Monday, May 26, 2008

Carbon Trading a Scam? Who Could've Known?

Big polluters in the West have really taken to carbon offset programmes. It's nothing more than paying some government or corporation in the Third World to implement some form of GHG reduction programme to "offset" the excessive emissions of its Western patron. It's what George Monbiot has described as moving food around on a plate.

What's wrong with carbon trading? Nothing, in theory. In practise, however, there's plenty wrong with it

A key problem is that it relies on the industrial polluter to fund a project that will actually result in a reduction of GHG emissions and that wasn't already in the works anyway. It's sort of like letting the banditos guard the stagecoach. From The Guardian:

"Leading academics and watchdog groups allege that the UN's main offset fund is being routinely abused by chemical, wind, gas and hydro companies who are claiming emission reduction credits for projects that should not qualify. The result is that no genuine pollution cuts are being made, undermining assurances by the UK government and others that carbon markets are dramatically reducing greenhouse gases, the researchers say.

The criticism centres on the UN's clean development mechanism (CDM), an international system established by the Kyoto process that allows rich countries to meet emissions targets by funding clean energy projects in developing nations.

A working paper from two senior Stanford University academics examined more than 3,000 projects applying for or already granted up to $10bn of credits from the UN's CDM funds over the next four years, and concluded that the majority should not be considered for assistance. "They would be built anyway," says David Victor, law professor at the Californian university. "It looks like between one and two thirds of all the total CDM offsets do not represent actual emission cuts."

Governments consider that CDM is vital to reducing global emissions under the terms of the Kyoto treaty. To earn credits under the mechanism, emission reductions must be in addition to those that would have taken place without the project. But critics argue this "additionality" is impossible to prove and open to abuse. The Stanford paper, by Victor and his colleague Michael Wara, found that nearly every new hydro, wind and natural gas-fired plant expected to be built in China in the next four years is applying for CDM credits, even though it is Chinese policy to encourage these industries."

It may just be that there are not nearly enough legitimate CDM projects to meet the demands of Western emitters but, if that's the case, there's nothing to be gained from letting them manipulate the process. The UN needs to reform the process, perhaps by eliminating the brokers and taking in-house the job of identifying qualifying CDM investments.

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