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Israel’s bombardment of Gaza in response to Hamas’ October assault on Jewish civilians is prompting much soul-searching. One reappraisal that caught my eye was Who’s a ‘Colonizer’? How an Old Word Became a New Weapon, which ran earlier this month in The New York Times.

The piece, by veteran NY Times correspondent Roger Cohen, centers on two opposing ideas — clashes, if you will. One, particular to the current war, concerns the charge that Israel is an outpost of “settler colonialism” and the counterclaim that the Jewish state, “far from being colonialist,” in Cohen’s words, “is a diverse nation largely formed by a gathering-in of the persecuted.” The other is what Cohen calls “a fundamental reframing” of history away from an East-West conflict canonized in the American and French revolutions, toward a North-South struggle “focused on the millions of lives lost to the slave trade and the genocide of the native American peoples.”

The scene in San Francisco on Sept 10, 2018 as activists with the Climate Justice Alliance demonstrated outside California Gov. Jerry Brown’s Climate Action Summit.

Cohen’s grappling with colonialism and colonization took me back to 2018 and the image shown at left. Outside a “Climate Action Summit” convened in San Francisco by Jerry Brown toward the end of his fourth and final term as governor of California, activists from the Climate Justice Alliance hoisted a banner proclaiming “Carbon Pricing Is Colonialism.”

To me, the message was shocking but not surprising.

Shocking, in equating carbon pricing — an admittedly technocratic but singularly powerful policy tool for cutting carbon emissions and, thus, aiding vulnerable nations and communities considered most gravely threatened by climate chaos — with the centuries-long colonial project that subjugated and plundered the Global South to benefit the colonizing North, and whose psychological and financial toll endures.

Unsurprising, in light of the climate-justice movement’s embrace of intersectionality, and with it, conflation of carbon pricing with predatory capitalism that, over centuries, bestowed riches on Europeans and North Americans by stealing the lands of Indigenous people, the labor of people of African descent, and the mineral resources of the entire Global South.

What Is Colonialism?

Wikipedia usefully defines colonialism as “a practice by which one group of people, social construct, or nation state controls, directs, or imposes taxes or tribute on other people or areas, often by establishing colonies, generally for strategic and economic advancement of the colonizing group or construct.”

Notwithstanding Wiki’s disclaimer in the same paragraph that there’s “no clear definition” of colonialism, this one is distinct and, with its reference to taxes, pertinent.

How Carbon Taxing Actually Works

Suppose carbon emissions were taxed in every country. Would that entail colonizing of poor nations by the rich? It could, but only if the carbon-tax wealth — the revenue generated by the tax on carbon emissions — was siphoned off by the rich countries.

There is no carbon-taxing or pricing system under which that would take place.

Keep in mind that carbon taxing is a charge on carbon emissions. If Country A exports fossil fuels to Country B, the carbon tax arises when the fuels are burned, which takes place in Country B. The tax is imposed in and collected by Country B, and the revenues adhere to Country B.

What about Country A? Its carbon tax applies to fuels burned there — to power vehicles, to generate electricity, to run factories, to heat buildings, and, yes, to operate the machinery that extracts the fossil fuels from the ground and brings them to docks for export. Each of those combustion processes generates carbon emissions in Country A which will be taxed by Country A and whose revenues will stay in Country A.

There are genuine debates to be had as to how Country A, the exporter, will spend its revenues, just as there are or should be debates in Country B concerning disposition of its carbon revenues. Nevertheless, under no conceivable carbon-pricing regime will revenues from Country A’s carbon tax flow to Country B.

Where in this picture is colonialism?

Is it in the prospect that taxes on carbon emissions in Country B and other importing countries will cut demand for Country A’s fuel exports . . . which will lower demand for Country A’s fuels and depress its commerce in extracting and exporting fossil fuels? No. This lowering of demand is part of the intent of taxing carbon — “a feature, not a bug,” per the expression.

Shrinking global demand for carbon fuels and thereby reducing Country A’s carbon commerce isn’t colonialism. It’s not a coercive transfer of wealth or imposition of tribute. Rather, it’s part of how the world cuts emissions and protects the climate, accomplished entirely by and under the control of Country A.

The Colonial Adjacency of Carbon Offsets

Carbon offsets are accounting devices to enable “polluters,” who may be countries, companies or individuals such as air travelers, to avoid having to reduce their own emissions, by purchasing offsets or “carbon credits” that ostensibly cut emissions elsewhere, e.g., by planting trees or destroying greenhouse chemicals like Freon. Plagued from the start by the rap that they are little more than get-out-of-jail-free cards for the Global North, and further undercut by repeated evidence of fraud, carbon offsets have not only hindered effective climate action but have also ended up sullying the cause of carbon pricing.

We tweeted this after seeing the activists tweet their banner on Sept 10, 2018.

The Carbon Tax Center’s website section on carbon offsets recounts their history and controversy. Suffice it to say that offsets’ ties to various carbon cap-and-trade programs such as the European Union’s Emissions Trading System and California’s AB-32 carbon cap-and-trade program have led climate-justice campaigners to condemn not just offsets or carbon cap-and-trade but any proposed or actual form of carbon pricing — even straight-up carbon taxing with no offsets whatsoever.

What the Colonial Powers Owe Their Former Colonies

Let’s be clear that the developed countries owe an immense debt to the Global South for exhausting most of our planet’s carbon budget: trillions for climate adaptation; massive financing for clean-energy infrastructure; and large-scale technology transfer. Sweeping debt forgiveness would help as well. These obligations are, or should be, compulsory. But they have nothing to do with carbon pricing. They certainly won’t be exacerbated by taxing carbon emissions whether in the Global South or North. Rather, the emission reductions that carbon pricing will spark will buy time for former colonies to manage, adjust and thrive as the payments, financing  and technology ramp up.

Carbon Pricing is Anti-Colonial

We conclude this with its headline. Carbon pricing is utterly and intrinsically anti-colonial. Nations levy their own carbon price and collect the revenues, which they allocate or invest as they see fit.

It’s not perfect. No policy is. And it’s not a silver bullet. When it comes to protecting and restoring climate, there’s no such thing.

But carbon taxing promises huge reductions in carbon emissions — 30 percent or better within ten years if ramped up steadily, in the case of the United States. And it’s complementary with virtually every other carbon-cutting action, be it regulatory, investment, or even clean-energy subsidization, to go far beyond that 30 percent mark. Moreover, pathways abound for allocating, or, our favorite approach, dividending the revenues to keep whole the vast majority of the most-vulnerable households

Carbon pricing is a policy path any nation can undertake on its own and manage as it chooses. If that’s not the essence of political autonomy, what is?

Environmental justice misgivings about carbon pricing, and antidotes to same, are discussed at length on our Carbon Pricing and Environmental Justice page.

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Want a simpler way to buy carbon credits? Discover our carbon marketplace

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Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.

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Climate-Linked Supply Chain Risk Is Already in Your P&L

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The earnings calls that quietly reframed climate from sustainability question to operating risk.

Three earnings calls in the last 18 months tell the story without any help from a press release.

Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.

You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.

Where climate risk has already appeared in earnings

The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.

Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.

Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.

What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.

The three commodity exposures that hit margin first

For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.

  • Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
  • Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
  • Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.

TCFD and ISSB disclosure changes

The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.

For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.

The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.

What procurement and finance can do now

Three actions matter near-term.

Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.

Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.

Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.

Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.

If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.

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Where should an SME start with a carbon action plan?

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More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.

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