[Reader-list] business deals of Dr Pachauri

[Nagraj Adve]

 Questions over business deals of UN climate change guru Dr Rajendra
Pachauri The head of the UN's climate change panel - Dr Rajendra Pachauri -
is accused of making a fortune from his links with 'carbon trading'
companies, Christopher Booker and Richard North write.


Published: 8:30AM GMT 20 Dec 2009 Telegraph
  No one in the world exercised more influence on the events leading up to
the Copenhagen conference on global warming than Dr Rajendra Pachauri,
chairman of the UN’s Intergovernmental Panel on Climate Change
(IPCC<http://www.ipcc.ch/>)
and mastermind of its latest report in 2007.

Although Dr Pachauri is often presented as a scientist (he was even once
described by the BBC as “the world’s top climate scientist”), as a former
railway engineer with a PhD in economics he has no qualifications in climate
science at all.

What has also almost entirely escaped attention, however, is how Dr Pachauri
has established an astonishing worldwide portfolio of business interests
with bodies which have been investing billions of dollars in organisations
dependent on the IPCC’s policy recommendations.

These outfits include banks, oil and energy companies and investment funds
heavily involved in ‘carbon trading’ and ‘sustainable technologies’, which
together make up the fastest-growing commodity market in the world,
estimated soon to be worth trillions of dollars a year.

Today, in addition to his role as chairman of the IPCC, Dr Pachauri occupies
more than a score of such posts, acting as director or adviser to many of
the bodies which play a leading role in what has become known as the
international ‘climate industry’.

It is remarkable how only very recently has the staggering scale of Dr
Pachauri’s links to so many of these concerns come to light, inevitably
raising questions as to how the world’s leading ‘climate official’ can also
be personally involved in so many organisations which stand to benefit from
the IPCC’s recommendations.

The issue of Dr Pachauri’s potential conflict of interest was first publicly
raised last Tuesday when, after giving a lecture at Copenhagen University,
he was handed a letter by two eminent ‘climate sceptics’. One was the
Stephen Fielding, the Australian Senator who sparked the revolt which
recently led to the defeat of his government’s ‘cap and trade scheme’. The
other, from Britain, was Lord Monckton, a longtime critic of the IPCC’s
science, who has recently played a key part in stiffening opposition to a
cap and trade bill in the US Senate.

Their open letter first challenged the scientific honesty of a graph
prominently used in the IPCC’s 2007 report, and shown again by Pachauri in
his lecture, demanding that he should withdraw it. But they went on to
question why the report had not declared Pachauri’s personal interest in so
many organisations which seemingly stood to profit from its findings.

The letter, which included information first disclosed in last week’s Sunday
Telegraph, was circulated to all the 192 national conference delegations,
calling on them to dismiss Dr Pachauri as IPCC chairman because of recent
revelations of his conflicting interests.

The original power base from which Dr Pachauri has built up his worldwide
network of influence over the past decade is the Delhi-based Tata Energy
Research Institute, of which he became director in 1981 and director-general
in 2001. Now renamed The Energy Research Institute, TERI was set up in 1974
by India’s largest privately-owned business empire, the Tata Group, with
interests ranging from steel, cars and energy to chemicals,
telecommunications and insurance (and now best-known in the UK as the owner
of Jaguar, Land Rover, Tetley Tea and Corus, Britain’s largest steel
company).

Although TERI has extended its sponsorship since the name change, the two
concerns are still closely linked.

In India, Tata exercises enormous political power, shown not least in the
way it has managed to displace hundreds of thousands of poor tribal
villagers in the eastern states of Orissa and Jarkhand to make way for
large-scale iron mining and steelmaking projects.

Initially, when Dr Pachauri took over the running of TERI in the 1980s, his
interests centred on the oil and coal industries, which may now seem odd for
a man who has since become best known for his opposition to fossil fuels. He
was, for instance, a director until 2003 of India Oil, the country’s largest
commercial enterprise, and until this year remained as a director of the
National Thermal Power Generating Corporation, its largest electricity
producer.

