The UK’s new climate envoy, Rachel Kyte, imagines carbon as “the currency of the 21st century”

What a £4 million donation to the Labour Party from the Cayman Islands gets you.

The UK’s Labour Party has appointed Rachel Kyte as climate envoy. The position of Special Representative for Climate was scrapped 18 months ago by the UK’s Conservative Party under then-prime minister Rishi Sunak.

Kyte is Professor of Practice in Climate Policy at the Blavatnik School of Government, University of Oxford. She previously worked for the World Bank and the International Finance Corporation. She is co-chair of the Voluntary Carbon Markets Integrity Initiative.

In a statement, Kyte said,

“This provides an opportunity to use international action to help deliver on the UK’s energy mission. And it provides challenges, not least in mobilising the financing to protect people and drive greener growth.”

It goes without saying that Kyte is a proponent of carbon markets. No doubt carbon markets will play a key role in Kyte’s plans of “mobilising the financing”.

Following Kyte’s appointment, the chair of the Integrity Council for the Voluntary Carbon Market, Annette Nazareth, said,

“Rachel is a powerful thought leader on climate action with a deep understanding of what it will take to energise finance flows from the private sector into driving greater progress. We look forward to continued collaboration in our shared work to accelerate climate action through a high-integrity voluntary carbon market."

A “forthright climate expert”?

Fiona Harvey, environment editor at The Guardian welcomed Kyte’s appointment, describing her as a “forthright climate expert” who is “widely respected among developed and developing country governments”.

Harvey quotes several people’s reactions to the appointment all of which are positive. Nicholas Stern, economist and author of the 2006 Stern Review on the Economics of Climate Change, told The Guardian that,

“Rachel Kyte is one of the truly outstanding figures in public policy on climate and energy. As well as a very clear and creative analytical mind, she has had tremendous experience in senior positions in the World Bank, in the UN, in academic life and in international negotiations. This is excellent news for the UK and the world.”

Stern is also a carbon markets proponent. He was chief economist at the World Bank. The Stern Review was very influential. It promoted trading the carbon stored in forests.

However, Stern did not reply to REDD-Monitor’s questions in 2012 about whether he stood by the claim that he made in the Review, that reducing deforestation is a “highly-cost effective way of reducing greenhouse gas emissions” and could “offer significant reductions fairly quickly”.

Carbon as “the currency of the 21st century”?

Greenpeace UK’s Areeba Hamid welcomes Kyte’s appointment. “Rachel Kyte looks to be an excellent choice as climate envoy,” Hamid told The Guardian.

Hamid added that, “She will need true grit to keep driving for a phase-out of fossil fuels, while resisting the siren calls of petro-states, industry lobbyists and the ‘carbon offsets’ sector.”

Unfortunately, Kyte long ago fell for the carbon market’s siren call.

In 2013, Kyte was vice president for sustainable development at the World Bank. She took part in a Bank-organised presentation about “The Economic Case for Climate Action”.

She talked about working together with the International Monetary Fund “for those countries that are pursuing market based mechanisms, to show that you can imagine a future world where carbon is really the currency of the 21st century and that we can manage carbon as a currency and start thinking about carbon as a tradable asset”.

The Guardian makes no mention of Kyte’s fondness for carbon markets. Which is odd, given how many critical articles The Guardian has published about the problems with carbon credits in the past two years.

Quadrature Climate Foundation

The Canary points out that Kyte is co-chair of the advisory board of the Quadrature Climate Foundation.

The Foundation was set up by Quadrature Capital, which is a hedge fund registered in the tax haven of the Cayman Islands. Quadrature Capital was founded in 2010 by billionaires Greg Skinner and Suneil Setiya.

The Canary notes that The Guardian failed to mention Kyte’s link to Quadrature. “It instead dedicated hundreds of words to praising her.”

Which is odd, because in June 2023, The Guardian reported that Quadrature Capital had invested more than US$170 million in fossil fuel companies, including ConocoPhillips, Cheniere Energy, and Cenovus Energy.

On 28 May 2024, just after Rishi Sunak called a general election, Quadrature Capital gave Kier Starmer’s Labour Party a £4 million donation — the Party’s biggest ever donation. The Canary describes Kyte’s appointment as “the pay off”.

The Quadrature Climate Foundation is “fully funded by Quadrature Capital Group”. The Foundation recently announced that it has given away more than US$1 billion since it was established in 2019.

The money has gone to 182 organisations in 17 countries, including US$64.3 million to Climate Works, almost US$500,000 to Carbon Market Watch, about US$46 million to the European Climate Foundation, nearly US$2 million to Global Witness, US$50 million to the Grantham Foundation, US$2 million to Mighty Earth, US$17 million to Rockefeller Philanthropy Advisors, Inc., more than US$6 million to Sandbag Climate Campaign, US$25,5 million to the Sunrise Project, and US$37 million to the Windward Fund.

Several of these are philanthropic organisations, and some of the NGOs that accept money from Quadrature Climate Foundation do good work. But whether they should be accepting money from a Foundation that sources its money from a hedge fund in the Cayman Islands that invests in fossil fuel companies is another question entirely.

Carbon dioxide removal: “A dangerous distraction”

One of the focusses of the Quadrature Climate Foundation’s funding is carbon dioxide removal. This includes REDD, as well as machines that suck CO₂ out of the atmosphere.

Quadrature Climate Foundation states that its carbon dioxide removal programme focusses on “advancing CDR technologies, improving verification methods, and advocating for regulations that ensure real benefits for both local communities and the global climate”.

Since 2020, the UK government has made £25.26 billion available for carbon capture and storage and hydrogen projects. The new Labour government has promised to invest £1 billion in carbon capture, usage and storage to produce blue hydrogen and to capture CO₂ from new gas-fired power stations.

Climate scientists and activists recently wrote to Ed Miliband, the Secretary of State for Energy Security and Net Zero, calling on the Labour government to pause the plans for CCUS and blue hydrogen, “until all the relevant evidence concerning the whole-life emissions and safety of these technologies has been properly evaluated”.

In September 2024, Oil Change International (which has received US$400,000 from the Quadrature Climate Foundation) put out a report looking at the cost of carbon capture in the UK. Since the 1990s US$83 billion has been invested globally in carbon capture. “It hasn’t made a dent in carbon emissions,” Oil Change International writes.

And carbon capture is yet another false solution that allows business as usual for the fossil fuel industry to continue. Oil Change International states that,

Carbon capture is a dangerous distraction promoted by fossil fuel companies and supportive policymakers to prolong the use of fossil fuels. It is only a solution for the fossil fuel industry, not for people and the planet.

The Canary concludes that Rachel Kyte is “a perfect fit to push Quadrature’s agendas via the Labour government”.

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