China, India smile as West overpays for climate

China, India smile as West overpays for climate
Comment E-mail Print Share
First Published: Thu, Feb 22 2007. 12 29 AM IST
Updated: Thu, Feb 22 2007. 12 29 AM IST
Governments in rich nations are spending billions of dollars to buy a clearer conscience over climate change. Are they getting their money’s worth? Enlightened individuals, those who stay awake at nights wondering what they can do to prevent the polar caps from melting, at least have a growing menu of choices.
Sydney-based Easy Being Green says it will mitigate your cat’s flatulent contribution to global warming for A$8 ($6 or Rs264). The same company could also make your granny “carbon-neutral” at A$10 a year, according to a recent report in an Australian newspaper. Then Adelaide-based Carbon Planet Pty, another company it cited, guarantees to keep one tonne of carbon dioxide out of the air for 100 years if, say, on a short-haul flight between Sydney and Canberra you feel bad about the damage you are doing to the ecosystem and buy credits worth A$23. By comparison, governments that have undertaken to cut greenhouse emissions under the United Nations’ Kyoto Convention on Climate Change have chosen a tough, costly route to guilt reduction.
Michael Wara, formerly of Stanford University’s Program in Energy and Sustainable Development and now a lawyer at Holland & Knight LLP in San Francisco, made that point in a much-publicized article in the science journal, Nature, this month. Countries that must purchase emission credits to atone for their higher-than-mandated production of carbon dioxide are paying a tiny group of chemical manufacturers in China and India massive sums to reduce industrial gases and methane, which are rather inexpensive to capture and destroy, Wara says.
The improvement that can be obtained by spending just $31 million on incinerators could cost developed nations as much as $986 million through the elaborate trading mechanism of the Kyoto Protocol, and even then only two-thirds of the problem would go away, Wara estimates.
China and India are getting a prize for producing lots of hydrofluorocarbon-23, one of the six greenhouse gases under the Kyoto Protocol. One tonne of it is considered the equivalent of 11,700 tonnes of carbon dioxide. At present, barely eight chemical plants in China and India control about 44% of the existing annual supply of emission credits.
That’s a very high level of concentration, considering there are 506 projects in more than 40 nations that are currently registered under the Kyoto Protocol’s trading system, known as the Clean Development Mechanism.
A likely new accord after the Kyoto Protocol expires in 2012 will be good news if it leads to the planting of trees, commissioning of wind farms or other projects that directly make a difference to carbon-dioxide levels. That’s where the developed world’s money ought to go. So far, just one reforestation project—in China’s Pearl River basin—has come under the ambit of emissions trading. A hotel in Kolkata has sold to the UK government an even more humble 3,000 units of carbon dioxide savings from the replacement of electric heaters with solar-powered ones. We need thousands of such projects. Otherwise, emission trading will continue to represent a disproportionately high subsidy to the developing world to clean up industrial byproducts.
Gujarat Fluorochemicals Ltd, the first Indian company to join the Clean Development Mechanism, has reported that its revenue tripled in the quarter ended 31 December from a year earlier. Shareholders have earned 662% on the stock since March 2005, when Japan, the Netherlands, Italy and the UK agreed to pay it to destroy hydrofluorocarbon-23. Italy may pay €12.8 billion over the next four years to buy emission credits, Finanza & Mercati reported. That’s about the equivalent of the annual gross domestic product of Iceland. That kind of money may be a beginning, though it’s very doubtful that we will be breathing a lot easier because of it.
Comment E-mail Print Share
First Published: Thu, Feb 22 2007. 12 29 AM IST
More Topics: Money Matters | Commodities |