For nearly a decade, Goldcorp’s Marlin gold and silver mine in the Guatemalan altiplano has been at the center of intense local conflict and international scrutiny. The conflict was ignited in 2005 when local Mayan communities overwhelmingly rejected mining in popular plebiscites called consultas. Chief among their concerns was the potential for water contamination in the agricultural areas.

Virtually every international human rights organization—from the ILO to the UN Special Rapporteur – has weighed in, urging Goldcorp and the Guatemalan government to suspend mine operations to ensure protection of the rights, health and livelihoods of the indigenous people. In mid-2010, the Inter-American Commission on Human Rights of the Organization of American States (IACHR) went one step further and issued precautionary measures ordering the Guatemalan government to suspend operations at the Marlin mine.

Through it all, the Marlin mine has continued to operate, raking in a bonanza for Goldcorp shareholders. Between 2006-2009, Marlin generated nearly $1 billion in revenues and almost $350 million in earnings, making it Goldcorp’s third best performing mine. According to the company’s annual report, 2010 was a banner year: Marlin generated a record $500 million in revenues and $268 million in earnings, nearly double over the previous year.

Costs of production at Marlin are the lowest of all of Goldcorp’s operations, generating what the company calls “tremendous cash flow”.  While production costs have stayed flat or even decreased since mine operations began in December 2005, the price of gold has increased by more than 300%. The forecast is for more of the same: analysts predict the average gold price in 2012 could hit as high as $2500 per ounce.

Crumbs off the table

Guatemala’s share of the bonanza can best be described as “crumbs off the table”. In a report published in October by the Global Development and Environment Institute, Leonardo Stanley and I show that between 2006-2009, royalties and taxes paid to the Guatemalan government averaged a paltry $13 million per year and amounted to only 5.8% of total mine revenues and 15% of total earnings.

Comparisons are tricky because mining royalties and taxes vary so much within and between countries. But as a ball park figure, a PWC report estimated that South Africa—the world’s second largest gold producer—charged mining companies an income tax of 28% in 2010, plus remittance taxes and royalties. Venezuela recently imposed a royalty rate of 13% on gold mining, compared to Guatemala’s all-minerals royalty rate of 1%.

Goldcorp, which calls itself a “responsible mining” company, claims that it brings substantial benefits to Guatemala through local jobs, local procurement, and social investment in sustainable development projects, including a clinic, schools, and deforestation projects. There is little doubt that the 2000 or so jobs at the mine—about half of which are held by locals—bring significant benefits in the very poor local Mayan communities. Indeed, the availability and competition for mining jobs has generated intense social conflict. However, these jobs will vanish when the mine closes and there is little evidence of any lasting development benefits.

We found no data to support Goldcorp’s claim that it spends $150 million annually procuring local goods and services.  Based on case studies in other countries, it is likely that a substantial portion is accounted for by goods and services purchased locally from importers.  Local economic benefits flow when companies buy goods and services produced by local companies.  When they are imported, economic benefits mostly flow out of the country.

As for social investment, Goldcorp claims it has invested $20 million in sustainable development and reforestation projects. Local communities also received about $8 million of the royalties, bringing their total “return” on the mine to date to $28 million. Between 2006-2010, Marlin earnings totaled about $863 million. That means that the share of local communities in the Marlin bonanza amounted to about 3% of the income it generated–crumbs indeed. Meanwhile, Goldcorp has generously contributed to Canadian universities, including $10 million to Simon Fraser and $25 million to the Teffler Business School at the University of Ottawa.

Environmental risk

Gold mining poses severe environmental risks stemming from the use of cyanide and the potential release of heavy metals into ground and surface water. While the economic benefits of the mine are flowing largely to far-away shareholders, the risks are borne by local communities. As we document in the GDAE report, four independent studies have found evidence of heavy metals contamination, including arsenic leaking into groundwater. Heavy metals are extremely toxic to humans and other living beings—and they can remain in the environment for generations.

Goldcorp claims that “credible third party investigations” have found no evidence to date of water contamination. The available government reports, however, are not based on independent environmental monitoring but simply review and accept reports provided by Goldcorp.  The other source Goldcorp points to, the Community Environmental Monitoring Association, is financially supported by the company.