In 2005, he set up GloriOil, a Texas firm specialising in technology which
allows the last remaining reserves to be extracted from oilfields otherwise
at the end of their useful life.

However, since Pachauri became a vice-chairman of the IPCC in 1997, TERI has
vastly expanded its interest in every kind of renewable or sustainable
technology, in many of which the various divisions of the Tata Group have
also become heavily involved, such as its project to invest $1.5 billion
(£930 million) in vast wind farms.

Dr Pachauri’s TERI empire has also extended worldwide, with branches in the
US, the EU and several countries in Asia. TERI Europe, based in London, of
which he is a trustee (along with Sir John Houghton, one of the key players
in the early days of the IPCC and formerly head of the UK Met Office) is
currently running a project on bio-energy, financed by the EU.

Another project, co-financed by our own Department of Environment, Food and
Rural Affairs and the German insurance firm Munich Re, is studying how
India’s insurance industry, including Tata, can benefit from exploiting the
supposed risks of exposure to climate change. Quite why Defra and UK
taxpayers should fund a project to increase the profits of Indian insurance
firms is not explained.

Even odder is the role of TERI’s Washington-based North American offshoot, a
non-profit organisation, of which Dr Pachauri is president. Conveniently
sited on Pennsylvania Avenue, midway between the White House and the
Capitol, this body unashamedly sets out its stall as a lobbying
organisation, to “sensitise decision-makers in North America to developing
countries’ concerns about energy and the environment”.

TERI-NA is funded by a galaxy of official and corporate sponsors, including
four branches of the UN bureaucracy; four US government agencies; oil giants
such as Amoco; two of the leading US defence contractors; Monsanto, the
world’s largest GM producer; the WWF (the environmentalist campaigning group
which derives much of its own funding from the EU) and two world leaders in
the international ‘carbon market’, between them managing more than $1
trillion (£620 billion) worth of assets.

All of this is doubtless useful to the interests of Tata back in India,
which is heavily involved not just in bio-energy, renewables and insurance
but also in ‘carbon trading’, the worldwide market in buying and selling the
right to emit CO2. Much of this is administered at a profit by the UN under
the Clean Development Mechanism (CDM) set up under the Kyoto Protocol, which
the Copenhagen treaty was designed to replace with an even more lucrative
successor.

Under the CDM, firms and consumers in the developed world pay for the right
to exceed their ‘carbon limits’ by buying certificates from those firms in
countries such as India and China which rack up ‘carbon credits’ for every
renewable energy source they develop – or by showing that they have in some
way reduced their own ‘carbon emissions’.

It is one of these deals, reported in last week’s Sunday Telegraph, which is
enabling Tata to transfer three million tonnes of steel production from its
Corus plant in Redcar to a new plant in Orissa, thus gaining a potential
£1.2 billion in ‘carbon credits’ (and putting 1,700 people on Teesside out
of work).

More than three-quarters of the world ‘carbon’ market benefits India and
China in this way. India alone has 1,455 CDM projects in operation, worth
$33 billion (£20 billion), many of them facilitated by Tata – and it is
perhaps unsurprising that Dr Pachauri also serves on the advisory board of
the Chicago Climate Exchange, the largest and most lucrative carbon-trading
exchange in the world, which was also assisted by TERI in setting up India’s
own carbon exchange.

But this is peanuts compared to the numerous other posts to which Dr
Pachauri has been appointed in the years since the UN chose him to become
the world’s top ‘climate-change official’.

In 2007, for instance, he was appointed to the advisory board of Siderian, a
San Francisco-based venture capital firm specialising in ‘sustainable
technologies’, where he was expected to provide the Fund with ‘access,
standing and industrial exposure at the highest level’,

In 2008 he was made an adviser on renewable and sustainable energy to the
Credit Suisse bank and the Rockefeller Foundation. He joined the board of
the Nordic Glitnir Bank, as it launched its Sustainable Future Fund, looking
to raise funding of £4 billion. He became chairman of the Indochina
Sustainable Infrastructure Fund, whose CEO was confident it could soon raise
£100 billion.

