Private Blue Planet
by Jamie Dunn
[water]

A City Sinking in a Sea of Mud1 was the title of a 1966 Readers Digest article about the depletion of Mexico City's ground water. Thirty-three years later, the Toronto Star2 revealed that this city of 20 million people may have to be evacuated by 2006 due to the exhaustion of its water supplies—a city that in 1519 the Spanish called the Venice of the New World.
Around the world, the stories are the same. Nations have either diverted, depleted or polluted their water resources to such an extent that authorities like the United Nations and the World Watch Institute predict that by 2025, two-thirds of the world's people won't have enough water.3 Less than one-half of one percent of available water is fresh. Many point to population growth as the culprit, but the truth is that consumption of water is growing at twice the rate of the planet's population. Human beings use only 10 percent of the planet's fresh water-65 percent goes to industrial agriculture and the rest goes to other industrial uses.4

Towing Water in Giant Bags
New plans for water diversions are being drawn up and old ones resurrected. The Northern Alliance for Water and Power that would have used 800 kilometers of the Rocky Mountain trench as a giant sluice-way and flood one-fifth to one-tenth of British Columbia and the Great Recycling and Northern Development Canal, which would have diverted James Bay south to the American Midwest. These options are once again being promoted as viable given the rising global market value of water.
New technology allows the creation of giant bags up to 650 meters long and 150 meters wide (that's seven football fields by one-and-a-half football fields), which would carry 1.75 million cubic meters of water at a time. These bags would be pulled behind tugboats across oceans, making bulk shipments of fresh water less expensive and more profitable than if shipped by refitted oil tankers. Smaller versions have already been tested off the coasts of Monterey, California and Vancouver, British Columbia.5
Meanwhile, experts like Sandra Postel6 say that we could make significant reductions in our use of water without any real change in our lifestyles. However, the solutions that have gained the most momentum have not been to adopt these techniques, but instead to take water out of the commons—those diminishing parcels of things we should be stewarding together—and divide it up as private property. Water scarcity has not led to a solution. It has focused the world's biggest corporations on a growing and very lucrative market.

Wars of the Future Will Be Over Water
What Maude Barlow has called "blue gold"7 in her synthesis of the worldwide water crisis and the move to cartelize the world's water, is seen as the oil of the future. "The wars of the next century will be fought over water" according to the often-quoted declaration of Ismail Serageldin, vice president of the World Bank. King Hussein of Jordan once said the only reason he would go to war with Israel would be over water.8
For more than 10 years, with this specter looming before us, we have been corralled into the belief that the same paradigm that brought you global free trade will solve the water crisis. In other words, let the market work its magic.
Since 1992, the commodification of water has been wrapped in some very nice packaging. That year the Dublin Accord called for a holistic approach to water management. To raise awareness and to encourage participation in solving water problems—particularly by women—it finally called for the recognition of water as an economic commodity. Section 21 of the Rio de Janeiro Agreement of the following year adopted the same position. In 1998, a conference sponsored by UNESCO announced that the only way to guarantee equitable distribution of water and water services was the total commodification of water, relying on the forces of the open marketplace.9 Nowhere has any document adopted the position that access to a sufficient supply of clean water is a basic human right. The only reason the private sector is motivated to supply a thirsty world is that people are so dependent on water they will pay anything for it.
The poorest people living on the outskirts of cities in Central and South America and Asia pay many times more for water than do those in upper and middle class areas.10 Within free-trade zones like the maquiladoras of Mexico,11 toddlers drink Coke and Pepsi from bottles with rubber nipples because the water they have access to will literally strip the paint off a pencil. Meanwhile, nearby industries keep their landscaping green. This pattern of exploitation mirrors the pattern of water scarcity.
At present, more than one billion people live without enough water. Seventy-five percent of these people live in developing countries. By the time the problem reaches the proportions predicted in 2025, people in developing counrties will account for 95 percent of those affected.12 The water crisis is not one of supply, but of overuse and equitable access.
These rights of access to water for commercial purposes have been codified in trade deals since the first half of the last century. Water has been listed as a commodity under the General Agreement on Tariffs and Trade (GATT) since 1947.13 The mechanisms allowed under GATT for controlling exploitation of water disappeared in 1994 with the advent of the North American Free Trade Agreement (NAFTA).14 Furthermore, under Chapter 11 of NAFTA, corporations gained the right to directly sue governments if their right to investment was thwarted by legislation. Currently Sun Belt Water Inc. of Santa Barbara, California, is suing the Canadian government for $10.5 billion15 because a license to export water from British Columbia to California was revoked. As NAFTA becomes a hemispheric agreement under the Free Trade Agreement of the Americas (FTAA) every country in Central and South America will come under these obligations.
Measures to protect water from pollution have proved to be just as vulnerable to trade agreements. Methanex, a Canadian company that makes MTBE (methyl tertiary butyl ether) is suing the U.S. government under Chapter 11 of NAFTA for $970 million, because California has moved to ban the gasoline additive, which may be responsible for contaminating the water supply of up to 100 million Americans and has been called the greatest environmental disaster of the next decade.16 In fact, no protection of the environment has ever survived a challenge under the WTO or NAFTA.17
Changes to the General Agreement on Trade in Services (GATS), currently being negotiated, will gradually force the wholesale privatization of municipal water services around the world, despite the horrible record of the private companies that provide them. Two of these companies, Suez Lyonnaise des Eaux and Vivendi had combined 1998 revenues exceeding $70 billion,18 to provide water or water services to 120 million people worldwide.19 Some of the corporations now entering the water business are heavyweights like Bechtel, Enron, and Monsanto. Rebecca Mark, president of Enron's new water division, has said she won't retire until all the water of the world is privatized.20 She has trade agreements, governments, and the World Bank on her side.