Two other environmental risks afflict the Marlin mine. Despite its promise to do so, Goldcorp has not made public a mine closure report and provides a surety bond of only $1 million. A report published by the Catholic Peace and Ecology Commission in July of 2011 estimated the costs of reclamation and monitoring following closure at $49 million. In addition, the mine was built to specifications that did not take climate change into account. High-intensity floods could breach the tailings pond and increase the risk of cyanide and heavy metals contamination. The number of high-intensity floods in Guatemala between 1990-2009 was nearly 300% greater than between 1970-1989.

What’s next?

Last month, in the face of substantial pressure from the Guatemalan government, the IACHR lifted its suspension order of the Marlin mine. Ignoring independent studies, the Government argued that company reports had found no proof of imminent or probable harm. While lifting the order to close, the IACHR ordered the government to “implement effective measures to prevent environmental pollution” and ensure that local people have access to water fit for human consumption and agriculture.

The IACHR is coming under increasing pressure by Latin American countries to back off from intervening in large development projects. In April, the Commission ordered Brazil to immediately suspend operations at the Belo Monte Dam Complex and undertake a consultation process to gain the “free, prior and informed consent” of local indigenous people. The IACHR backed down after Brazil threatened to withdraw from the Commission.

But Goldcorp and other large mining companies will continue to face scrutiny and pressure. In 2011, Ernst and Young found that “resource nationalism”—the attempt by host governments to get a larger share of the returns from mining—was the number one business risk facing mining and metals companies. In Guatemala, bills to reform the Minerals Royalty Law have been introduced in the legislature.

Shareholders, including large pension funds, are increasingly scrutinizing the human rights and environmental practices of mining operations. In September, Goldcorp was de-listed from the Dow Jones North American Sustainability Index.

And local opposition to the mining projects continues to grow. Dozens of plebiscites have been held in the Mayan communities in the Guatemalan highlands, including one in Quetzaltenango last February in which all but 30 of 6,758 voters rejected seven exploration licenses granted to Goldcorp.

With independent environmental monitoring and a closure report still lacking, and the continued failure to gain consent from indigenous communities—and the lack of a fair share of benefits– there is a long way to go before “responsible mining” comes to Guatemala.

Download the full report in English or Spanish. Read the executive summary here. Watch two Real News Network interviews with Zarsky on the report, here and here.

View Part I of the interview here.

View part II of the interview here.

Climate policy may have fallen off the US legislative agenda but the evidence that the planet is on a path to catastrophic climate change keeps mounting. In early May, the international Arctic Monitoring and Assessment Program found that temperatures in the Arctic in the last six years were the highest since measurements began in 1880. Arctic sea ice is melting significantly faster than projected by the UN International Panel on Climate Change (IPCC) in 2007 and, along with melting ice sheets and glaciers, points toward a sea level rise of 35-63 inches by 2100.

Most people know by now that cutting emissions of greenhouse gases, especially carbon, is the only way to back off from a global warming “tipping point”– maybe around 2 degrees Celsius (4 degrees Fahrenheit)—that could trigger chaotic climate change. We are already nearly halfway there—the earth has already warmed by 0.75 degrees Celsius– and going strong. Under a “business as usual scenario (BAU),” carbon emissions will double by 2050 over current levels. Given the inertia in the climate system—carbon is very long-lived in the atmosphere–and the momentum of the fossil-fuel-based global economy, is it possible to reduce emissions enough and in time?

Let’s define the goal.  The first step is to stop the rate of increase in emissions, that is, stabilization; the second step is to reduce the rate of emissions. Both need to happen in the context of continued economic growth, especially in emerging economies like China and India but in the West and poor South as well.  While the basic dynamics are not scientifically disputed, the exact relationship between carbon emissions, global warming, and climate change is not known.   To avoid “dangerous climate change,” the IPCC recommends a target 35-50% cut in carbon emissions over BAU by 2030, and 80% by 2050.

The Carbon Mitigation Project at Princeton University posits an “interim goal” of a 100% cut by 2060. That means that despite GDP growth of some 5-6% per year in developing and 2% in developed countries and an addition of 1.5-2 billion people, emissions in 50 years would be the same as today.

To get your brain around this mind-boggling target, the Princeton Project offers the concept of a “stabilization triangle” made up of eight wedges, each representing a reduction of 25 gigatons (one gigaton is a billion tons) of carbon over 50 years.  Wedge strategies fall into four main categories: 1) fuel switching, ie substituting natural gas and nuclear for oil and coal plants; 2) forest and soil storage of carbon; 3)  carbon capture and storage; and 4)  energy efficiency and renewable fuels.

