The day before yesterday

In An Inconvenient Truth (and here), Al Gore quotes Winston Churchill: "we are entering a period of consequences". The phrase came to mind in connection with at least three different things to which I was more or less paying attention on Wednesday, 6 December: the publication of the report of the Iraq Study Group; the pre-budget statement from Gordon Brown; and my own meanderings as a country mouse visiting The City, which took in a street opera and a discussion of carbon trading.

The ISG report may bang a few Washington heads together over the consequences of what has happened since the 2003 invasion. But both the shriller critics of the Iraq war, such as Greg Palast, and the more thoughtful, such as Mark Danner (see Iraq: the war of the imagination), point to reasons why, in the unlikely event it is implemented, this is unlikely to be enough.

Meanwhile, in Britanistan, Chancellor Brown chose not to announce the "green" budget some had hoped for. Small additional revenues from travel taxes (£5 on flights and £23 on a motorist who drives 10,000 miles a year) will be used to fill a hole in finances, not to transform the transport system (never mind the whole economy). If Brown is serious about the recommendations of his own Stern review, he is not showing his cards now.

My own business in London allowed time to contemplate two very different approaches to dealing with the consequences of the actions of the majority of us in rich industrial societies.

The first was And While London Burns, an "opera for one" about climate change which you download onto an MP3 player and then follow on foot as an audio guide leads you around byways in the Square Mile.

I will not review it in detail here, but this is a serious, imaginative, engaging, astute, ambitious and resonant but musically weak drama. A central theme is fully imagining, and taking responsibility for, the consequences of our actions.

In three acts, Fire, Dust and Water, treading from the earth of a once-buried temple of Mithras to the golden ball of fire thrust into the air on top of The Monument, the opera glimpses down many alleys (and passes roads untaken, from Blake to the Blitz), but it centres on the mental breakdown/liberation of a City worker at an investment bank that services BP, one the great beasts of the carbon web.

Among several effective sequences is a walk around the underground ring in Bank station passing exits one to six as the possible consequences of one through six degrees of climate change are dramatised. No need, now, to read Mark Lynas's forthcoming book! (One note of detail: I did the walk on a cold winter day when the fans, which extracted heat from deep below ground during London's summer heatwave, were not turning. So the dramatic effect here was lost.)

But what works best dramatically in the opera is also, perhaps, where one of the greatest questions lies: the consequences of imagining downfall and apocalypse, and how this makes one feel, think and act.

Because even though And While London Burns searches for optimism – finishing with a chorus "we could build a new city" – a strong sense of apocalypse runs through this "requiem for a warming world". And for the protagonist, this is a drama of escape: to follow the trail of his lost love who gave up her safe middle class job and now hides out on some remote sunny beach, waiting for the downfall of Empire.

Visions of catastrophe run through many cultures. In the West, drawing on traditions that include the pursuit of the millennium, these took a new turn with the industrialisation of work and war, and a growing sense that humans themselves can destroy each other and the planet on a massive scale. (Cruel pre-modern imaginings of destruction by supernatural fury still thrive in things like the Left Behind series).

My generation, growing up in the last days of the Cold War, could with good reason allow nuclear annihilation to squat on our dreams: a reality well captured in Jonathan Schell's The Fate of the Earth (1982). So the idea of a human-caused catastrophe that only cockroaches and Keith Richards survive is nothing new. The apocalypse outlined by James Lovelock sometimes seems mild by comparison.

There is nothing wrong with a bit of apocalyptic imagining. (Children of Men is one of the better recent genre films). In connection with climate change I have indulged in it myself in an article sensationally titled Tsunami coming for us all (Andrew Baird and others have cast doubt on the idea that reefs and mangroves really did afford significant extra protection to coastal communities, but I think the main point of the piece – that we need to think harder about the human impact on nature – still stands).

Giving some space for the worst imaginings can help us to deal with them. But how?

As I hear it, for the protagonist of And While London Burns (and, I guess, its authors), there can be no salvation within "the system". This belief is most clearly illustrated through the treatment of Swiss Re, the giant reinsurance company caught at the heart of what the opera portrays as a spinning paradox. Swiss Re thrives on "just the right amount of disaster" but would be ruined by a sharp increase in damages associated with climate change. Meanwhile, Swiss Re must invest its revenues in the very oil and gas companies that cause climate change.

The company and the network of which it is part must look for ever new markets in order to grow, and in an image of a crazy, dizzy dance, round and round the Gherkin, the sense of a snake eating its own tail, with the ultimate madness – echoed by voices around and around on the soundtrack – "they are even selling the sky".