Notes:

Jamie Dunn works with The Council of Canadians.
1. Robert S. Strother, A City Sinking in a Sea of Mud, condensed from The Lyon, July/Aug.1966.
2. Linda Diebel, "Teeming City Dies of Thirst," Toronto Star, May 9, 1999.
3. World Resources 1998-99, jointly published by the World Resources Institute, the United Nations Environmental Program, the United Nations Development Program, and the World Bank (Oxford: Oxford University Press, 1998), pp. 188-89.
4. "The Next World War Will Be about Water," an advertisement by Turning Point Project, New York Times, Dec. 6, 1999.
5. Marq de Villiers, Water (Toronto: Stoddart, 1999), p. 322.
6. Sandra Postel, "Last Oasis, Facing Water Scarcity," The Worldwatch Environmental Alert Series, W.W. Norton and Co., New York, 1992, p12.
7. Maude Barlow, "Blue Gold," The International Forum On Globalization, San Francisco, 1999.
8. Louise Surette, "World Water Crisis, Expert Warns," Ottawa Citizen, Apr. 10, 1999.
9. UNESCO International Conference on "Water and Sustainable Development" Paris, Mar. 19-21, 1998.
10. Op. cit., n. 7, p. 3.
11. Ibid., p. 7.
12. Op. cit., n. 3.
13. GATT Harmonized Commodity and Description Coding System 22.01.
14. North American Free Trade Agreement, Articles 3.02: Tariff Elimination, 3.09.2: Import and Export Restrictions, and 314: Export Taxes.
15. Sun Belt Water Inc., news release, Oct.14, 1999.
16. "MTBE," 60 Minutes, CBS News, Producer Graham Messick, Jan. 16, 2000.
17. Steven Shrybman, Water Export Controls and Canadian International Trade Obligations, a legal opinion for The Council of Canadians, available at www.canadians.org.
18. Tony Clarke, The Polaris Institute, speech, Sep. 18, 1999.
19. Op. cit., n. 7, p. 14.
20. Ibid., p. 15.

The World Bank and
The Politics of Climate Change
[World Bank; energy]

"Over the past six years the World Bank has spent billions of dollars in developing countries on fossil fuel-related projects that will...nearly double the amount of carbon dioxide emitted by all the world's countries in 1996. Now, the bank hopes to profit from these very emissions by entering the market in emissions trading.... [T]he Bank is...hoping to double-dip—by funding fossil fuel projects in poor countries at the front end, then reaping financial benefits from the resulting pollution....
"The biggest beneficiaries of emissions trading will be the large global corporations...the same corporations that squawked loudly over the Kyoto Protocol, claiming it was unfair because it didn't impose targets on developing countries. Yet they are doing brisk business exploiting fossil fuels in those countries...with the aid of World Bank contracts. Nine out of ten energy projects financed by the World Bank benefit at least one corporation headquartered in the wealthy Group of seven nations.... The U.S., as the World Bank's largest contributor, has the most influence over bank projects—which it does not hesitate to use....
"[T]he U.S. continues to subsidize the fossil fuel industry directly by more than $18 billion a year and to provide it with tax breaks for exploration, production and foreign royalties, as well as military protection around the world to ensure the continuous flow of oil through the maintenance in power of regimes friendly to U.S. interests in oil-rich states at the cost of $57 billion per year....
"The failure of the U.S. government, Congress included, to take adequate action to reduce emissions means that the U.S. is heading toward being 30 percent over 1990 levels by the time its Kyoto targets are supposed to be met in 2012....
"In contrast to his behavior on climate change, Brent Blackwelder explains, ‘The Clinton Administration put all of its marbles into the free trade bag, with NAFTA, GATT and the MAI, Fast Track, trying to apply NAFTA to Latin America and trying to cover up the sins of the IMF by putting more money into it.' ...[S]uch an agenda will moreover, have a number of negative effects on the world's climate....
"[C]ongress has done everything in its power to prevent...[the Kyoto Treaty] implementation.... As a result, new programs designed...to fulfill the U.S.'s Kyoto commitments are now outlawed. This will give...Republican Congressmen [sic] a tool to hold an inquisition every time anything is done that has the impact of reducing emissions....
"In 1997-98 alone, oil, gas, coal and electricity utility companies spent $9.4 million on Political Action Committee (PAC) contributions to federal candidates. Senator Byrd [Dem.-W.Va.], co-author of the Byrd-Hagel Resolution for example, represents the big coal state of West Virginia and received $199,700 in 1996 alone, ...Senator Hagel...received $148,000....
"The Clinton White House has already received at least $12 million in Democratic Party and candidate contributions from big fossil fuel corporations....
"Bush comes from a background in big oil and is highly unlikely to take this issue any further forward. Gore would undoubtedly do better, but could he be relied upon to do enough?"—Simon Retallack, "How U.S. Politics Is Letting the World Down," The Ecologist, March/April 1999, pp. 11-118.