“Low carbon growth” entails the rapid adoption and diffusion of the technologies in the wedge strategies while promoting economic development.  According to a McKinsey report, achieving the stabilization target requires that carbon productivity—the amount of GDP generated per unit of carbon—increases by 5.7% per year from now to 2050. That’s three times faster than labor productivity rose in the US during the whole industrial revolution between 1830 and 1955.

Whether this is feasible will be known only in the trying. The World Bank’s Energy Sector Management Assistance Program recently published assessments of how to achieve low-carbon growth in six emerging market countries—China, India, Indonesia, Brazil, Mexico, and South Africa.

While each country has different technological, natural resource, and financial challenges and opportunities, what emerges from the studies overall is a picture of rapid technological diffusion, large-scale mobilization of targeted finance, and popular understanding and acceptance of the need for rapid change. Under such circumstances, low-carbon growth becomes a strategy for a new economic competitiveness based on a “green economy”.

Designing a low-carbon growth country strategy is relatively easy. But implementation is hard. It requires the intense engagement of the private sector, both business and finance, and community and civic groups. Most important, it requires comprehensive and visionary government leadership and well-crafted incentive-promoting policy.

Which brings us back to the US legislative agenda.  Markets, bless their hearts, are delivering aspects of low-carbon growth. According to a recent Pew report, US investment in clean energy surged in 2010 to $34 billion, up by 51% over the year before.  However, the US dropped to third place behind number one China at $54 billion and number two Germany at $41 billion—both countries with a much stronger government hand in proactively promoting low carbon growth policies.

I don’t regularly co-mingle with international human rights lawyers but I do regularly investigate the local sustainability impacts of foreign investment, including in the ethically and environmentally challenged extractives industry. Thus it was that in early December, I found myself at a conference in The Hague organized by the World Legal Forum. Tagged “Business and Community in Dialogue: Connecting Corporate Responsibility and Global Governance,” the conference aimed to promote the emerging UN Framework for business and human rights. The main draw was Harvard Professor John Ruggie, the UN Secretary-General’s Special Representative for Business and Human Rights and the primary mover and shaker in articulating and now operationalizing the Framework.

The Framework sprouted from the ashes of a long and bitter fight between business and NGOs. In the 1990s, concern about business abuses of human rights mushroomed as oil, gas and mining companies expanded into more marginal areas and as apparel, footwear and electronics industries began to outsource production to countries with poor working conditions.  An intense advocacy effort targeting the then-UN Commission on Human Rights led to the creation of the Draft Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights. While re-affirming that states have “primary” responsibility, the Norms asserted that companies have “secondary” but legally binding duties to uphold existing human rights treaties, including on worker rights, the environment, and personal security.  Willing to go along with the voluntary standards, business fought tooth and nail against the “legally binding” concept—and the Human Rights Commission did not adopt the Norms.

Enter round two.  At the Commission’s request, Kofi Annan appointed Ruggie to figure out how to move beyond the stalemate.  After three years of extensive consultation with governments, business and civil society groups around the world, Ruggie concluded that what was missing was a “focal point”, a framework articulating roles and responsibilities that could be embrace by all stakeholders. In June 2008, he presented to the Human Rights Council a policy—not a legal—framework based on three pillars:  protect, meaning state responsibility to legislate and regulate; respect, meaning corporate responsibility to act with due diligence and to address adverse impacts;  remedy, meaning greater access by victims to  judicial and non-judicial redress.

The Council enthusiastically embraced the “protect, respect, remedy” Framework, marking the first time the UN has adopted a substantive policy position on business and human rights, and asked Ruggie to stay on and “operationalize” it.  He and his team are on a whirlwind of conferencing and researching, including the December conference, which focused on “remedy”.  A set of draft principles for implementation of the Framework was released for comment at the end of November. A final draft will be presented to the Human Rights Council in June 2011.

What does—and doesn’t—the Framework offer?  Does it significantly move the agenda and portend real change in the way that business does business, or does it let business—and government – off the hook?

