De vervuiler betaalt niet, maar verdient!

The Kyoto Protocol's Clean Development Mechanism allows companies to continue polluting at home by assisting in emissions reductions abroad. If its critics are right, however, the system is being massively abused and actually discourages reductions that might otherwise be made.

Nearly all European industrial companies emitting environmentally harmful greenhouse gases are required to purchase emissions certificates if they don't reduce the amount of CO2 they pump into the atmosphere. Even so, they always have another option: They can simply buy their way out and keep on doing exactly as they've always done as long as they pay for climate-protection measures somewhere else in the world.

This selling of environmental indulgences is known as the Clean Development Mechanism (CDM) -- and it is probably the most useless aspect of climate legislation to be found. CDM projects are meant to make it possible for industrialized countries to fulfill a portion of their required emissions reductions in developing and newly industrialized countries -- and at a considerably lower cost. Using this method, German companies can compensate for roughly 20 percent of their emissions.

Companies can invest in environmentally friendly hydroelectric power plants in China or India, for example, or in facilities for extracting methane gas. However, many of these operations had already been planned before the German companies stepped into the picture. And while the law stipulates that only new projects will be supported through CDM, it's not always easy to determine exactly what qualifies as new.

The upshot of all this is that potential reductions are being replaced by real emissions. Indeed, Nicola Jaeger, an earth scientist based in Berlin, believes this system could even lead "to an increase in global emissions." As part of a recent dissertation project, Jaeger analyzed dozens of projects that German companies were involved in and found that many of them had already been completed before being registered as CDM projects.

Good examples of these kinds of projects can be found in ones in China and India involving HFC-23. A byproduct of obsolete coolant-manufacturing facilities also known as fluoroform, HFC-23 is estimated to be 11,700 times more environmentally harmful than carbon dioxide. Thus, if a company renders one metric ton of HFC-23 harmless, it can pocket emissions certificates worth 11,700 metric tons of CO2.

Of course, factory operators in India and China know what can be used to replace HFC-23, and many of them have switched to producing alternative coolants. China even plans to invest $47 billion (€36 billion) in green energy. But they also know about the CDM reward system. Indeed, if the climate saviors hadn't come along and made polluting profitable, manufacturing these coolants would probably have been banned in China long ago, as it is in the European Union. But now it suddenly pays to keep old, environmentally harmful plants running and to catch the HFC-23 in oxidation devices.

In fact, nearly everyone profits from the arrangement -- except, of course, the climate. There are: the equipment manufacturers, who install the catalyzers; the coolant companies, which earn around five times as much for exhaust-gas disposal as they do for their main product; the Chinese government, which slaps a 65 percent tax on the certificates; and financial institutions, such as Deutsche Bank, which bundle pollution rights and sell them as green investments to energy giants such as E.on and RWE, whose customers then have the honor of paying for this environmental shell game simply by paying their utility bills.