Impacts of Economic Globalization
on Global Climate
by Simon Retallack and Ladan Sobhani
[globalization; transnationals; climate; World Bank; agriculture]

Human-induced climate change is probably the most serious problem facing humankind. More and more heat-trapping gases—principally carbon dioxide—are being emitted into the atmosphere through the burning of more and more oil, coal and other fossil fuels and forests that normally absorb them are being destroyed. The result is greenhouse gas overload in the atmosphere—trapping solar heat and causing surface temperatures to rise.
Twelve of the hottest years in recorded history have occurred since 1980. With higher temperatures, there has also been more energy driving the Earth's climatic systems. They in turn have been causing more violent weather events, such as Hurricane Mitch, which killed 10,000 people and destroyed the infrastructure and economies of two Central American countries in 1998. Rising temperatures have also caused polar ice sheets to begin to melt and disease-carrying mosquitoes to move north—even to New York City. Already, according to the Inter-governmental Panel on Climate Change (IPCC)—the official scientific body established by the U.N. to investigate climate change, global average temperatures have risen 1.1ºF above the pre-industrial average.
And that is only the beginning. Scientists expect average world temperatures to rise between 6ºF and 25ºF over the next hundred years.1 As a result, if current trends persist, ever more frequent and severe storms, floods, droughts, dust storms, sea surges, crumbling coastlines, salt water intrusion of groundwater, failing crops, dying forests (including the Amazon rainforest), the inundation of low-lying land and islands, and the spread of endemic diseases such as malaria and dengue fever are all in on the cards. Agriculture worldwide could face severe disruption and economies could collapse. There could also be millions upon millions of environmental refugees—people fleeing from the intruding sea or from the deserts they have left in their wake. Scientists are advising governments that millions will die worldwide because of the changes in global climate that have been unleashed.
Economic globalization is accelerating this highly dangerous phenomenon by expanding industrial activity and universalizing the carbon-intensive model of development worldwide. The distancing of producers from consumers and the massive boom in "free" trade has required a vast increase in greenhouse gas-emitting transport. Liberalization of trade and investment around the world has also facilitated the global expansion of industrial agriculture and related food processing industries, which are highly energy intensive and generate vast quantities of greenhouse gases. It has also stimulated greater consumption of energy-intensive products, such as cars and electric appliances, and the construction of vast fossil fuel-based energy infrastructures. At the same time, governments are prevented from taking adequate mitigating action by three obstacles spawned by economic globalization: the spectacular growth of fossil fuel-related corporations and their consequent leverage over governments; the increase in competitive pressures on domestic industry; and global trade rules policed by the World Trade Organization. As a result, the climate is changing with very serious implications for us all.

Increasing Trade Transport
The (current) global economy and the philosophy that inspired its creation by definition necessitate trade over long distances. The central policy prescription of neo-liberalism is that of free trade based on international specialization according to comparative advantage. Accordingly, all countries should specialize in and export what they do or produce best, and import everything else. The consequence of the adoption of that philosophy, principally by removing barriers to foreign trade, is that diverse local economies supplying their local populations with most of the things that they need are supplanted by economies that produce principally for export abroad and import most of what they need. The geographic distance between producers and consumers has thus increased dramatically and goods are transported far greater distances before they reach consumers.2
Similar changes have taken place in the process of production. With the liberalization of investment and trade policy, corporations engaged in manufacturing or food processing are able to locate or farm out the various phases of production at, or to, different sites around the world. Components are thus shipped back and forth tens of thousands of miles before the product is finally assembled or completed. Hence, when Otis Elevator set about to create an advanced elevator system, it contracted out the design of the motor drives to Japan, the door systems to France, the electronics to Germany, and small geared components to Spain. All of these components were then shipped to the United States where they were finally assembled, before being exported around the world—traveling thousands of miles in the process.3 Similarly, as a study by the German Wuppertal Institute on the distance traveled by various food products revealed, the components of a 150 gram strawberry yogurt traveled a total of 1,005 kilometers before being put together. The strawberries were imported from Poland, corn and wheat flour from the Netherlands, jam from West Germany, sugar beet from East Germany and the yogurt itself from north Germany. Aluminum used for the cover traveled 300 kilometers.4
The environmental costs of such long-distance transport remain unaccounted for in the final price of products. If they were accounted for, such behavior would make no sense whatsoever. As more and more goods have had to be carried over longer and longer distances, trade transportation results in the consumption of over one-eighth of world oil production.5 As increasingly more oil is burned and greenhouse gases are emitted, climate change results.