There is little doubt that the Ruggie process moved beyond stalemate and significantly deepened and broadened the global conversation about business and human rights.  Changing business norms is a slow process, involving much “hearts and minds” work to shift thinking and embrace, integrate and implement new values. By providing a forum and a focus for governments, business, and NGOs to talk, the Ruggie process has sparked and facilitated a lot of learning on all sides.

Though deeply engaged, human rights groups nonetheless remain cautious of what they fear could be a  voluntary “corporate social responsibility” approach not backed up by state legal muscle.  Speaking at the Conference, Audrey Gaughran, Amnesty International’s head of Business and Human Rights, pointed out, for example, that non-judicial mechanisms  have little or no capacity to actually deliver remedy to victims of human rights abuses unless companies are required by law to participate and compensate or change their practice. She highlighted the “National Contact Points” that implement the OECD’s voluntary Guidelines for Multi-National Enterprises, which have no authority to require companies either to participate in an investigation or to agree to a grievance resolution.

There is little doubt that a transformation in the way that business operates requires pithy state legislative and regulatory action, at the national and global level. But the innovation in the Ruggie Framework is that it holds that business has human rights responsibilities even in the absence of state action. In many instances of corporate abuse of human rights, companies have simply pointed the finger at the local government.

Optimistically, the Ruggie process will permanently shift the willingness of business to embrace human rights as part of modern corporate governance and management. Such a shift, in turn, would strengthen the resolve of governments to regulate and legislate. Indeed, the optimal outcome would be a mutually reinforcing process of ratcheting up commitments by both business and government, with civil society watch-dogging and helping both players. The risk is that, as with many “legally binding” attempts at global environmental and human rights governance, it falters in the implementation stage.

My guess is that it won’t. It’s not that legally binding global norms implemented in national law are not needed. They are. But without buy-in of “hearts and minds”, the legal approach doesn’t work, faltering either in adoption or enforcement. Transformation “from below” takes longer and it’s messier, but in the end, it is the stuff of lasting change in social norms.

For decades, progressive economists have argued that, as a development strategy, mining is a “resource curse”.  The main reason is that capital-intensive mineral exploitation creates enclaves with few positive spillovers, i.e. linkages to the local economy, and many negative social and environmental spillovers. Moreover, the rents and returns generated by mining can be—and in case after case have been shown to be—captured by local elites and foreign shareholders rather than distributed to or invested in local communities.  The upshot is that large-scale mineral-led development retards economic growth and innovation and promotes corruption and social conflict.

The World Bank takes an opposing view.  According to the International Finance Corporation (IFC), the private sector arm of the Bank and a leader in global project financing, mining unequivocally promotes development, especially for the poorest countries, by providing jobs, government revenues, and other local economic benefits. But for benefits to outweigh negative impacts, mining projects need proper governance. The IFC has developed Environmental, Health and Safety Guidelines expressly for the mining sector, as well as a larger set of Social and Environmental Performance Standards for all borrowers.   Together with the Equator Principles, the Performance Standards set a benchmark for global “best practice” for mining project lenders and global mining companies.

On the industry side, the International Council on Metals and Mining (ICMM), supports the IFC’s view emphasizing the role of corporate governance. The ICMM has developed “10 Principles for sustainable development”,  including ethical business practice and sound corporate governance, respect for human rights, continual improvement in environmental, health and safety performance,  and financial contributions to local communities.  ICMM members, which include CEOs of the world’s largest mining companies, have generally developed their own “corporate social responsibility” programs.

So who is right?  Is good global and corporate governance enough, and is it working? The issue is far from academic. In the past ten years, a minerals boom, fuelled largely by demand from rapidly growing China and India, has pushed a global expansion of mineral exploration and exploitation.  While plenty of mining takes place in developed countries, including Australia and Canada, the share in developing countries in Latin America, Africa and Asia is on the rise.

With the minerals boom has come a “conflict boom” pitting  local,  often indigenous communities against foreign mining companies. In one high profile controversy, the Inter-American Commission for Human Rights of the Organization of American States last May urged Guatemala to suspend operations at the Marlin gold and silver mine in the country’s indigenous highlands. In October, the Commission heard complaints about human rights abuses in mining operations in the Andean countries of Bolivia, Peru and Colombia. Conflicts abound as well in Africa and Asia.

