Very little, it seems, at the end of two weeks of climate negotiations that were less about climate than business and more about calculated obstruction than negotiation.

The unprecedented booing of US under secretary of state for democracy and global affairs Paula Dobriansky was far less disturbing than the cheering that followed soon after. The dramatic close to the Bali talks has helped create a public impression that by reaching consensus on a roadmap for post-2012 treaty negotiations something useful happened here.

Depending on whose interests we’re talking about, this impression might be right. The Bali mandate entrenches the power of big business, and the global financial institutions that work on its behalf, without committing any government to tangible emissions reductions. The assertion that Bali should be considered a success for those most affected by climate change — residents of small island states threatened by rising waters, forest dwellers that stand to lose more land to agrofuel plantations — should be seriously questioned.

MORE TRADING, MORE BANK

The proposals for climate change mitigation and adaptation put forward in the Bali agreement lack much detail, but they are articulated clearly enough to see that trading in carbon credits, both through existing Kyoto mechanisms and newly envisioned sectoral schemes, will likely be at the center of a global treaty.

Outlined in the road map is an Adaptation Fund that could reach $500 million by 2012, which would be administered by the Global Environment Facility (GEF) with the World Bank acting as trustee. One funding proposal suggests augmenting donations to the Fund from industrialized countries by recouping a 2% fee on revenues from carbon offset projects carried out under the Kyoto Protocol’s Clean Development Mechanism. Proponents of the Adaptation Fund claim that by using the CDM, rich countries would be ’forced’ to finance clean energy projects in poorer countries.

The Fund’s total capital is almost insignificant compared to the $50 billion that Oxfam estimates the developing world will need every year to cope with climate changes. But by naming the CDM as a major source of funding for adaptation, the Bali mandate entrenches carbon trading in future negotiations. The proposal ensures that developing countries have an increasingly vested interest in seeing market mechanisms flourish, and secures the role of the World Bank in setting the rules of that market.

Leaving aside the fact that the Bank has continued to finance oil and gas companies with public money to the tune of $8 billion since 2000 (82% of which was for export to industrialized countries), the Bank’s existing carbon finance portfolio has done little to mitigate climate change or support the development of sustainable energy for the 1.6 billion people living without access to electricity.

To date, the Bank has channeled more that $1 billion from the most polluting companies in the industrialized north to the most environmentally destructive industries in the global south. Only a fifth of the active projects are in the renewable energy sector, while more than 80% of the funds dispersed have gone to coal, metal, cement and industrial gas companies. Of the Bank’s entire carbon finance portfolio only 2% of the total $2 billion of capital raised is earmarked for projects with explicit sustainable community development requirements.

CODE REDD

Considering the World Bank’s less than stellar track record, it is surprising to see the Bank called on to take the lead in a proposal emerging from the Bali talks to reduce emissions from deforestation in developing countries (REDD).

Delegates’ inclusion of REDD in the roadmap essentially folds forests into the carbon market, but does little to explain the process by which forested countries would be compensated for slowing deforestation.

The World Bank has stepped in to guide a market in REDD credits through its newly launched Forest Carbon Partnership Facility. The FCPF will select countries to pilot a programmatic approach to carbon trading. These programs would differ from the CDM by setting national-level reduction targets for a country’s entire forest sector, instead of creating baselines and targets on a project by project basis.

Indigenous rights and sustainable forestry groups have protested that there is nothing built into the facility ensuring that the benefits of a global forest trading scheme would reach forest peoples. In particular, critics have raised warnings of massive displacement as companies rush to acquire forested land and governments shift public policy to facilitate industrial land grabs.

Investors, however, are quite pleased, having long asked for the Bank to establish consistency throughout the carbon market to help lower market entry risk and transaction costs in carbon offset projects. By moving to a sectoral approach, credits can be normalized across entire industries.

The Bank has in fact begun designing a new Carbon Partnership Facility to expand the programmatic approach into markets for carbon credits generated from power sector development, gas flaring, energy efficiency, transportation and waste management systems.

KEEPING AN EYE ON THE BANK

The growing role of the World Bank in clearing a path for private capital in an expanded carbon market was not lost on climate justice groups in Bali. Hundreds of activists from groups from around the world demonstrated outside the FCPF launch. World Bank side events and press conferences were peppered with demands for the Bank to get out of the carbon market. As climate negotiations unfold in the next two years scrutiny of the Bank’s climate programs will be increasingly important to ensure that markets do not determine the shape of an international agreement to stem greenhouse gas emissions.