To Nick Smith from David D

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.

The Telegraph, UK
Sunday, December 20, 2009
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) 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 (UKP 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 (UKP 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 UKP 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 (UKP 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 UKP 4 billion. He became
chairman of the Indochina Sustainable Infrastructure Fund, whose CEO
was confident it could soon raise UKP 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 (UKP 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.