While specific grievances differ, the overall contours of the conflicts are alarmingly similar. Poor and/or indigenous communities living close to large open pit and underground mines are often not consulted or even informed  before ground for the mine is broken—despite internationally recognized rights of indigenous peoples to “free, prior and informed consent”. There are also deep environmental and health concerns, including long-term impacts of heavy metals contamination of land and water that could destroy or undermine agricultural livelihoods.  Fears for the environment are fuelled by lack of local regulation and monitoring and little, if any, provision for contingent liabilities relating to mine legacy.  Finally, there is an abiding sentiment that economic benefits are few and unequally distributed: the fight for mine jobs splits communities; company financial contributions to local schools, hospitals etc are meager; infrastructure investment from royalties is all but non-existent.

An October 26 call for an end to mining by Catholic bishops in the Philippines poignantly summed up the sentiment:  “The people who had high hopes of being lifted from their sorry state of poverty were left to fend for themselves and grapple with the realities that there are no more fertile grounds to grow their food or natural river systems to catch the fishes for their day’s meal,… What pervades has been the situation of unpeace and disharmony. People in the islands have been constantly threatened by another prospect of systematic destruction of the island they call home.”

The gap in rhetoric between “corporate social responsibility” and “systematic destruction” is striking. Is the problem “bad behavior” by mining companies that have not yet fully embraced the IFC’s Performance Standards or the ICMM’s “10 Principles”?  There is certainly a long way to go before “best practice” is the norm.

But there is a deeper problem:   weak and often corrupt host states. No matter how “responsible” the company, it cannot take on crucial governance roles of the state. Only a host partner—a state with both institutional capacity and political accountability—can negotiate  and impose royalty and tax rates;   invest mining revenues in local development projects;  and create  and enforce a legal regulatory regime to protect the environment and ensure that human rights are articulated and protected.  Without such a state, the sustainable development efforts of foreign mining companies—no matter how well-intentioned– will be marginal and primarily serve their own interests.

Given the high social and environmental costs and risks, mining companies and project lenders seeking to promote sustainable development should invest only in those states that meet a minimum standard on a “governance capacity index”. Only with accountable, well-muscled states as partners can mining projects hope to avoid a “resource curse”.

In the indigenous, western highlands of Guatemala, a rebellion is swelling against the forces of global capitalism. Well, at least against its palpable manifestation—an open pit gold and silver mine owned and operated by the Canadian company Goldcorp.  The mine is seen as early warning of what could be a storm of foreign mining companies: the Guatemalan government has granted some 300 mining concessions, over 90% of them near indigenous communities. On June 18, some 12,000 indigenous people streamed into Huehuetenango to give a message to a visiting UN Special Rapporteur on Indigenous Rights:  “No to mining, yes to life”.

Goldcorp inherited the Marlin mine when it acquired Glamis Gold back in 2006. Since then, Goldcorp has emerged as the industry’s “growth leader” .   Its 2009 Annual Report boasts a five-year average return to shareholders of 21.2%–nearly double that of its “senior” competitors.

Goldcorp is riding the wave of a bull market.  Searching for a safe haven—a hedge against financial market instability—investors are feverishly buying gold.     Demand for gold is also being pumped by economic growth in China, mainly for jewelry and industrial uses. Already at 11% of the global gold market-the second highest in the world after India (the US is number three)–China’s demand for gold is expected to double over the next decade.

The boom in demand has surged the gold price.  In December 2005, gold sold for about $450 per ounce. By December, 2008, it had risen to $750, and by mid June of this year, it was trading for a spot price of $1240. Analysts predict that by the end of 2010, the gold price will rise to $1500—and keep on rising.

The ballooning gold price makes marginal mines—like Marlin—economically viable. Like oil, there is a limited amount of gold in the world. The easy- to- mine gold at the surface is pretty much mined out. What’s left is deeper in the ground and often—like Marlin—next to where people live.  To get at the gold, companies dig big pits and use a process called “cyanide heap leaching” to separate a gold-filled sludge from dug-up waste rock.  If gold companies were fully liable for the long term legacy costs of the mine—including management and monitoring of leached toxic materials like mercury, zinc, and arsenic –gold prices would have to rise a lot more to make many mines viable.