Globalizing Industrial Agriculture
Industrial agriculture has made the productivity of farmland almost entirely dependent on massive infusions of energy derived from fossil fuels. It is therefore a major contributor to climate change. Already widely adopted in much of the industrialized world, with economic globalization, industrial agriculture is spreading globally, to countries which until recently have practiced far less energy-intensive systems of farming. Their rapid transition to fossil fuel-intensive models of production will therefore dramatically increase global greenhouse gas emissions.
Of all human created emissions of carbon dioxide, methane and nitrous oxide—the principal greenhouse gases contributing to climate change—industrial agriculture is responsible for 25 percent, 60 percent, and 80 percent respectively.6 Industrial agriculture replaces the energy inputs of humans and animals with huge amounts of fossil fuel-derived energy, of which it consumes more than any other industry. Direct energy, mostly refined petroleum products, is used on farms to power machines for the purposes of plowing, planting and harvesting, fertilizer and pesticide application, and transportation, while electricity is used for irrigation and other purposes.7
Striking as these figures may be, they do not include the even larger amounts of energy consumed off the farm for manufacturing machines, fertilizers and pesticides, and for processing, packaging (almost 50 percent of all consumer packaging in the U.S. is used for food products), and transporting the food after it leaves the farm.8
Industrial agriculture thus produces a particularly perverse outcome: it is estimated that it causes us to expend many times as much energy to produce food as we actually derive from eating it. And almost all of that energy is derived from burning fossil fuels—emitting large quantities of greenhouse gases in the process. Industrial agriculture is responsible for even more greenhouse gas emissions when we include the consequences of applying 70 million tons of nitrogen fertilizer every year on crops—which generates at least 10 percent of total nitrous oxide emissions.9 In addition, industrial farming methods lead to soil erosion, and, in the U.S. alone, soil erosion is estimated to cause the release of 16 million tons of carbon into the atmosphere each year.10 Industrial practices also lead to higher methane emissions in rice and livestock production. Rice fields that are flooded rather than rain fed produce much more methane.11 Flooding cuts off the oxygen supply to soil, leading organic matter to decompose into methane. In livestock production, meanwhile, when large numbers of animals are confined in one area, manure is usually stored in huge piles, releasing methane as it decomposes.12 It is estimated that livestock production is responsible for 15 percent of global methane emissions.13
Industrialized agriculture has clearly proven to be a highly energy-intensive and unsustainable model. To export it to the rest of the world is a recipe for worsening climatic dislocation, yet, because of economic globalization, that is precisely what is taking place.
With fewer barriers to trade in food—as a result of regional and international trade agreements, such as NAFTA and the World Trade Organization's Agreement on Agriculture—cheap, subsidized, large-scale industrially-produced food has flooded world markets, making it very difficult for farmers employing traditional, small-scale, less energy-intensive and less subsidized systems of agriculture to compete. As a result, the latter are forced to adopt industrial methods or go bust, as millions have done—in which case, if they do not starve, they are often reduced to buying imported industrial food and selling their land to wealthier farmers who use it to expand industrial production.
Governments are increasingly powerless to protect small farmers from such a fate as recent trade agreements, such as the WTO's Agreement on Agriculture, have removed their ability to control domestic agricultural policies. Tools which were once used to secure stable prices for domestic farmers are no longer allowed under WTO rules. Import controls to prevent the flooding of domestic markets; farmer marketing boards to give producers the ability to negotiate collective prices with domestic and foreign buyers; and family farm support programs—are all either forbidden or restricted under WTO rules. Thus, the world's remaining small, low-energy-consuming agricultural producers are rapidly being replaced with large agribusinesses using industrial practices.
Transnational agribusinesses which produce on an industrial scale, such as Cargill and Pepsico, now control seventy percent of world food trade. Cargill alone controls 60 percent of the world trade in cereals.14
Furthermore, the reorientation of economic activity toward production for exports that takes place when a country becomes part of the global economy, often following the adoption of an IMF/World Bank structural adjustment program, leads to a vast increase in the production of exportable cash crops—such as coffee, sugar cane and cocoa—grown in monocultures, which require far more high-energy inputs than other varieties. Increased production of cash crops also results from investment liberalization and privatization, which open up national economies to foreign agrochemical companies which are able to buy up farming companies and vast tracts of fertile land around the world for that purpose.
The resulting global expansion of industrial agriculture is the cause of growing energy use in the agricultural sector of most countries throughout the world, generating a consequent increase in greenhouse gas emissions, with devastating consequences for global climate.