In the same year he became a director of the International Risk Governance
Council in Geneva, set up by EDF and E.On, two of Europe’s largest
electricity firms, to promote ‘bio-energy’. This year Dr Pachauri joined the
New York investment fund Pegasus as a ‘strategic adviser’, and was made
chairman of the advisory board to the Asian Development Bank, strongly
supportive of CDM trading, whose CEO warned that failure to agree a treaty
at Copenhagen would lead to a collapse of the carbon market.

The list of posts now held by Dr Pachauri as a result of his new-found world
status goes on and on. He has become head of Yale University’s Climate and
Energy Institute, which enjoys millions of dollars of US state and corporate
funding. He is on the climate change advisory board of Deutsche Bank. He is
Director of the Japanese Institute for Global Environmental Strategies and
was until recently an adviser to Toyota Motors. Recalling his origins as a
railway engineer, he is even a policy adviser to SNCF, France’s state-owned
railway company.

Meanwhile, back home in India, he serves on an array of influential
government bodies, including the Economic Advisory Committee to the prime
minister, holds various academic posts and has somehow found time in his
busy life to publish 22 books.

Dr Pachauri never shrinks from giving the world frank advice on all matters
relating to the menace of global warming. The latest edition of TERI News
quotes him as telling the US Environmental Protection Agency that it must go
ahead with regulating US carbon emissions without waiting for Congress to
pass its cap and trade bill.

It reports how, in the days before Copenhagen, he called on the developing
nations which had been historically responsible for the global warming
crisis to make ‘concrete commitments’ to aiding developing countries such as
India with funding and technology – while insisting that India could not
agree to binding emissions targets. India, he said, must bargain for
large-scale subsidies from the West for developing solar power, and Western
funds must be made available for geo-engineering projects to suck CO2 out of
the atmosphere.

As a vegetarian Hindu, Dr Pachauri repeated his call for the world to eat
less meat to cut down on methane emissions (as usual he made no mention of
what was to be done about India’s 400 million sacred cows). He further
called for a ban on serving ice in restaurants and for meters to be fitted
to all hotel rooms, so that guests could be charged a carbon tax on their
use of heating and air-conditioning.

One subject the talkative Dr Pachauri remains silent on, however, is how
much money he is paid for all these important posts, which must run into
millions of dollars. Not one of the bodies for which he works publishes his
salary or fees, and this notably includes the UN, which refuses to reveal
how much we all pay him as one of its most senior officials.

As for TERI itself, Dr Pachauri’s main job for nearly 30 years, it is so coy
about money that it does not even publish its accounts – the financial
statement amounts to two income and expenditure pie charts which contain no
detailed figures.

Dr Pachauri is equally coy about TERI’s links with Tata, the company which
set it up in the 1970s and whose name it continued to bear until 2002, when
it was changed to just The Energy Research Institute. A spokesman at the
time said ‘we have not severed our past relationship with the Tatas, the
change is only for convenience’.

But the real question mark over TERI’s director-general remains over the
relationship between his highly lucrative commercial jobs and his role as
chairman of the IPCC.

TERI have, for example, become a preferred bidder for Kuwaiti contracts to
clean up the mess left by Saddam Hussein in their oilfields in 1991. The $3
billion (£1.9 billion) cost of the contracts has been provided by the UN. If
successful, this would be tenth time TERI have benefited from a contract
financed by the UN.

Certainly no one values the services of TERI more than the EU, which has
included Dr Pachauri’s institute as a partner in no fewer than 12 projects
designed to assist in devising the EU’s policies on mitigating the effects
of the global warming predicted by the IPCC.

But whether those 1,700 Corus workers on Teesside will next month be so
happy to lose their jobs to India, thanks to the workings of that
international ‘carbon market’ about which Dr Pachauri is so enthusiastic, is
quite another matter.