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China: climate ransom scheme alleged

November 10, 2011

That is the explosive charge from something called the Environmental Investigation Agency:

In the run-up to the international climate negotiations in Durban later this month, China has responded to efforts to ban the trading of widely discredited HFC-23 offsets by threatening to release huge amounts of the potent industrial chemical into the atmosphere unless other nations pay what amounts to a climate ransom.

China’s threat comes after the European Union and other nations moved to ban HFC-23 credits from internal carbon trading mechanisms in recognition of the perverse incentives created by these credits in the Clean Development Mechanism (CDM). The vast amounts paid for HFC-23 offsets have led to factories in China and elsewhere manufacturing more HCFC-22 and its HFC-23 by-product than necessary, just to maximise the amounts paid to destroy HFC-23 through the UN-backed carbon trading scheme.

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.

Because of these vast profits, China has repeatedly rejected attempts to help developing countries 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 gas 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.

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.”

I cannot vouch for the EIA, as this is the first time I have ever heard of them.  They are certainly a legitimate organization, having even earned notice from the US EPA for their efforts:

The Environmental Investigation Agency (EIA) has been tackling the issue of illegal trade in ODSs since 1996 and has provided an essential service in exposing illegal activity, disseminating information to the Montreal Protocol and to other relevant bodies, and providing assistance to combat smuggling operations. EIA is the world’s leading nongovernmental organization (NGO) working on the issue of illegal trade in ODSs. EIA’s track record of investigative work, scientific documentation, and representation at international conventions has earned EIA a reputation for highly effective and successful campaigning. EIA also continues to share these skills with local groups and government officials to help empower them in the fight against environmental crime.

So, while certainly a legitimate organization, I have no experience with them so I cannot assess whether or not they have a pattern of hyperbole.

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