A UN board could rein in $2.7 billion carbon market to prevent the double dipping of CFC manufacturing incentives and carbon credit sales, as discovered to be happening in China.
Guest post by Ric Werme
Excerpts from: http://news.yahoo.com/s/ap/20100821/ap_on_bi_ge/un_un_carbon_cutting_scheme# reports
UNITED NATIONS – An obscure U.N. board that oversees a $2.7 billion market intended to cut heat-trapping gases has agreed to take steps that could lead to it eventually reining in what European and U.S. environmentalists are calling a huge scam.
At a meeting this week that ended Friday, the executive board of the U.N.’s Clean Development Mechanism said that five chemical plants in China would no longer qualify for funding as so-called carbon offset credits until the environmentalists’ claims can be further investigated.
This is coupled with the production of the “ozone friendly” refrigerant HCFC-22 (chlorodifluoromethane). A byproduct of production is another gas, HFC-23 (trifluoromethane) which has been determined to be 11,700 times more powerful than CO2 as a greenhouse gas.
Not only are the manufacturers able to sell carbon credits for producing HCFC-22, they can also sell “certified emission reductions” (CERs) for destroying HFC-23, to the tune of about $100,000 per ton!
Not surprisingly:
“The evidence is overwhelming that manufacturers are creating excess HFC-23 simply to destroy it and earn carbon credits,” said Mark Roberts of the Environmental Investigation Agency, a research and advocacy group. “This is the biggest environmental scandal in history and makes an absolute mockery of international efforts to combat climate change.
This is not a new problem. While looking for a decent image, I came across the 2007 article http://www.carbon-financeonline.com/index.cfm?section=features&action=view&id=10420 which notes:
The creation of carbon credits from the destruction of the potent greenhouse gas (GHG) trifluoromethane (HFC23) has been one of the most controversial issues during the early life of the Kyoto Protocol’s Clean Development Mechanism (CDM).
A by-product of the manufacture of the refrigerant HCFC22, many viewed HFC23 destruction projects as a cheap money-maker for a small number of industrial sites in a handful of developing countries that provided little discernible sustainable development benefit to those countries.
With CERs currently selling for €11 ($14)/t, the profit margins from HFC23 destruction projects are obvious. For example, Indian chemicals firm SRF, which operates one of the 10 registered HFC23 destruction projects, said in a recently released earnings report that it has, so far, sold 3.65 million CERs in the 2006-07 financial year for Rs4,050 million ($96 million). The sale of CERs has become a significant revenue stream for the company, second only to its technical textiles business and ahead of its chemicals and packaging units.
Current state-of-the-art production facilities, such as DuPont’s Louisville Works in the US, have HFC23 generation rates as low as 1.37%, so there may be some scope for the volume of CERs from new production, if allowed, to be considerably less than from existing plants.
DuPont is not involved in HFC23 destruction in the CDM market. But it has destroyed HFC23 as part of a set of 1991 internal goals to reduce GHG emissions. “We were doing this way before the carbon market,” says Mack McFarland, an environmental fellow with DuPont Fluoroproducts in Wilmington, Delaware.
That article has a graphic…
…that shows HFCs as half the CDM market in the first 3 quarters of 2006.
In 2008, http://blueskieschina.com/mambo/content/view/257/90/ noted
While China has long been ahead of India in terms of potential carbon credits generated by registered projects, India has dominated actual CER issue since January 2006.
But a bumper start to 2008 for China saw over 10 million CERs issued in January, accounting for over 90% of all CERs issued that month (chart 2). These credits, stemming from just four chemical plant HFC23 destruction projects, pushed China into first place in the issued carbon credit leaderboard for the first time since the CDM programme began.
There’s a lot more background at http://www.sourcewatch.org/index.php?title=Clean_Development_Mechanism_and_HFC-23_destruction
I guess it’s too late to invest in new HCFC-22 chemical plants.
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Christopher Booker in the Sunday Telegraph has covered this and similar stories. Like the previous UK gov getting “carbon credits” for letting a steelworks shut (don’t worry about the workers), the Indian gov gets “carbon credits” for rebuilding it in India.
Is it just paranoid, ol’ me, or does anyone else think this would have remained buried if China hadn’t flipped them off at Copenhagen?
