives of delaying meaningful action, depoliticising the issues, or generating income for privileged groups (Lohmann & Böhm 2012 p.83; Bryant et al. 2015). Such analysis might suggest a stitch-up, a deliberate Machiavellian plot to secure the interests of Western nations, transnational companies and finance industries irrespective of the public good - a plan akin to Susan George's (1999) satirical Lugano Report (in which all values are explicitly sacrificed for elite interests and the preservation of capitalism). However, rather than offsetting being embraced as some cynical ploy, my findings support the view that people make sense of their actions in market situations to themselves and others, including a reconciliation of a sense of moral self-worth, even if the actions performed may seem disconcerting to others (c.f. Shah 2009). Uncomfortable realities can easily be ignored as people avert their moral gaze (Cohen 2001). This selective cultural appreciation of the social world helps carbon market actors to generate their own personal beliefs about the value of offset products. For example, at a UNFCCC side event in 2013, I witnessed the Chair of the CDM (Clean Development Mechanism) Executive Board donning a t-shirt received as a gift from colleagues at the UN which had an image of a beer bottle and a modified version of the well-known marketing strap-line used by the beer brand Carlsberg. It stated: 'CDM - probably the best mechanism in the world'. The marketing of the CDM to policy-makers and the public, which aims to generate trust in offsetting, sutures the very identities of people working in the market. Movements for a 'climate justice philosophy of praxis' (Pearse 2010) that aim to challenge 'capitalist hegemony and the commodification of nature-society relations' (Wanner 2014) will probably not be expecting the Chair of the Board to embrace a critical perspective. Whoever is the chair, their function demands of them an approved normative orientation (a commodification of affect). The 'lay normativity' of individuals invested in carbon markets is heavily affected by the stake they have in it. But as a researcher the least I can do is read beyond board members' press statements and other moral narratives to challenge them. The views of the public and of policy-makers - those people less invested in carbon market schemes - are more likely subject to change. Consequently, continued critique can provoke further decline in demand for this problematic practice, and can lead to regulations against offsets. My findings indicate that this process has already begun. Civil society groups, the media, and academia have roles to play in fostering this change. Although it was not my initial goal, my main hope now is that this thesis and the broader communication of its insights and findings can contribute to more effective and very necessary critique. D Key Documents D4 2019-08-18 Submission to Inner West Council for Waste Management Joint-Venture D3 2012-01-11 p10 YEF "Local Goverment plays the central role in litter and waste management" D2 2012-01-11 p6 YEF "Populations, Dogs and Parks" D1 2012-01-11 Frontpage YEF "Closing the Poop Loop" Project Proposal R References R6 2019-01-19 Adelaide Advertiser: Compensation paid to Slave Owners 1835 - 2015 (180 yrs) R5 2003-2014 Dr Duncan Ironmonger Value of Volunteers for 4 States R4 2014-11-07 IBM "Blockchain" solution for the Diamond Industry Video R3 1997 Lessons from a Dozen Years of Group Support Systems Research - 4,000 IBM projects R2 Sir Evelyn de Rothschild - Director De Beers 1977-1994 & IBM UK 1972-1995 R1 1987-04-23 RUBAC Automatic eProcess Synchronisation Video
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