Fossil Fuel Technology
With trade and investment liberalization, environmentally destructive technologies such as the automobile and other energy-intensive appliances, spread to cultures not yet dependent on such goods. Since the opening of markets to foreign imports, South Korea and Thailand, for example, witnessed annual car growth rates of 25 and 40 percent respectively in the early 1990s.15 Similarly, the number of cars in Mexico City grew a massive 60 percent between just 1990 and 1993.16 Such proliferation is significantly increasing the threat of global climate change, as autos are responsible for a large share of world carbon dioxide emissions. These are only set to increase, as transnational auto companies increase sales to countries that are rapidly liberalizing their markets, such as the states of the former U.S.S.R. that currently have only 1 car per 21 people; India that has one car per 455 people; and China, with one car per over 1,000 people. Already, as a result of investment liberalization in China, where people have relied primarily on bicycles, public transportation, and other low-input means of transportation, General Motors (GM) recently signed a $1 billion contract to produce 100,000 mid-sized cars annually.17 GM has also set up production in Russia, where it hopes to profit not only by producing cheap cars for export but by gaining a larger share of the domestic market. The company is not the only one expanding in this new market—in 1995, over 1 million foreign cars and trucks were sold in Russia and the Ukraine.18
The climatic consequences of the global proliferation of the car through economic globalization are disastrous. And the car is but one of a vast array of modern home and office products and appliances, such as washing machines, clothes dryers, TVs, VCRs, computers, and photocopiers, that require large inputs of climate-changing fossil fuels, and that are now being exported, and produced, around the world.

World Bank and Energy Infrastructure
International financial institutions—linchpins of the global economy—have directly promoted and financed fossil fuel-intensive projects throughout the developing world. According to the Institute for Policy Studies, the World Bank has financed $13.6 billion worth of energy projects since the Rio Summit in 1992, including 51 coal, oil and gas-fired power plants and 26 coal mines. These projects will emit 38 billion tons of carbon dioxide over their lifetimes, nearly double what was emitted in 1996 by all countries combined.19
Meanwhile, less than three percent of the World Bank's energy budget is devoted to renewable energy.20 Between 1992 and 1998, the Bank spent 25 times more on fossil fuel projects than on renewable energy. Moreover, the immediate beneficiaries of those projects are G-7-based corporations, which have been granted 95 percent of the contracts (explaining why, for every dollar the U.S. pays the World Bank, $1.30 of investments returns to U.S. transnationals), and are the primary consumers of the energy these projects produce.21
The Overseas Private Investment Corporation (OPIC) and the Export-Import Bank (Ex-Im)—U.S. export-credit agencies funded by taxpayers which subsidize U.S. commercial interests in developing nations—have also devoted billions of dollars to huge energy projects. According to OPIC's own press release, in 1996, over $1 billion was approved for nine American ventures abroad, including four power plants.22 European citizens fund a similar "corporate welfare" program through the European Bank for Reconstruction and Development (EBRD). Shell, Amoco, Mitsubishi, and Texaco are among the corporations whose overseas investments in energy resources have been subsidized by the EBRD.23
The World Bank's actions with regard to climate change are perhaps unsurprising given the assumptions they are based on. The Bank's charts projecting the world's future energy needs show a trajectory line that shoots off the graph, indicating expected energy demand for developing countries. Bank officials like to use these charts to shock audiences into believing how badly and rapidly the world needs to exploit all of its available fossil fuel resources. These projections, however, are based on the premise that countries will continue along the same course of export-based, energy-intensive development that the Bank has been pushing for decades. Accordingly, estimates inflate the expectation for energy needs and ignore localized systems of production and consumption that would significantly reduce overall energy consumption. Energy use, therefore, is over-projected because of the energy-intensive needs of economic globalization and the development model it promotes. By building infrastructures to cater for that expected demand, however, the World Bank and the other multilateral development agencies are playing a leading role in fueling climate change.

