World Bank logs largest ever greenhouse gas deal
Tue Aug 29, 2006 6:14 PM ET



By Timothy Gardner

NEW YORK (Reuters) - The World Bank put together on Tuesday the largest greenhouse gas deal ever, where European and Asian companies and others will pay two Chinese chemical companies $1.02 billion to reduce output of gases believed to cause global warming.

In the deal, European and Asian companies bound by the U.N.'s Kyoto Protocol to tackle climate change, will pay the Chinese chemical companies to reduce and destroy emissions of HFC23, a heat-trapping gas 11,700 times stronger than carbon dioxide.

The deal will reduce emissions by about 19 million tons of carbon dioxide equivalent annually, according to the World Bank.

About 75 percent of the money to purchase the reductions came from private capital, it said.

Additional participants included entities in World Bank managed funds including the Danish Carbon Fund, the Italian Carbon Fund, Deutsche Bank, Mitsui & Co and two entities of Natsource LLC, which calls itself the world's largest greenhouse gas asset manager.

As a developing country, China, the world's No. 2 producer of greenhouse gases, is not required to reduce emissions of heat trapping gases in the first phase of the international global warming pact the Kyoto Protocol, which runs from 2008 to 2012.

Tuesday's deal was done under Kyoto's Clean Development Mechanism (CDM), which allows rich countries to meet some of their greenhouse gas reduction obligations under the Kyoto Protocol by investing in reductions in developing countries.

"The resources came together from lots of different directions. There was pooling and deployment of capital in a large scale which was good to see that the CDM could do that," Jack Cogen, president of New York-based Natsource, said in a telephone interview.

The Chinese government will recoup 65 percent of the money from the deal though taxes on the two chemical companies and use it cut greenhouse gases and expand the use of renewable energy.

In addition, the technology to burn and destroy HFC23, a waste gas formed in making refrigerants, can be put in place quickly.

"The beauty of industrial gas projects is that both of these projects will start generating greenhouse gas emission reductions later this year, one in October and one in December," said Anita Gordon, a World Bank spokeswoman.

The world's No 1. emitter of greenhouse gases, the United States, did not ratify Kyoto.

This is from Greg Palast's book, "Armed Madhouse, etc". (Sorry for the 'etc.' Mr. Palast, the title is just too long)

Page 219 and following:

Under the U.S. treaty proposals, any U.S. or European manufacturer who wants to crank up their earth-baking discharges will have to buy up rights from a green-minded company that has cut emissions. But where in the world will they find earth-friendly industries willing to sell their rights to pollute? You'll never guess: Russia.

In case you were on vacation when Russa became an eco-paradise, I'll fill you in. The Kyoto treaty's rights to pollute were allocated based on the level of air trash pumped out in 1990. Up to that year, remember, Russians were under Communist rule, forced to work in grimy, choking factories. Now thay are free not to work at all. The post-Communist Russian industrial depression cut that nation's emissions by 30 percent. Thus, the bright side of starvation on the steppes: a bountiful supply of pollution "credits," enough to eliminate 90 percent of the U.S. industries' assigned reduction in pollution. (End of quote)

So, if China isn't required to reduce emissions, but does agree to or already has, they must have been assigned credits by the Environmental Defense Fund, who evidently monitors this. (Remember, they've had 16 years to reduce their own emissions and accrue credits) They can now, in turn, sell those credits to the mega-emitters who don't wish to do anything at all about greenhouse gases, except to pass these fees on to their customers, and get a whole lot of PR while doing it, plus credit for reducing airtrash, which they really haven't done at all.