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Chinese Spring 'Climate Bomb' on Greens


Talk about perverse incentives! It appears that Chinese coolant manufacturers have been producing an excess of a harmful greenhouse chemical in order to dispose of it responsibly under the UN’s Clean Development Mechanism (CDM). By using incinerators to cleanly burn off the chemical, HFC-23, these manufacturers were earning emission credits that they would in turn sell to developed world companies in order to help them hit their targets under the Kyoto protocol.

This chicanery didn’t go unnoticed, however: the European Emissions Trading Scheme banned trade in those credits in May, and other working climate exchanges have said they’re going to follow suit. A very lucrative business for Chinese manufacturers is drying up very quickly, and they’re not taking it sitting down. As the FT reports, this has set up a stand-off that would be delicious to behold if the stakes were not quite so high:

The EIA said an undercover investigation had shown that most of China’s non-CDM facilities were emitting HFC-23 already. “If all of these facilities [under the CDM] join China’s non-CDM and vent their HFC-23, they will set off a climate bomb emitting more than 2bn tonnes of CO2 equivalent emissions by 2020,” it said. […]

An executive at China Fluoro Technology, one of the largest Chinese CDM plants, told the Financial Times: “Our company is still incinerating the HFC-23 now. If the money is used up, we can stop incineration. We can’t go on doing this, we can’t afford it and we have no duty to do it.”

The language used by the Chinese manufacturers is classic gangster talk—pure extortion. But the ultimate responsibility for this scandal lies with the doe-eyed greens who came up with the utopian global carbon trading system in the first place. Emissions trading was supposed to harness the profit motive and the efficiencies of markets to get greenhouse gas reduction to work on a global scale. But the scheme also assumed an effective global enforcement mechanism and a level of public-spiritedness among everyone involved that obviously never was there.

This will be one stand-off to watch closely. Some kind of pay-off is likely, as the Chinese manufacturers don’t appear to be bluffing. Will the ransom come from Beijing, with President Xi making good on the pledge he made to President Obama to phase out HFC’s at their recent “shirtsleeves summit”? Or will this end up being another lever for getting further concessions out of the West on any number of other issues?

And finally, keep this mess in the back of your mind as you watch President Obama announce a number of ‘bold’ new green initiatives early next week. The intellectual and policy foundations of the green worldview are buckling just as the President is about to set America down that very path.

[‘Green bomb’ photo courtesy Shutterstock.]

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  • Carbonicus

    Eco-socialism. Period.

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