As mentioned earlier in the comments, Richard North discussed this scam in December 2009 and last June. What is more worrying is the replacing of this scam for another.
REDD.
Read the article and grieve.
http://eureferendum.blogspot.com/2010/08/scam-on-hold-and-another-one-behind.html
Well, at least the Chinese are loaning us the dollars we are sending them for their scam, then when they want to collect on the debt we can pay them back with money we print.
When did the world turn into an unmitigated farce?
Another classic example of:
THE LAW OF UNINTENDED CIRCUMSTANCES
Put another way, liberals/socialists/AGW fanatics love to trumpet their green credentials by proposing Action A to solve Problem B, thereby creating Solution C, but never having the sense to realise that Action A inevitably results in by-products D,E,F, etc., which either negate Action A or make things worse than before.
In this case, once again demonstrating that entrepreneurs and criminals are much smarter than woolly minded environmentalists and environmentalists.
Anyhow, no chance of this being reported on Real Climate.
Oops
politicians and environmentalists.
ON HOLD FOR EMAIL CHECK
E.M.Smith says:
August 25, 2010 at 1:19 am
…..When did the world turn into an unmitigated farce?
I read a good line yesterday “..back when the World was run by adults” now it seems to be rather stupid 15 year olds.
The UN must be defunded. It is beyond saving.
Larry Fields says:
August 24, 2010 at 11:31 pm
“But I don’t know what the “t” in $14/t means. If it’s tons, then how is it that $100 thousand/ton is the same as $14/ton?”
I think what’s meant is this: $14/t is $14/tonneCO2; 1 tonne of HFC-23 is considered equivalent to 11,700 tonnes of CO2; so 1 tonne of HFC-23 pays $14×11,700=$163,800 which is “to the tune of about $100,000 per ton”.
… could lead to it eventually reining in what European and U.S. environmentalists are calling a huge scam…
Wait until the carbon scam proper is in full swing. Trillions of dollars of OPM disapearing into the shell game and no discernable change in CO2 rate of increase. I suspect even the most rabid green will see the light at some point soon.
Has anyone compiled a list of such scams? I only remember the treadle pump scam off the top of my head. — John M Reynolds
As a person closely related to this industry, we’ve been fighting this for a long while. Couple this with crazy refrigerant phase-out policies going on in Europe, and China is set to take over most of this market.
From Financial Time Dec. 2009 “UN halts funds to China wind farms”:
See http://www.ft.com/cms/s/128a52de-deaf-11de-adff-00144feab49a,dwp_uuid=abb716b0-2f7a-11da-8b51-00000e2511c8,print=yes.html
Free registration required.
This saying is never truer than in this day and age, and particularly applicable to the farce which is the Kyoto requirement to reduce carbon dioxide EQUIVALENT…
‘Politics is the art of looking for trouble, finding it everywhere, identifying it wrongly and applying unsuitable remedies..’
I originally started my skepticism with the ozone issue. As a mechanical engineer working with HVAC systems, we spent years replacing effective CFC refrigerants due to their ozone depleting characteristics. we have now begun to elimnate the HCFC’s due to the global warming potential.
Since then, I found that the reactions indicating the CFC’s as ozone depleting substances aren’t necessarily on solid ground, that no one knows how big the ozone hole was before 1970, and that the hole has been essentially stable for 20 years.
All this issue has done is add significant cost to developed countries infrastructure while adding ineffiency to refrigeration and air conditioning systems.
Compared to AGW, the ozone issue should have been easy; it just seems the same group that benefited from the refrigerant replacement has focused on CO2 as their new silver bullet without fully investigating the multitude of factors included in climate change.
When communists beat capitalists at bilking taxpayers out of their hard earned money there’s something rotten in Denmark.
Larry Fields says:
August 24, 2010 at 11:31 pm
Multiply $14 by 11,700 and round to the nearest 100,000. 1 CER is good for offseting the equivalent of 1 tonne of CO2 equivalent. That HFC-23 is worth its weight in gold. 🙂
And the best refrigerant to replace R22 is R290. R290 is pure Propane.
The big disadvantage is that is to inexpensive for the producer of refrigerants to sell.
No margins to live well on.
That is one reason why it it is not used more or promoted by the refrigerant industry.
Now I understand that it is another reason as well. Carbon credit cash.
