Another day, another carbon trading scandal

Gee whiz

Posted by Gar Lipow (Guest Contributor) at 10:43 PM on 22 Apr 2007

Read more about: climate | carbon trading | politics | United Kingdom | India

The London Times covers a carbon trading scandal in in India. Like our own New York Times, they bury the lede:

BRITISH companies are handing over millions of pounds to an Indian chemical plant so that western firms can continue to pump out thousands of tons of greenhouse gases.

Indian company SRF, which produces refrigeration gases in Rajasthan, stands to make a profit of more than �300m. That is how carbon trading is supposed to work, right? Even if they are making as much or more from the carbon credits as from the manufacturing process. Only:

While British companies use the credits instead of cutting their own pollution, SRF plans to reinvest its windfall in building a new plant producing another refrigerator gas called HFC-134a -- 1,300 times more damaging than carbon dioxide.

And under the current carbon trading system, that reduces SRF's credit not at all.

For story: Another day, another carbon trading scandal
8 Comments | Post a Comment

Carbon trading makes me very leery ...

Many economists have sought to convince me that this is the right path.

But, this just seems like the industrial-size version of the confusion related to carbon credits. Not sure whether carbon credits are fraud or fact ... or both ...

Blogging regularly at Get Energy Smart. NOW!!! to Energize America .

by A Siegel at 9:22 AM on 23 Apr 2007

At my school...

we had a great talk by a researcher from Environmental Defense who made the case for cap and trade, but I am leery too. There are a lot of these stories out there. A carbon tax isn't perfect and might need to be high but it's a lot more transparent and doesn't create these type of problems.

J.S. htt://voicesofreason.info

by jscorse at 9:42 AM on 23 Apr 2007

Missing Number

The per molecule efficacy of the refrigerant as a greenhouse gas is not relevant to determining whether this is a good tradeoff. The quantities of refrigerant are quite likely much less than 1/1300 of the relevant CO2 quantites; the number 1300 has essentially no meaning in the absence of a statement about quantites.

The story doesn't hold together very well substantively in other ways. It is very unclear who is doing what, and what they might have been doing absent the regulations.

It is one thing to be skeptical, it is another thing to throw numbers around in ways that don't mean very much. Let's try to be rational, please.

mt

by Michael Tobis at 10:37 AM on 23 Apr 2007

Nope, it is clear

>The per molecule efficacy of the refrigerant as a greenhouse gas is not relevant to determining whether this is a good tradeoff. The quantities of refrigerant are quite likely much less than 1/1300 of the relevant CO2 quantites; the number 1300 has essentially no meaning in the absence of a statement about quantites.

No. In this case, the excerpts I posted are really 100% of what you need to conclude that emissions increased.

SRF reduces emissions.
UK companies use that reduction to continue emitting - thus supposedly netting out to the same result as if they'd cut their own emissions, but:
SRF uses the profits from reducing its emissions to add a second plant that will produce additional emissions. 100% of those emissions are additional, because the savings from reductions in the old plant were already used as credits by UK utilities.

Capiche?

by Gar Lipow at 10:51 AM on 23 Apr 2007

Way I see it

Trading to locations which do not have enforcements of caps can be counter productive.

Trading entirely within a system of enforced caps does work though.

-David Ahlport

by GreyFlcn at 10:56 AM on 23 Apr 2007

Any thoughts

Any thoughts on RECs?
(Renewable Energy Credits)

-David Ahlport

by GreyFlcn at 11:04 AM on 23 Apr 2007

Trading within enforced Caps and RECs

Trading within enforced caps is different, but has other problems, which I've posted on a great deal.

RECs are a good idea in that they provide incentives for renewable energy. They are not carbon credits and should not be treated as such (an excuse for additional emissions elsewhere).

by Gar Lipow at 11:14 AM on 23 Apr 2007

Carbon Trading

It seems that any trades done with countries which do not have a carbon dioxide emissions cap will always yield an increase in carbon dioxide output.

Let me give an example. Suppose you were a manufacturing company in the UK and needed to buy credits to continue operations. One way to do this would be to invest in an energy efficiency program in Mexico, say to install a co-gen system in a manufacturing plant. There is an instantaneous reduction in carbon dioxide emissions overall, but also an increase in available capital in the Mexican plant. Long term the capital will be re-invested in plant operations, thus increasing carbon dioxide emissions.

Economies expand with trade, whether it is trading steel or carbon dioxide emissions credits. The problem with the current system is that it helps developing economies (Mexico in the above example) to the detriment of developed economies.

by Energy745 at 2:11 PM on 23 Apr 2007

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