If the United Nations Climate Change Convention's fourteenth meeting in Poznan, Poland, this month has taught us anything, it’s that the game of climate change has a lot of losers, seriously threatening the lives and livelihoods of the three billion people who live on less than US$2 per day, those who live without proper sanitation, those dependent on increasingly variable rainfall for agricultural subsistence, those without access to clean water and those without proper health care.  But let’s not forget about the real victims here: those who have spent the last century getting rich as hell on oil.

This is the ace Saudi Arabia has up its sleeve, blocking global negotiations on climate change adaptation until it can get reparations for predicted losses to big oil.

Global markets malfunction when the true values of goods and services are not calculated. Natural resources have always had market value (trees in board feet, fish in pounds of edible flesh, coal in kilowatt hours) but these items also have value to nature that goes uncounted and unpaid for (forests for eating up carbon dioxide, fish as part of the ocean’s food chain, beautiful mountaintop views).

Be it a polluter pay model like Superfund that retroactively fixes externalities, a cap and trade program that restricts supply and therefore creates a price on pollution, or contingent valuation that attempts to calculate that for which there is not market (like a person’s willingness to pay for a beautiful sunset or knowing that penguins exist in nature even if you'll never see them), ensuring that true costs and benefits are reflected in markets has long been the job of the environmental economist.

And this is what environmental economics has done in creating the Clean Development Mechanism (CDM), an arrangement under the Kyoto Protocol that allows developing countries to earn credits for emission reductions and removals equivalent to one ton of carbon dioxide. These credits can be traded and sold by industrialized countries to meet their binding carbon dioxide reduction targets under the Kyoto Protocol.

This levels out the playing field so that countries who, for example, have swaths of tropical forests that would otherwise be cut down and sold in board feet, will instead protect them and are compensated for the value that their forest provides to the globe by removing carbon dioxide from the atmosphere.

And now Saudi Arabia has its eye on that pool of cash, too. Even if it weren’t an oligopoly, big oil has gotten rich by abusing malfunctioning markets, profiting from its unencumbered pollution and spewing negative externalities across the globe. And now that the playing field is evening out, Saudi Arabia is arguing that it should be paid for investing in a technology (carbon capture and storage technology, or CSS) that might (and it’s a significant ‘might’) clean the industry that has arguably contributed the most to global climate change.

It’s kind of genius, when you think about it.

Let’s use an imaginary example. Imagine a world where kids could do one of two things outside of school: they could play outside or they could play inside with toys.  Playing inside with toys wasn’t necessary, but it was, in many ways, the easier option. Now imagine that a few companies controlled the manufacturing and distribution of toys and together they decided to use cheap materials so that they could turn higher profit.  After years of scientific research, the world learned that this cost-cutting material was toxic to the health of children everywhere.  Attitudes changed and the demand for toxic toys went away. At the same time, kids started playing outside more –- in their backyards and in parks and playgrounds.  Then governments decided to start subsidizing parks because they realized that playing outside had an extra benefit to kids (improved health by way of increased exercise). Park owners were never really getting paid for supplying that value to the public, and governments were concerned that if parks didn’t have enough money they would have to sell their property to a higher value use.

Then let’s imagine that the toxic toy cartel found out that the pool of money for children’s recreation got bigger as the society invested in parks to make sure that the public benefit of parks was protected.  And the toxic toy companies, fearing bankruptcy because of fledgling demand, asked to get part of these monies to make new toxic-free toys for kids.  That is essentially what Saudi Arabia is asking of the CDM.

"Saudi Arabia believes mitigation actions on climate change could be a threat to its profitable oil business and considers CCS as a key issue to perpetuate the world's dependence on oil," said a representative from the Climate Action Network according to a report from Green Prices.

I know what you’re thinking. Saudi Arabia heard about the US bailing out Detroit’s Big Three and they decided that if other morally vacant industries can get money for failing financially after unabashedly causing climate change that they can too. Not so. The CCS plan has been on the books for awhile. As early as 2006, Conference Chair Mohammed Al-Sabban, Senior Advisor to the Minister of Petroleum and Natural Resources of Saudi Arabia, has noted that oil should not be made a victim by the activities of other countries.

According to an ENN article, Saudi Arabia is working with Norway  to get CCS included in the CDM to help build a global market for the technology.  Building a global market for carbon sequestration is a fine goal, but should it really be supported by the same program set up to aid the poorest nations around the world in protecting their meager resources?  Moreover, if this is an issue of demand, would a move like this by industry even count under the law of additionality of the CDM?  (Additionality ensures that the emissions reduction would not have happened otherwise, so there is no double counting.)  I’m thinking no.

Truly, it would be a wild abuse of the system set up to reverse the damage done by the burning of fossil fuels.  At a time when the world is moving away from oil production and use and reforming the way our world operates on clean, renewable sources of energy, conservation, and cradle-to-cradle production and consumption patterns, this is a major step backward and a corruption of the intent of the CDM.  Let's not reward big oil any more than we already have.