Ken B. R134-A is used primarily in cars as the refrigerant and it’s been that way for a while. R-22 is what’s used in your building units. And as mentioned above it’s no longer allowed to be put into new units. Most companies are switching to either 410-A, 407-C, or some other variation of those. The ironic thing is that Europe has recently started to push CO2 as a refrigerant!
“3×2 says:
August 25, 2010 at 3:42 am
… could lead to it eventually reining in what European and U.S. environmentalists are calling a huge scam…
Wait until the carbon scam proper is in full swing. Trillions of dollars of OPM disapearing into the shell game and no discernable change in CO2 rate of increase. I suspect even the most rabid green will see the light at some point soon.”
____________________
This is exactly the “light” that, ‘even the most rabid green’ have turned on! For them this is the “light” at the end of the tunnel, the MONEY LIGHT. Why it started, why it perpetuates and why it has been so hard to stop.
People making money out of “thin-air” at the expense of those with little, “redistributing” the wealth to those with much. A ‘win’ for business and a
‘win’ for the rich: win-win.
…..When did the world turn into an unmitigated farce?
Agreed
The IQ of a Nation is variable and can only be measured at the Ballot Box.
Correct me if I am wrong , are the Chinese the big racketeers here ? What are they doing with all these billions of dollars ? Their main way of spending has been the purchase of US government bonds in order to keep the scheme going on . So in fact the US government is the big profiteer here , bacause once the chinese step out of their support of the us dollar , the greenback aint worth shit in a very short while .
No wonder Obama wishes to install cap and trade using all the tricks of the politics books . He is damned certain that the Chinese will cash the bulk of the billions although they will continue polluting their whole country , but never mind all the cash will be coming back to us and we shall pay those hard workers with more and more government paper . And when this super Ponzi scheme collapses who will be the loser ? Who is the slave of whom here ?
I love ponzi schemes because they give me so much unfolding drama of sane people going completely mental when they finally understand they’ve been massively screwed by an evil simpleton.
While you may be right concerning the parasites and thieves at the top of the “environmental” food chain. I was referring to “grass roots” environmentalists. I can’t honestly say that these “foot soldiers” are in it for the money. IMHO they genuinely believe that they are involved in “saving the Planet”. I just think that these are the people that will be the hardest hit once the dry ice sublimates. Some more than others.
The ones I am familiar with seem to think that they are finally getting to poke “capitalism” (consumerism and all kinds of other ‘isms) in the eye using “climate science”. Me, I believe that they will eventually see that the corporations they hate so much are the only beneficiaries here. CO2 will continue to rise unabated but they will have to join us sceptics in working a day a week for Goldman Sachs et al paying off our collective “Trillions ‘o’ dollars” “carbon tithe”.
Perhaps we can all [sceptics and warmers alike] meet in the middle, join hands somewhere in a few years time. Front of the Banqueting House in London would be my favoured venue. We can roast Pandas ‘n’ Polars over beds of finest Amazon WWF hardwood while introducing lines of shivering, double shirted carbon scammers to the finest Indian carbon steel and French engineering. ….. sorry, nodding off while typing there …
George E. Smith says:
August 24, 2010 at 4:03 pm
Can somebody please explain what it means to be 11,700 times as powerful a greenhouse gas as CO2.
Does that mean that CF-23 at 33 parts per billion of the atmosphere does as much warming as CO2 does at 390 ppm ?
And what is the LWIR absorption spectrum of CF-23 at least in the range of 5 microns to 80 microns wavelength which is about where 98% of the surface emitted LWIR is to be found ?
It is my understanding that the “power” of a greenhouse gas is its spectral properties in the relevent area of Infra Red (as compared to CO2) multiplied by its dwell time in the environment (compared to CO2). So for example, if a molecule has identical properties to CO2, but lasts in the atmosphere 500 times longer, then it is 500 times more powerful than CO2.
Given that most of these refrigerants are insoluble, then thousands of times “more powerful” is almost a given.
If you were expecting a vial of this gas to raise in temperature 11,700 times the increase of a vial of CO2, or to block 11,700 as much IR, then you’d be absolutely wrong.
Yes, it is just another con with numbers.
This was an well written fascinating story of a singular scientist and his quest to bring unknown aspects of China and Its’ contributions to the world into popular knowledge.