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U.N.-Managed Carbon Offsets Called "Global Shell Game"

As part of the Kyoto protocol, Clean Development Mechanisms (CDMs) were created to help developing countries lower carbon emissions while continuing development. The program is administered by the United Nations and is supposed to work like this:

Company A must meet targets requiring lower carbon emissions, but it is expensive to do so in its own country, so it invests in Company B in, let’s say, China. Company B is supposed to use these investments (CDMs) to develop energy sources with lower carbon emissions, such as solar, wind, etc. The world wins when this mechanism creates fewer worldwide carbon emissions. Patrick McCully, Executive Director of International Rivers, is sharply criticizing this program because he has found evidence of polluters gaming the system. His article in Renewable Energy World is long and informative, but I’ll summarize here:

  • Coal and oil companies and destructive dam builders, and even some wind and solar companies, are using the CDMs as an income generator for projects that they would have built anyway, even without the CDMs. (Only projects that would have NOT been built without the CDMs are considered eligible. This “additionality” has been impossible to monitor.)
  • But it gets worse. (Now stay with me as I introduce another acronym.) CDMs qualify as CERs, or “Certified Emission Reduction” credits, and companies who pollute can use them to achieve their carbon emission reduction targets. McCully’s point is that CDMs + CERs = carbon disaster, because some companies may make more money creating pollution and then taking CERs to mitigate it than by simply not polluting. He uses an extreme example to illustrate:

Image credit: Atmospheric CO2 concentrations measured at Mauna Loa Observatory.

“The single project type slated to generate the most CERs is the destruction of a gas called trifluoromethane, or HFC-23, one of the most potent of all greenhouse gases. HFC-23 is a waste product from the manufacture of a refrigerant gas.

Every molecule of HFC-23 causes 11,700 times more global warming than a molecule of CO2. Because of this massive ‘global warming potential,’ chemical companies can earn almost twice as much from selling CERs as from selling refrigerant gases. This has spurred concern that refrigerant producers may be increasing their output solely so that they can produce, and then destroy, more waste gases. It is even feared that new refrigerant factories could be built only to destroy HFC-23.”

Supporters of carbon cap-and-trade legislation (and I am one of them) must be alert to the need for figuring out how to correct this flaw in the system. As the United States enters the carbon management economy (which everyone expects to happen with the next administration), let’s hope that improvements will result. (Note to readers: I edited this last sentence in response to an article on U.N. Dispatch, a blog covering the UN.)

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Written By

Carol Gulyas is a leader in the renewable energy community in Illinois, where she serves as VP of the Board of the Illinois Solar Energy Association. Recently she co-founded EcoAchievers -- a provider of online education for the renewable energy and sustainable living community. She spent 18 years in the direct marketing industry in New York and Chicago, and is currently a teaching librarian at Columbia College Chicago. Carol grew up in a small town in central Indiana, then lived in the Pacific Northwest, Lima, Peru, and New York City. She is inspired by reducing energy consumption through the use of renewable energy, energy efficiency, and green building technology.


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