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Climate Change - A Moment Of Truth

Publication Date: 
May 15, 2008

Lecturer in Law Michael Wara is quoted in The Economist about how Clean Development Mechanisms (CDMs) play out:

Michael Wara of Stanford University calculates that the credits from cleaning up refrigerant production are twice as valuable as the refrigerants themselves. This would have given firms an incentive to produce more trifluoromethane, simply for the sake of cleaning it up, had the UN not amended its rules to exclude new factories from participating in the CDM. Nonetheless, Mr Wara maintains, the riches on offer from the CDM are discouraging governments in the developing world from taking easy steps to reduce their countries' greenhouse-gas emissions.

He cites China, where partly state-owned power firms are applying for credits for building gas-fired power plants instead of dirtier ones run on coal. He argues that China, which is keen to improve air quality anyway, would probably be building such plants with or without the CDM. But the government might now hesitate to issue regulations to that effect, for fear of violating the “additionality” rule, and so losing out on valuable credits.