No, not a nuclear meltdown but a different form of nuclear option.
For many, one of the painful elements of European cap and trade along with other arenas enabling and funding carbon offsets is how it creates opportunity for gamemanship that exaggerate positive impacts and wastes resources.
One arena where this has seemed to be the case is with much of the money going into China to reduce emissions there. Put aside the simple fact that the Chinese economy is, essentially, the most cash-rich economy in the world and the society is about the most over-polluted, suggesting that there are the resources and the domestic drivers that should enable self-funding of pursuing cleaner energy agendas (which is what we are seeing with the massive subsidies into the solar market), there have too many cases and far too many rumors of situations where Chinese firms have created a factory at lower efficiency and higher polluting that they would have otherwise to then get carbon offset funding to profitably go in and do those efficiency and pollution control investments.
The vast amounts paid for HFC-23 offsets have led factories in China and elsewhere to manufacture far more HCFC-22 and its HFC-23 by-product than necessary, just to maximize the amounts paid to destroy HFC-23 through the UN-backed carbon trading scheme.
In part because of this fraud and the huge profit margins associated with many of these clean-up activities, and complaints about subsidizing Chinese industry to compete with home industries, and … Europe has been considering changing the structure of carbon credit funding.
In response, we’re seeing the potential for a China Syndrome nuclear-option reaction — if you’re not going to give us the carbon credit cash, we’re going to go ahead and do serious damage to the atmosphere.
As reported in the Guardian,
“An environmental group [Environmental Investigation Agency] has accused China of climate blackmail after threats to vent powerful greenhouse gases if Europe cuts off carbon credits next year. The row over hydrofluorocarbon-23 offsets – which have a much greater warming effect than carbon dioxide and linger in the atmosphere for 200 years – has intensified before international climate negotiations in Durban this month. Since 2005, Chinese firms have received the bulk of the $6bn in carbon credits for the reduction of these gases, which are produced in the manufacturing of refrigerant chemicals. The money has mostly come from European firms that have bought the offsets under the clean development mechanism, but this source of funding will come to an end next year. The EU has banned HFC-23 offsets because they are inefficient: the value of credits is 70 times the cost of destroying HFC-23 gases.There are also widespread suspicions that Chinese and Korean firms have cynically created hydrofluorocarbon facilities in order to qualify for credits, which can generate twice as much income as selling the refrigerant. But Europe’s decision has angered Chinese officials responsible for administering the system, which has generated $1.3bn in tax revenues for the state.”
More from EIA directly,
In a shocking attempt to blackmail the international community, Xie Fei, revenue management director at the China Clean Development Mechanism Fund, threatened: “If there’s no trading of [HFC-23] credits, they’ll stop incinerating the gases” and vent them directly into the atmosphere. In an interview with Bloomberg News, given at the Carbon Forum Asia in Singapore last week, Xei Fei claimed he spoke for “almost all the big Chinese producers of HFCs” who “can’t bear the cost” and maintain that “they’ll lose competitiveness”.
China’s claim belies the fact that HFC-23 can be destroyed for just €0.17 per CO2e tonne. The destruction of one CO2e tonne generates one Certified Emission Reduction (CER) under the CDM, which historically has been sold on carbon markets at an average price of €12 — 70 times the actual cost of destroying HFC-23.
Getting rid of HFC-23 and other super-GHG chemicals is one path to quickly have a meaning impact on climate risks — in no small part due to the reality that they are projected to increase massively over the coming years. However, due to these 70-1 profits on cost vs CDM payments, the Chinese have been roadblocking international efforts to reduce super GHGs as was done with CFCs in response to the global ozone problem.
Because of these vast profits, China has repeatedly rejected attempts to destroy HFC-23 emissions through the Montreal Protocol. At the 2009 and 2010 Meetings of the Parties to the Montreal Protocol, China blocked progress of a North American proposal to pay the actual costs of destroying HFC-23 emissions at plants not currently covered by the CDM, which account for over half of developing country HFC-23 production. HFC-23 is produced as an unintentional by-product of the refrigerant HCFC-22, itself a powerful greenhouse gas and ozone depleting substance. This means that the quantity of HFC-23 produced is directly related to the production of HCFC-22. HFC-23 is an important contributor to climate change because of its incredibly high 100-year global warming potential (GWP) of 14,800.
As with the “blackmail” comment, EIA isn’t mincing words about the Chinese comments re CDM payments and HFC-23.
“Attempting to force countries into squandering billions on fake offsets that actually increase production of greenhouse gases is extortion,” said Samuel LaBudde, Senior Atmospheric Campaigner with the Environmental Investigation Agency (EIA). “China is not the victim here, and a world order responsive to climate change cannot be predicated on unrepentant greed.” With a 65 per cent tax on CDM projects, the Chinese Government has already received $1.3 billion — enough to destroy all the HFC-23 it produces for decades to come. Despite this, China still vents at least as much HFC-23 as it destroys, since about half of its HCFC-22 production is ineligible for CDM funding. Xie Fei’s statement makes it clear that preventing emissions is not nearly as important for China as continuing the enormous CDM revenues that benefit its government and industry alike.
“Carbon offsets derived from HFC-23 crediting only serve to subsidize the production of greenhouse gases and have no place in the future of carbon markets,” said Mark Roberts, International Policy Advisor for EIA. “If China is genuinely concerned about climate change rather than profiting from a fatally flawed system, it will stop blocking efforts to control HFC-23 emissions and stop threatening to hold global climate hostage to its unrealistic demands.”
Let us be clear, it is not only fossil fuel producers whose rapacious greed is hastening our path to catastrophic climate chaos.
NOTE: For some background, see: A decade later, will Summers again sabotage progress on Climate Change?