Perverting the CDM

There’s a great recent New York Times piece on the massive perverse incentives created by the Clean Development Mechanism:

A bit of background: for most of the history of refrigeration, chlorofluorocarbons (CFCs) and  hydrochlorofluorocarbons (HCFCs) were used as the medium for absorbing heat at one point and releasing it somewhere else, due to the fact that they boil/condense at convenient temperatures and pressures, and are generally non-toxic and non-flammable.  In the mid-1970s it was discovered that leaked gas would rise to the stratosphere where the chlorine atoms would go through a series of reactions eventually catalyzing the destruction of the ozone that shields the planet from some of the more dangerous wavelengths (UV-B) of solar radiation.  (Fun fact: the guy that invented CFCs also invented leaded gasoline, and has been suggested to hold the ignoble title of having done more damage to the environment than any other person). This discovery resulted in the adoption of the Montreal Protocol (MP), an international agreement to phase out CFCs and later HCFCs globally.  The MP is regarded as one of the most successful international treaties in history- it was approved rapidly after the ozone hole was first discovered (signed by conservatives Ronald Reagan and Margaret Thatcher no less),  eventually ratified by every country in the UN system, and is expected to result in the complete phase-out of these materials globally by 2030 and the recovery of the ozone layer by 2050.  The treaty has led to the replacement of the banned materials by chlorofluorocarbons hydrofluorocarbons (HFCs) with much lower ozone-depleting potential (my own undergrad thermo textbook has a lengthy appendix of HFC-134a properties).  However, in the years since the protocol was ratified, the issue of global climate change has come to light- it turns out that all of these synthetic gases are also extremely potent climate forcing agents (with global warming potentials in the thousands to tens of thousands), and thus even the ozone-safe HFCs present a long-term danger to climate.   This has recently led to ongoing efforts to tie ozone protection and GHG-mitigation policies together, and now to phase out HFCs too in favor of more benign refrigerants like ammonia and CO2.  Between the overlapping acronyms and the “oops, just kidding” policy reversal on HFCs, it’s no wonder that many laypeople are confused by environmental regulations!

I’m not an expert in this area, but it seems the fundamental issue here is that the CDM is all carrots and no sticks, i.e. that while carbon credits are extremely lucrative, eligible countries are by definition not party to any emissions control agreements and thus there is no penalty associated with pushing baseline GHG emissions up in order to create greater GHG mitigation market opportunity (as long as these countries stay within the relatively slow MP phase-out schedule).  Offset programs like this are supposed to require strong evidence that the GHG mitigation being credited is indisputably above and beyond what would otherwise have occurred in a world without the program, a requirement know as ‘additionality’ (the same issue comes up frequently in the biofuel lifecycle assessment literature, with authors pointing out that there is no basis for crediting biofuels with carbon uptake from biomass growth or the transition to progressive land management practices that would have happened even in the absence of biofuel production).  In this case we seem to be seeing the opposite, with the promise of weakly-monitored carbon financing actually leading to an inflation in baseline emissions.

Well, at least the ozone hole is recovering…. sort of…
Image from http://earthobservatory.nasa.gov/IOTD/view.php?id=49040

I personally think that the CDM and other efforts to mobilize carbon  finance to implement projects with huge collateral benefits to the users is tantalizing, as I’ve written about before in the context of domestic energy use or progressive agriculture in developing countries.  However, the fact that such fundamental flaws in implementation still exist a decade and a half after Kyoto certainly gives me pause.  It seems like this would be straightforward to correct with a more appropriate/conservative definition of the baseline emissions case against which emissions savings are evaluated.  Hopefully such changes are implemented before this endeavor (and others similar to it) becomes completely discredited in the eyes of the public.

PS:  going through our archives, it looks like Paul has posted on this issue before in the context of coal power plants in India.

PPS:  Did anyone catch the King of the Hill episode about carbon offsets?

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7 Responses to Perverting the CDM

  1. Paul says:

    Here is an article that has some evidence from wikileaks that people knew the CDM was broken:
    http://www.dnaindia.com/mumbai/report_carbon-credit-fraud-how-big-firms-faked-green-to-mint-gold_1738940

  2. John says:

    A follow-up from the Times on the seedy underworld of refrigerant smugglers:
    http://www.msnbc.msn.com/id/48951411/ns/us_news-the_new_york_times/#

    🙂

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  5. John says:

    Update: looks like there’s a lot of recent progress on coupling international climate change (UNFCCC) and ozone (Montreal Protocol) regulatory frameworks together in order to phase out HFC use:
    http://www.whitehouse.gov/the-press-office/2013/09/06/united-states-china-and-leaders-g-20-countries-announce-historic-progres

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