Gold production has fallen in recent years and companies are rushing to meet global demand: Goldcorp projects 57% growth in production over the next five years.  While Goldcorp rejoices in its good fortune, indigenous communities surrounding the Marlin mine are shaking in their boots—and, they claim, in their houses due to mine blasting.  Despite Goldcorp’s assurances that the mine will bring development and no negative environmental or health impacts, the town of Sipacapa rejected the mine by over 95% in a special self-organized “consulta” in June 2005.  That vote, the failure of the Guatemalan government and the mine to respect it, and continued local organizing eventually propelled the Marlin mine onto the international stage.

Guatemala is a signatory a number of international conventions on human rights:  ILO 169, which asserts the rights of indigenous peoples to “free, prior and informed consultation” about development projects that affect them; the UN Declaration on the Rights of Indigenous Peoples which goes even further, assuring the right to “free, prior and informed consent”; and most importantly, as it turned out, a number of human rights declarations—including on indigenous peoples and the environment—that are part of the  Organization of American States (OAS). However, Guatemala has enacted no domestic legislation to implement these rights.

Neither consultation nor consent have been in abundance at the Marlin mine:  a 2005 assessment by the IFC, which bankrolled the mine to the tune of $45 million, found that initial environmental and social impact assessments were both inadequate and not made available for public comment.  Numerous independent studies have raised concerns about the failure to respect the indigenous “consultas,” as well as environmental contamination, health, and a “climate of intimidation”. In the communities of San Miguel Ixtahuacan, in which 85% of the mine is located, intense social conflict has erupted between the 900 or so  mine workers and the mine “Resistencia”.

Pressed by a group of shareholders, Goldcorp itself commissioned an independent Human Rights Impact Assessment. Released in May, the report found numerous human rights infringements, including the right to consultation and free association, the failure to undertake  “due diligence on the potential negative social and cultural impacts of mining” and, perhaps most worrisomely,  the lack of an adequate mine closure plan.

T he report claims that the mine generates significant economic benefits in the form of jobs, royalties and taxes, and Goldcorp’s voluntary social investment.  However, the royalty rate–set by Guatemala’s Mining Law—is only 1% of production. Moreover, the company does not publish data about salary levels or job classifications, and local authorities do not publish data on how royalty payments are spent. According to its annual report, Goldcorp’s social investment funds are meager. Studies in process, including by a team from the Global Development and Environment Institute (including this author) are currently investigating   the economic costs and benefits of the mine.

A host of international organizations are weighing in.  Last month, the Inter-American Commission for Human Rights of the OAS ordered the Guatemala government to suspend operations at Marlin until health impacts on indigenous communities can be fully assessed. Earlier this month, James Anaya, the visiting UN Rapporteur, called on the government to suspend Marlin operations and grant no further mining concessions until the rights of indigenous peoples are protected in national law. Even Goldcorp’s own report recommended no further expansion of mining until human rights are addressed.

So what happens next? The Guatemalan government announced on June 24 that it would comply with the OAS order and suspend operations—but not right away. The government (rightly) needs to go through administrative procedures to determine “cause” and to ensure that its actions comply with national law. Importantly, the Minister of Energy and Mining resigned and his replacement is taking a conciliatory line.  Meanwhile, the mine is operating.  If the government does not suspend operations, the Guatemalan lawyers who initially asked for an investigation will take the case to the Inter-American Court of Human Rights, where the case will drag on for years.  The indigenous movement and its national allies, however, are growing stronger and are not about to back down on Marlin or the larger plans for mining in Guatemala. The last time that indigenous people in Guatemala mobilized for their rights, the government cracked down with a brutal and bloody repression. This time, the international human rights apparatus has been harnessed to their cause and expectations of global business have changed.  Who will blink?

Triple Crisis blogger Lyuba Zarsky was interviewed on Press TV May 14 on the BP oil spill in the Gulf of Mexico.

Arizona’s draconian anti-immigration law has galvanized popular protest and reignited demands in many quarters for an overhaul of US immigration policy. For those hoping that Obama’s next big legislative battle would be over climate change, however,   the immigration firestorm could not have come at a worse time. Besides eclipsing climate change in public debate, the shadow of Congressional action on immigration scuttled the support of a key Republican, Senator Lindsey Graham of South Carolina, for a Senate climate bill. Without Lindsey, the climate bill doesn’t have a prayer.

But apart from political minefields, are immigration and climate change such separate policy issues? Not if climate change is understood, as it should be, as a problem requiring urgent action both not only to reduce carbon and other greenhouse gas emissions but also to adapt to much more volatile local and regional climatic conditions driven by global warming.