This sounds like a reference to carbon trading, which was the subject of another bit of business I had in London that day: a panel debate at ABN AMRO on "Gourmet Carbon versus Commodity Carbon".

Ricardo Bayon, co-editor of Voluntary Carbon Markets (Earthscan, January 2007), set the context. Regulated carbon markets are growing fast from a total volume about $9bn in 2005 to $21.5bn in just the first nine months of 2006 (with the EU ETS accounting for $18.5bn and the CDM about $3bn).

Voluntary markets were smaller and harder to measure, he said, but the best guess was that ten to twenty million tonnes of CO2 were traded in 2005 at an average of about $10 per tonne – making a market worth $100m to $200m market last year.

So the voluntary market is small – perhaps just one hundredth the size of the regulated market, but it is growing fast too.

[Disclosure: Coral Bones has received a grant from (among others) Ecosecurities, a major player in the CDM, and carbon offset for emissions associated with the project has been donated by Climate Care]

The six panellists and, I guess, most of the hundred or so attendees from organisations with names like Ecosystems Markets and Evolution Capital, clearly do not believe in dropping out. Some see a bright new market, and a chance to make money. And most clearly believe it is possible to change "the system" from within.

Here is a sketch of a case in their favour. First, as Pedro Moura-Costa of Ecosecurities put it, a voluntary market can be a place for experimenting and getting things to work ahead of a regulated market that requires compliance. Perhaps the most striking example of this pre-compliance phase may prove to be the State of California, where legislators and the governator have agreed to return total emissions to 1990 levels by 2020, and 80% cut them by 2050 under a cap-and-trade system. Just to reach the 2020 target would mean a cut of around [did he say 25% or 45%?] on present emissions, said panellist Joe Nation, who is a California state assemblyman (D) and a co-author of AB 32. The governor is pushing for this in six months because, said Nation, "like 87% of Americans" he understands the gravity of the situation. (The Bush administration is threatening to sue California. As no one quite said: "bring them on".)

Second, a voluntary market can allow individual consumers and groups of consumers to express preferences and back them with money, and maybe this can aggregate into something good.

A number of arguments are made against this second point. For example, carbon sequestration in forestry has been described as like drinking water to lower sea level (attrib. Oliver Rackham) or worse (The Cornerhouse). And offsets are just a way of buying one's way out of a guilty conscience and don't lead to the changes in behaviour needed to actually reduce emissions (this criticism has been given life by a comparison to indulgences offered by priests in Europe in the Middle Ages).

On the indulgence point, well yes Martin Luther was right that the system was corrupt. But what if the priest or monastery spent the money raised from indulgences on something that actually benefited of the poor, the sick and the abandoned rather than timeshare on plainsong?

What if purchaser of the voluntary offset has a certificate he or she feels she can trust which says that something less bad than nothing at all was done with the money to reduce emissions that would otherwise have taken place? (Imagine a priest with a chain of custody from your indulgence all the way to the hot soup going into the mouth of a starving peasant). Millions of people in rich countries donate hundreds of million of dollars and euros to development organisations to alleviate poverty on the basis of evidence that is often as sketchy, and/or does as little to address the root problem.

A voluntary carbon offset standard (VCS) was, not suprisingly, central to the discussion at ABN AMRO. One should remember the lessons of the CDM, said Mark Kenber of The Climate Group. In the early days, "we thought it would solve everything" - climate change, global poverty, injustice. Of course it hasn't but, he said, it is a first step. And until such time that the international community agrees on an enforceable system that enforces stabilisation at "450ppm or whatever the science indicates" the players sould try to develop a robust international standard that permits the market in reductions to grow (The Climate Group has this. See also this from The Carbon Trust.)

There's a lot to think about here (the interim statement on Coral Bones is: "offsets do not solve the problem of emissions from flights or make the project 'carbon neutral'. But they are better than doing nothing to account for emissions"). Do we really need carbon markets to protect the likes of Mexico's Sierra Gorda, as some panellists argued? It begins to seem like some sort of religion.

It's a no brainer is that we need to do a lot more soon, however powerful the interests vested against change.

A final point. Al Gore chooses an odd quote for his foreword to Voluntary Carbon Markets: "Between the idea and the reality...Falls the Shadow". If you read the whole poem from which this quote is taken it's not exactly encouraging, but then its author knew more about London and desolation than most.