Tuesday, April 1, 2008

Paying for the Perverse: China, Kyoto and the Eurochumps

Two stories about human nature.

From The Star (Malaysia):

Perverted incentive
THE harshest criticism against Clean Development Mechanism (CDM) has to be the perverted incentive towards the removal of large volume of hydrofluorocarbons (HFC), a byproduct of hydrochlorofluorcarbons (HCFC) that until recently is regarded as a safe replacement for the ozone-depleting chlorofluorocarbons (CFC)....

...“But in the meantime,” writes Michael Wara of Stanford University in the journal Nature, “there is evidence that factories are ramping up production of HCFC in order to boost emissions of HFC, so that they can make windfall profits from cutting back on HFC later and selling the emission-reduction credits. They can hope to earn twice as much from selling their credits as they can from selling their refrigerants.”

Investors are prepared to pay up to $15 (RM71) for every HFC-derived carbon credit in China and India, the two biggest manufacturer of the refrigerant – that’s still cheaper than reducing emissions in Europe or the US.

Wara estimates that the sale of HFC credits will fetch $4.7bil (RM22.3bil) by 2012, though the cost of capturing the gas is only $100mil (RM475mil). So some $4.6bil (RM21.8bil) was generated in profit for the owners of the plants and the project brokers....

China, the carbon traders and the U.N.'s CDM overseers are playing the European ratepayers for chumps.

From Bloomberg:

U.S. Rejects China's Call for Climate Change Funding
The U.S. rejected a Chinese proposal that developed countries should contribute a percentage of their gross domestic product to mitigate the effects of climate change.

China, the world's second-biggest emitter of carbon dioxide, called for developed nations to provide financial support of 0.5 percent of their GDP a year to help it and other developing nations fight global warming.

Asked whether China's proposal is reasonable, Harlan Watson, the U.S. climate-change negotiator, said: ``No.''
In an interview in Bangkok, Watson described the proposal as an ``interesting suggestion. I am sure we will have a discussion on that.''...

Only the foolish learn from experience -

the wise learn from the experience of others.

-Romanian proverb

Source: Asia Cleantech-Carbon Trading - the Chinese Report Card

The Chinese have already scammed $6 Billion
From New Scientist Environment:Kyoto Protocol 'loophole' has cost $6 billion

From the New York Times:
Outsize Profits, and Questions, in Effort to Cut Warming Gases