A December, 2009 review of recent scientific studies concluded  that the average global temperature has risen by about 1.5 degrees Fahrenheit over the last 25 years, and ice caps, glaciers, ice-sheets and Arctic sea-ice are melting at an accelerating rate.  From a baseline of 1861, MIT scientists project a median rise in global temperature by 2100 of 5.1 degrees Centigrade—over 12 degrees Fahrenheit.

What does global warming have to do with migration? Plenty.  Besides sea level rise, which will force people to relocate from coastal areas, global warming will change patterns of rainfall, creating drought in some areas, flooding in others, and more intense cycles of both drought and flooding in still other areas. With ecological degradation and uncertain harvests, food supplies and livelihoods are likely to collapse, especially in already ecologically stressed and poverty-stricken areas.  If safety nets are non-existent or if they evaporate, social tension and violence are likely to erupt. Both loss of livelihood options and violence are push factors for migration and displacement.  Exact estimates are highly uncertain but, according to a report published by Columbia University, “the scope and scale could vastly exceed anything that has occurred before”.

Most experts agree that ‘climate migrants’ are most likely to follow established internal and international migration routes.  Drought and soil erosion have already pushed people out of poor, arid parts of Mexico. A 1994 study by the US Commission on Immigration Reform found, based on Mexican government data,  that some 900,000 people were leaving arid and semi-arid areas of Mexico every year because land degradation made it impossible to make a living.  How many returned, relocated within Mexico or migrated to the US is unknown.  What seems clear, however, is that Mexicans hard hit by projected future declines in rainfall of 70 percent in the semi-arid and arid north will be forced to consider migration.

Besides declines in rain runoff—which will impact both smallholder farm dependent on rain-fed agriculture and large irrigated commercial farms—Mexico is vulnerable to sea level rise and to cyclone events. Tropical storm Noel in 2007   inundated some 80 percent of the state of Tabasco displacing, at least temporarily, up to one million people. Migration requires resources and the poorest Mexicans may have no option but to remain in place, even under extreme economic and ecological stress. Those with means or relatives in other parts of Mexico or the US have the option to migrate.

What should the US do to prepare for the impacts of climate change in Mexico?

First, through bilateral and multilateral initiatives, the US should support investment in climate adaptation projects in Mexico such as disaster risk management, water harvesting and storage infrastructure, and enterprise development aimed at diversifying livelihoods.  Local investment in building resilience to climate change would work to decrease migration. At the Copenhagen climate conference last December, Secretary of State Hilary Clinton said that the US would mobilize up to $100 billion of private and public monies for adaptation in the ‘least developed’ countries. Given the large stake in the welfare of its nearest neighbor, the US should take a pro-active role in mobilizing adaptation financing in North America.

Second, the US should overhaul its immigration policy with an eye towards both human rights and climate change “push” factors from Mexico (and Central America).   Many Mexicans already migrate to the US on a seasonal basis, returning home after working and sending back remittances.  By increasing the uncertainty of rainfall and thus agricultural crops, climate change will give further impetus to ‘circular migration’.  Rather than providing no option other than becoming undocumented workers, the US should facilitate and manage seasonal migration and disaster-related migration.  It should also explore eligibility for permanent migration due to environmental stress.

Climate change will put new pressures on neighborly relations between the US and Mexico. Bigger fences and more interrogations will do little to hold back the underlying environmental and economic currents pushing people to migrate.  Better to prepare for climate change and build cross-border solidarity. We are all going to need it.

The crisis in global climate talks may have clouded the future of the Kyoto Protocol but the Clean Development Mechanism seems to have a life of its own. The CDM, one of Kyoto’s three implementation mechanisms, allows companies in developed countries with Kyoto targets to offset their emissions by buying “certified emission reductions” (CERs) from investment projects in developing countries. As of November, 2009, some 1,860 projects in 58 countries were registered with the CDM, with another 400 in the pipeline. Some 335 million CERs have been created, worth, at a carbon price of $10-30/ton, $3-10 billion.

