Dodgy dealings

We founded Carbon Retirement because we figured there was a better way to do offsetting than the standard project-based approach, but even we didn't realise back then quite how flawed the project system was.  Since then, we've found people selling condom-based offsets, come across governments reusing credits and discovered huge inefficiencies.  We've started to think these stories might sustain a monthly feature... so here goes!

This month's Dodgy Dealing relates to what Paul Collier, in his new book The Plundered Planet, describes as a fundamental flaw of the design of the CDM:
“The sale of indulgences through the CDM creates incentives not to reduce carbon emissions but to threaten to increase them by as much as possible.”

In other words, the CDM by its very nature gives people an incentive to overstate how much CO2 they're going to produce, then 'save' it and pocket the cash.  Unsurprisingly, someone in the world of finance spotted the opportunity, and in the last month we've seen the first big case exposed. 

On 12th June, a coalition of NGOs called CDM Watch published evidence that HFC-23 projects, which eliminate emissions of a particularly noxious gas and account for over half of all Certified Emissions Reductions (CERs), are systematically exploiting the CDM in this way, deliberately over-estimating output in order to over-claim CER allocation when they subsequently 'save' it. 

Outraged? Well, that's not all. Next chuck in the fact that, as we said back in May, this gas shouldn't be being emitted anyway. 

And finally, just to top it off, CDM Watch even found evidence that some plants were generating more HFC-23 than they would be without the CDM, citing three plants which actually cut emissions when they were not eligible for credits, and increased production when they became eligible. One of these had actually eliminated HFC-23 - and then started producing it again!