Obstruction by TNCs
Despite the growing threat posed by climate change, governments are being prevented from taking adequate mitigating action by a number of obstacles spawned by economic globalization, including the increased power of large corporations—particularly those in the fossil fuel industry. By opening new markets around the world to foreign trade and investment, economic globalization has greatly increased the opportunities for corporations to grow, increase their profits, and eliminate or absorb competitors, often through mergers. The fossil fuel sector and related industries have been no exception to this trend. The merger of the two oil giants Exxon and Mobil in 1998, for example, valued at $250 billion, has created the world's third largest corporation and the largest oil company by far.24 Among many others include the recent merger of BP with Amoco, and Total with Petrofina and Elf Aquitaine. These mergers have been mirrored by countless more in the auto, aircraft and utility industries.
The result of this corporate consolidation has been an unprecedented concentration of financial power in the hands of industries that profit from fossil fuels, to the point where many are now more economically powerful than a large number of nation states. The combined revenues, for example, of just General Motors and Ford —the two largest automobile corporations in the world—exceed the GDP of all Sub-Saharan Africa.25 This wealth has been used to great effect by fossil fuel-related companies to influence government policy in ways that have resulted in the defeat or watering down of many efforts to mitigate climate change. It is no accident that the countries with the highest per capita greenhouse gas emissions and which are the most recalcitrant in taking action to reduce those emissions—such as the United States and Australia—are also home to corporations that have spent a fortune funding front groups, think tanks, lobbyists, scientists, economists and above all politicians, to obstruct political attempts to prevent climate change.
In the U.S., for example, oil, gas, coal, utility, automobile and other fossil fuel-intensive corporations contributed $63.4 million to both main U.S. political parties between 1992 and 1998;26 spent $30 million lobbying politicians and government agencies in 1998 alone;27 and spent $13 million more on television, radio and newspaper advertising in the three months leading up to the Kyoto conference to promote political and public opposition to the treaty.28 Millions more have been spent funding corporate front groups, or so-called "Astroturf coalitions," such as the Coalition for Vehicle Choice and the Global Climate Coalition; think tanks, such as the Competitive Enterprise Institute and the Heritage Foundation; and scientists, such as Robert Balling—the recipient of $700,000 from the fossil fuel industry over the past five years.
The explicit goal of such funding—the extent of which citizens' groups could not possibly match—has been to discredit the science of climate change and prevent the changes necessary to prevent its worst effects. After years of effectively stalling global recognition of the problem, industry groups have successfully fought to limit countless measures to reduce emissions. For example, in the U.S.—responsible for a quarter of global greenhouse gas emissions—Congress voted against requiring car-makers to build more efficient vehicles by increasing automobile fuel economy standards, as a result of corporate influence. Indeed, Congress has tried to destroy what little fuel economy standards are in existence in the U.S. by successfully inserting an exemption for giant sport utility vehicles which now account for one out of every two cars being purchased and which get as little as 14 miles to the gallon.
Congress has also prevented the increase of the BTU or energy tax, as well as an increase in the 1999 budget for the development of renewable energy and energy efficient technology to $3.6 billion, which the White House requested. It has even rejected the President's policy that fossil fuels produced on public land should be subject to market-based royalty rates rather than the subidized rate currently in existence. The most significant act of congressional subversion is the Byrd-Hagel Resolution, passed unanimously by the Senate, 95 votes to 0, in June 1997, which effectively prevents the ratification of the Kyoto Protocol that mandates the U.S. to reduce its greenhouse gas emissions by 7 percent below 1990 levels by 2012. If that were not enough, as the result of legislative efforts by the rightwing Republican Joe Knollenberg—whose constituency includes Detroit, the capital of the U.S. car industry—and others, new programs designed especially to fulfill the U.S.'s Kyoto commitments are now outlawed.
Such political behavior defies all established scientific knowledge and the public interest, and can only have been taken to satisfy the short-term interests of corporations engaged in activities that are causing the climate to change. To varying degrees of success, the political power of fossil fuel-related corporations is being exercised in similar ways all over the world, including at regional levels such as the EU, and at all the international negotiations on climate change. Economic globalization has given these corporations the financial and political clout to have such influence, with devastating effects.

Deregulation Pressures
Another obstacle spawned by economic globalization that governments face in seeking to take action to mitigate climate change, is the huge increase in competitive pressures on domestic industry. As opportunities for foreign investment increase and moving manufacturing overseas becomes easier with economic globalization, corporations can pick and choose the regulatory conditions under which they invest. Companies complain that strict local, national or regional environmental regulations place extra costs on them that make them uncompetitive in the global economy. Countries attempting to take serious measures to protect the environment are thus no longer deemed competitive locations for investment.
In such a climate, governments compete with each other to lower or freeze environmental standards to attract foreign investment or to prevent the flight of industries already based in their countries. In a globalized economy, even the threat of relocation is powerful enough to send policy-makers on a deregulatory frenzy or a policy freeze, and attempts to raise taxation or environmental standards become almost impossible. The European Union's failed attempt at introducing a carbon tax in 1992 to reduce carbon emissions provides a clear example. Opponents of the tax argued that it would undermine the competitiveness of European companies abroad, because the tax would not apply to their competitors, who would therefore gain a commercial advantage over them.29
In refusing to ratify the Kyoto Protocol, the U.S. Senate has cited similar reasons. The co-authors of the Senate resolution that has effectively blocked the ratification of this treaty, Senators Byrd and Hagel argued that taking measures to reduce greenhouse gas emissions would damage the U.S. economy, causing an exodus of manufacturing plants to developing countries which are not mandated to reduce emissions under Kyoto.30 What opponents of the Kyoto Protocol fail to mention is that industrial relocation would not be possible were it not for the enhanced mobility corporations enjoy as a result of agreements which they ratified and that have reduced or eliminated barriers to trade and foreign investment. Furthermore, given the environmental threats that we face today, the solution to any loss of competitiveness cannot be the freezing, reduction or elimination of environmental protections. If the current global system of free trade and investment is impeding governments' abilities to set and enforce environmental protections, then the system itself, flawed as it is, needs to be changed.

