Najib Saab, December 2021

Just as wars create a new social class of profiteers known as war profiteers, the battle against climate change will undoubtedly create a new class of disaster traders, whom we might call the climate profiteers.

Whereas those who invest in a Green Economy have the right to make a profit if they make sound and fair choices and manage their money wisely, it is unacceptable to accumulate wealth by greening profits generated from polluting industries, joining the prevailing practice of laundering or whitewashing money from drugs and other illegal activities.

What happened recently at the Onyx power plant in the Netherlands proves that the implementation of climate commitments will not be easy, and that new laws and regulations need to be put in place to prevent the utilization of climate measures in order to collect huge profits from unfair trade.

In 2015, Engie, a French company, built the Onyx coal-fired power plant in Rotterdam, which was promoted at the time as one of the "cleanest and most efficient coal plants in the world". This was at a time when the term "clean coal" was brandished to refer to the burning of coal in more efficient and less polluting methods. However, time proved that this so-called "cleanest coal power station in the world" caused immense pollution and emissions, with harmful effects on health and the climate as well. In addition to the fact that carbon emissions from this plant prevent the Netherlands from fulfilling its climate commitments on time, they contribute greatly to polluting the air and endangering human health and nature.

This prompted the Dutch government to take a decision in 2018, just 3 years after the start-up of the new plant, to stop all coal-fired plants by 2030. This coincided with Germany's announcement that it would shut down its coal-fired power plants in 2038. A mysterious American investment company, Riverstone Holdings, found in these developments a convenient opportunity to purchase coal-fired plants in the Netherlands and Germany at cut-rates, including the Onyx plant. Other than profiting from operating the plant, the company was looking forward to inflated compensation profits, if forced to stop. This is exactly what happened when the Dutch government recently decided to immediately close the Onyx plant in particular, with the aim of achieving a rapid reduction in emissions. The new government coalition in Germany also announced that the closing date for coal plants will be pushed back by 8 years, from 2038 to 2030.

Netherlands led the way with its government agreeing to pay an additional $240 million to the investment company operating the plant in compensation for the early termination of its operations. The company will have to stop production completely within two months of the agreement's entry into effect, and dismantle the plant within 3 years. A leading Dutch newspaper, de Volkskrant, commented on the agreement saying that "the mysterious American investment company, of undisclosed ownership, knew that it was a winner either way: if it continued to operate using coal, with the pollution associated with it, or was asked to close in exchange for a large compensation, due to climate measures". What happened in the Netherlands is an example of what we can expect elsewhere in the world, where coal plants benefit from the current rise in electricity prices, due to reduced gas supplies, and then double their profits when they are ordered to cease operation.

Coal is not the only area in which climate and environment traders are investing. Restrictions on waste production and treatment in some countries have inspired disaster traders to devise methods for exporting them to other countries with fewer restrictions. This includes hazardous and toxic waste, together with solid household waste, which international law prohibits from being exported except to countries that have the necessary equipment to properly treat them. To bypass this obstacle, waste traders export those as raw materials to third world countries, where they are dumped untreated. International traders work together with local traders, operating under the guise of waste processing companies. A senior international official told me that the volume of illegal international trade in waste probably exceeds that of drugs.

Under the guise of providing clean solar energy, some companies are marketing poor-quality PV panels that use raw materials extracted by methods that deplete and pollute nature's resources without restrictions, and are manufactured with poor specifications, which makes them inefficient and subject to damage within a short period. This leads to an increase in depleting resources and waste pollution at a rate greater than the desired benefit from producing clean renewable energy. Fictitious companies have proliferated, chasing after internationally funded donations for projects and programs to protect the environment and combat climate change, while the real benefits are limited to a group of traders and influential politicians.

Some use the slogan of circular economy, which is based on reusing materials and re-manufacturing the discards, as an excuse to avoid rationalizing consumption in order to reduce quantities in the first place. Waste, in their misconception, is a source of wealth. This led to the emergence of a new category of waste recyclers, who take away light and expensive waste, and throw away the rest without treatment. The trade in used plastic is evidence of this, as about 400 million tons are exported annually to countries that apply lower standards and provide cheaper labor for manual sorting, not taking into account that the bulk of exported plastic is not suitable for recycling.

It is necessary to put in place strict legal constraints that prevent turning the measures to protect the environment and address climate change, into a tool for opportunity seekers, thus making climate profiteers dominant, at the expense of the climate poor.