Once hailed as an ingenious way to overcome political resistance in the North to costly action to reduce emissions while simultaneously providing mitigation investment funds to the South, the CDM has recently come under intense criticism, essentially for a range of governance failures. In a February, 2010 article in Harper’s, investigative journalist Mark Shapiro provides persuasive evidence that many of the CERs—which are issued at the beginning of a project as an estimate of expected future emissions reductions—are not later credibly validated to determine that the reductions, in fact, occurred. Indeed, the UN recently de-certified the two leading validating companies on grounds of inadequate methodology and incompetent staff. While both were subsequently re-certified, deep conflict-of-interest problems remain: the companies who verify that the project will reduce emissions (and that the project wouldn’t happen without CDM funding) are paid by the very same companies that are seeking the CDM finance. Estimates of the percentage of the CERs that represent little more than speculative hot air range from 20 to 75 percent.  The CDM, concludes Shapiro, is “conning the climate.”

But the climate is not the only casualty of the poorly governed CDM.  From around the world, snapshots are emerging of a range of harms inflicted on communities—typically poor and marginalized– living near CDM projects.

Take the case of A.T. Biopower, the first CDM project in Thailand. The project entails building five rice-husk-burning biomass power stations. The first was built in the town of Pichit, near the Nan River in north-central Thailand. According to project developers—and the UN-certified CDM project verifier–rice husks are wastes dumped by local rice farmers. Using them to burn energy replaces power which would otherwise be generated by oil, coal or natural gas, making the project climate neutral and “sustainable.”

However, there is a fatal flaw in the logic: the claim that rice husks are “waste” was never substantiated. The truth is that local farmers use the rice husks to absorb chicken droppings, creating a natural agricultural fertilizer. Far from being “waste,” the rice husks are essential to agriculture, the main source of livelihoods in Pichit.  With the new demand by the power plant, the price of rice husks has risen sharply and they are no longer affordable. Local farmers have to replace, as best they can, the natural fertilizer with chemical fertilizers, destroying what was a self-sufficient system. Moreover, the biomass plant generates a fine dust which, when inhaled, causes silicosis. People living near the Pichit power station have complained to the company—to no avail–about skin rashes and breathing difficulties.

Concerned about environmental, livelihood and health impacts, the community of Nan Song, about 50 kilometers away from Pichit, fought A.T. Biopower for six years to keep from being the site of another biomass plant—a fight that entailed setting up a conservation organization and requesting an investigation by Thailand’s National Human Rights Commission.  The Commission recommended that the power plant not be built in Nam Song, which sits on a flood plain, on the grounds that it would violate human rights by polluting the river and damaging villagers’ livelihoods.

There are many other stories. In Brazil, the extensive root systems of eucalyptus plantations planted as offsets have drained the water supplies of local, often indigenous, agriculture-based communities. In Uganda, a forest planting project which allowed a Norwegian power company to avoid emissions reductions led to the displacement of 8,000 people.  The CDM’s large investment in big hydropower projects, especially in China, has enabled the displacement of thousands.

Negative social and environmental impacts of foreign investment on poor local communities in developing countries are, alas, nothing new. But the CDM is a creation of the United Nations and depends on it for its operations. The UN, one would have thought, would seek to enforce its own human rights conventions. Moreover,  the International Finance Corporation, the private sector arm of the World Bank—a UN organization–has been actively engaged for more than a decade in efforts to govern its project finance on social and environmental grounds.

In 2006, the IFC adopted a set of eight “Performance Standards on Social and Environmental Sustainability.” The Standards are modeled on the Equator Principles, self-described as a “financial industry benchmark for determining, assessing, and managing social and environmental risk in project financing.”  As of 2009, some 65 financial institutions had signed up to the Principles, including giants such as Bank of America, Credit Suisse, and Lloyd’s Banking Group.

The Performance Standards are applied to all IFC projects and include requirements for social and environmental impact assessment, changes in project design to avoid or minimize physical or economic displacement, and protections for indigenous people. The IFC has also established an Office of Compliance Advisor Ombudsman to field complaints from communities impacted by IFC- (and MIGA) funded projects; and has a monitoring and evaluation system.  While it is far from clear that the Performance Standards (or Equator Principles) are effectively implemented and enforced, the IFC is miles ahead of the CDM, which has no local impact standards at all.

The CDM is, in essence, a project financing mechanism, one that is supposed to promote “sustainable development” as well as mitigate greenhouse gas emissions. To begin to fulfill its mission, substantial reforms and innovations in governance are sorely needed.  The CDM could do worse than to look towards the IFC as a starting point.