Trade Rule Threats and the WTO
Global trade rules policed by the World Trade Organization also pose a significant threat to national and international efforts to address climate change. WTO rules, for example, could be used to challenge the Kyoto Protocol on a number of grounds.
Under the terms of the Protocol, parties are encouraged to implement policies and measures aimed at "enhancement of energy efficiency in relevant sectors of the economy"—a key goal of climate change mitigation. An important way in which that may be achieved is by setting energy efficiency standards for consumer products —such as motor vehicles. When that has been attempted by the European Union, Japan and the United States, however, global trade rules have been used to challenge their initiatives, and serious disputes have followed.
In January 1999, Japan announced its intention to introduce legally binding standards for energy efficiency for nine categories of cars on the basis of vehicle weight, in order to meet its commitment under the Kyoto Protocol to reduce its greenhouse gas emissions by 6 percent below 1990 levels. The standards are set based on the most energy efficient vehicle currently commercially available within each weight category—"the top runner"—which in each weight category happens to be a Japanese car. The EU, meanwhile, to meet its Kyoto commitment of reducing greenhouse gases by 8 percent below 1990 levels, has forged a voluntary agreement to increase energy efficiency with the European Automobile Manufacturers Association (ACEA). Under that agreement, the manufacturers agreed to reduce carbon dioxide emissions in new cars by 25 percent by 2008, on the basis of fleet averaging, rather than specific efficiency requirements on vehicles by category.
The EU and Japan have challenged each other's energy efficiency requirements arguing that they discriminate against imported vehicles—which is forbidden under world trade rules. Because European exports to Japan tend to be in the range of medium and luxury vehicles, they fall into the middle and heavier weight categories which are subject to the greatest percentage of improvements for fuel efficiency. The EU therefore claims that the effect will be to discriminate against their cars (a claim the U.S. on behalf of its auto manufacturers has now repeated) in violation of the WTO's Agreement on Technical Barriers to Trade, which prohibits standards that are discriminatory and more trade restrictive than necessary.31 Japan, meanwhile, claims that EU standards based on fleet averaging discriminate against their vehicle exports, which are primarily higher end vehicles that would need substantial improvements in energy efficiency to meet EU standards.
It remains to be seen if the EU, the U.S., or Japan will mount formal challenges at the WTO, but if they do, the chances of their respective energy efficiency standards' survival are not good, especially given the fate of the U.S. Corporate Average Fuel Economy (CAFE) standards. Designed to increase energy efficiency, the CAFE standards were challenged by the EU for discriminating in effect against EU automakers, citing almost identical arguments as the opponents of Japanese and European energy efficiency standards today, even though the U.S. average fuel economy standards were identical for domestic and foreign fleets. A GATT panel, however, agreed with the EU, and, in 1994, overturned the U.S. standards.32
The application of carbon taxes—another important strand of any serious strategy for meeting national commitments under the Kyoto Protocol—could also fall foul of WTO rules. By internalizing the climate-related costs of using fossil fuels, carbon taxes create an incentive to use less fuel and to develop more fuel efficient production processes. As we have seen, however, taxing commercial goods at a national level on the basis of how much those goods contribute to greenhouse gas emissions, can place domestic industries at a competitive disadvantage in the global economy—because the tax does not apply to foreign competitors. One way around that problem would be to tax imports based on the energy used to produce them. But under GATT/ WTO rules governing "like products," that would be illegal. Those rules prohibit internal taxes on imported products that are "in excess of those...applied to like domestic products," (GATT Article III).33 Any trade discrimination based on the way a product is produced—exactly what carbon taxes are designed to influence—is thus forbidden.
That represents a fundamental conflict between the WTO and the Kyoto Protocol. For while under WTO rules, "like products" cannot be distinguished or discriminated against on the basis of how they were produced or where they came from, the Kyoto Protocol and all three of its flexible mechanisms mandate discrimination between different manufacturing technologies and processes, between signatories and non-signatories, and between higher-emitting developed countries and lower-emitting developing countries. Ultimately, without discrimination, the reduction of greenhouse gas emissions is all but impossible, as climate-changing technologies need to be discouraged.
Given these findings, and given the monumental threat that climate change poses, the re-subordination of global trade rules to environmental imperatives and the re-localization of trade must be considered important strategies for reducing overall energy demand and greenhouse gas emissions. The energy-intensive model of economic globalization must be challenged if we are to stand a chance of preventing severe climate change.

Notes:

