Where CDM gets tricky

One criticism of the Clean Development Mechanism (CDM) is that it sometimes produces perverse incentives to increase rather than decrease emissions. One example concerns the production of HCFC-22, a refrigerant gas commonly used in air-conditioning, which produces HFC-23 (a very potent greenhouse gas) as a by-product. Environmentalists claim that the CDM is incentivising the production of HFCs, and that companies are over-producing HFCs so they can be paid to stop doing it.  

It’s hard not to see their point. HFC-23 is 11,700 times more powerful than CO2, meaning that just one project to reduce HFC-23 can produce millions of tradable carbon credits. Of approximately 2000 registered CDM projects, the 19 HFC-23 incineration projects alone count for just over half of the 430 million CERs issued to date. Further, it is estimated that the CDM finance pays 65 to 75 times more to destroy HFC-23 than it actually costs to produce. Close analysis of the monitoring data of some HFC-23 projects, such as the review performed by the NGO coalition CDM Watch of the Ulsan project in South Korea, reveals an artificial increase in HFC-23 production during the period of project registration under the CDM. 

A host of such evidence adds weight to claims that these plants are operated in such a way as to maximise the production of offset credits. Implicated in these accusations are two HFC-23 projects in China, in which the World Bank has invested around $1 billion through its Umbrella Carbon Facility. The World Bank however denies claims that these lucrative projects are attempting to game the system and attributes the increase in HFCs to a growing demand for refrigerators and air-conditioners. Not only do environmentalists insist that the system is being abused, they are also accusing the World Bank of attempting to disrupt the investigations currently underway.

Since HFC-23 projects currently account for over 50% of the total issued volume of CERs, the future of the CDM market now rests with the outcome of three regulatory processes currently underway, catalysed by these accusations.  

Lately spending a lot of time reviewing carbon credit methodologies and the Clean Development Mechanism managed by the UN. The incentives of such programs are not always easy to get right (rather never easy) and there’s now a movement that post-2012 (when the current commitment period ends) there will be more support for governments running programs for carbon reduction. It seems to me that governments might be even worse than markets in determining successful interventions…

The not so carbon neutral lifestyle

In less than 36 hours I have been in 4 countries (Netherlands,
Belgium, Sweden, US), spent more than six hours on airport busses,
traveled two hours by train and slept less than five.

Clearly I need to offset both some sleep and some carbon!

How much for a tonne of carbon?

This is my third post on how to carbon offset a trip from Brussels to Stockholm. In the first one I dealt with how much carbon to offset and in the second which type of offsetting to do. This post explores how much to pay for offsetting. So, once I figured out the standards part and what type of offsetting they did – the next challenge came up – what should be the price for a tonne of carbon?  This is not an easy question to answer as the market is very new, and there aren’t really any set standards on how to price carbon. What you can generally see is that CER projects will be more expensive than the VER projects (for explanation read my earlier post), as CER is priced through a market based system whereas VERs can allow their price to be set much more idependantly. 


From the 10 services I compared the price of offsetting a tonne of carbon varied from €6 (www.carbonfund.org) to €27 (www.carbonpassport.comwww.clear-offset.com). This would add between €3.4 and €13.86 euros to my trip between Brussels and Stockholm


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Planting trees or building power plants?

This is my second post in a series of on carbon offsetting where I compare different providers and ways of carbon offsetting for a trip from Brussels to Stockholm. The first post was about how much carbon you need to offset for a tripThe second question comes to what type of offsetting to do. Basically there are two broad classes – the ones that are approved through the Clean Development Mechanism (CDM) in the Kyoto protocol called Certified Emissions Reductions (CERs) and ones that aren’t so called VERs (Verified Emission Reductions).  


The CERs are usually big projects that have the financial and administrative resources to go through the rigourus certification process required. VERs are generally smaller projects and can be either in developing or developed countries (CDM is only for developing countries).

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Making my carbon offset count – which provider to choose?

I often travel to Stockholm through Eindhoven, as it is quite accessible from Brussels and also has Ryanair connections. Eindhoven Airport is really working hard on their green image, with everything from onsite carbon offsetting to collecting and reusing rain water to flush toilets. The carbon offsetting caught my attention this time, and I played around with the machines that they had put up that allows you to calculate and offset your emissions.


I have read and heard a lot about carbon offsetting, and being a person who aspires to be an asset for the planet rather than a burden, I figured it would be interesting to give it try. However I wasn’t ready to simply trust the machine at the airport but rather I wanted to be a conscious shopper in the field of carbon.

So, I set out to compare and try to understand the market for consumer offsetting.

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