Simon Retallack and Ladan Sobhani have written extensively on environmental issues. Retallack was editor of the special issue of The Ecologist on "Climate Crisis," Vol. 29, No. 2, Mar.-Apr. 1999. The Ecologist can be contacted at: Unit 18, Chelsea Wharf, 15 Lots, London SW10 0QJ, U.K.; e-mail: ecologist@gn.apc. org. This article is adapted from the International Forum on Globalization's forthcoming report on the impact of economic globalization on the environment. For a copy of the report, call 415-771-3394.
1. Robert T. Watson, Marufu C. Zinyowera, and Richard H. Moss, eds., Summary for Policymakers. The Regional Impacts of Climate Change: An Assessment of Vulnerability, 1997, p. 4; see also Alberto DiFazio, "Misreading the Models: the Danger of Underestimating Climate Change," The Ecologist, Vol. 29, No. 2, Mar./Apr. 1999, p. 75.
2. David and Marcia Pimental, Food, Energy and Society (Niwot, Colorado: University Press of Colorado, 1996), p. 201.
3. David Korten, When Corporations Rule the World, (London: Earthscan, 1995), p. 125.
4. Tim Lang, "Dietary Impact of the Globalization of Food Trade," IFG News, Issue 3, Summer 1998.
5. Tim Lang and Colin Hines, The New Protectionism (New York: New Press, 1993).
6. Peter Bunyard, "Industrial Agriculture-Driving Climate Change," The Ecologist, Vol. 26, No. 6, Nov./ Dec. 1996.
7. Mohinder Gill, U.S. Department of Agriculture, Economic Research Service, Agricultural Resources and Environmental Indicators, 1997.
8. Ibid.
9. Cynthia Rosenzweig and Daniel Hillel, Climate Change and the Global Harvest (London: Oxford University Press, 1998).
10. USDA-ARS News Service, "Cropland Helps Control CO2 and Ease Greenhouse Effect," Sep. 29, 1998.
11. Op. cit., n. 9.
12. IPCC Guidelines for National Greenhouse Gas Inventories Reference Manual, 1996.
13. Op. cit., n. 9.
14. United Nations Center on Transnational Corporations, cited by Tim Lang in "Dietary Impact of the Globalization of Food Trade," IFG News, Issue Three, Summer 1998.
15. D. Mathews and A. Rowell, The Environmental Impact of the Car (Washington, D.C.: Greenpeace, 1992).
16. A. Calvillo Unna, La Contribución del Transporte a la Contaminación Atmosférica, in El Transporte y la Contaminación, Proceedings of the Atmosphere and Energy Campaign Seminar, Mexico City, Greenpeace Mexico, 1993.
17. Cable News Network, "GM to Sign China Contract," Mar. 10, 1997.
18. Cable News Network, "GM Sets up Shop in Russia, " Nov. 29, 1996.
19. Daphne Wysham, "The World Bank: Funding Climate Chaos," The Ecologist, Vol. 29, No. 2.
20. Institute for Policy Studies, "The World Bank and the G-7: Changing the Earth's Climate for Business," Version 1.1, Aug. 1997; and Daphne Wysham, "The World Bank: Funding Climate Chaos." The Ecologist, Vol. 29, No. 2.
21. Institute for Policy Studies, "The World Bank and the G-7: Changing the Earth's Climate for Business," Version 1.0, May 15, 1998.
22. Overseas Private Investment Corporation (Washington, D.C.), "OPIC's Board of Directors Approves More than $1 Billion for Nine American Ventures World Wide," press release, June 1996.
23. Institute for Policy Studies and the International Trade Information Service, "The European Bank for Reconstruction and Development: Fueling Climate Change," Version 1, Nov. 1997.
24. Paul Farrelly, "Oil Sisters Troop to Alter as Price Sinks," Observer (London), June 12, 1998.
25. All three statistics cited by J. Karliner in The Corporate Planet: Ecology and Politics in the Age of Globalization (San Francisco: Sierra Club Books, 1997), p. 5.
26. Center for Responsive Politics, web site: http:// www.crp.org.
27. Ibid.
28. Sharon Beder, "Corporate Hijacking of the Greenhouse Debate," The Ecologist, Vol. 29, No. 2. Mar./Apr. 1999.
29. Op. cit., n. 4.
30. Simon Retallack, "How U.S. Politics Is Letting the World Down," The Ecologist, Vol. 29, No 2, Mar./Apr. 1999.
31. Lori Wallach and Michelle Sforza, Whose Trade Organization: Corporate Globalization and the Erosion of Democracy (Washington, D.C.: Public Citizen, 1999).
32. Ibid.
33. W.B. Chambers, et. al. Global Climate Governance: Scenarios and Options on the Interlinkages between the Kyoto Protocol and other Multilateral Regimes, United Nations University/Institute for Advanced Studies, Global Environmental Information Center, 1999.

An Urgent Warning to Humanity
[resources; ecology]

Following are brief excerpts from an "Urgent Warning to Humanity" which was issued by sixteen hundred Nobel prize winning and other scientists from around the world in 1992—eight years ago.
Human beings and the natural world are on a collision course. Human activities inflict harsh and often irreversible damage on the environment and on critical resources. If not checked, many of our current practices put at serious risk the future that we wish for human society and the plant and animal kingdoms, and may so alter the living world that it will be unable to sustain life in the manner that we know. Fundamental changes are urgent if we are to avoid the collision our present course will bring about....
No more than one or a few decades remain before the chance to avert the threats we now confront will be lost and the prospects for humanity immeasurably diminished....
We the undersigned senior members of the world's scientific community, hereby warn all humanity of what lies ahead. A great change in our stewardship of the earth and the life on it is required, if vast miseries are to be avoided and our global home on this planet is not to be irretrievably mutilated.