China blackmails European countries by threatening to release hydrofluorocarbons (HFC-23) if not paid off with billions of euros with exorbitant off-set credits, another form of corruption by Chinese officialdom

A “China Syndrome” … in a different twist …

by Adam Siegel, Get Energy Smart Now, November 10th, 2011

No, not a nuclear meltdown but a different form of nuclear option.

For many, one of the painful elements of European cap and trade along with other arenas enabling and funding carbon offsets is how it creates opportunity for gamemanship that exaggerate positive impacts and wastes resources.

One arena where this has seemed to be the case is with much of the money going into China to reduce emissions there. Put aside the simple fact that the Chinese economy is, essentially, the most cash-rich economy in the world and the society is about the most over-polluted, suggesting that there are the resources and the domestic drivers that should enable self-funding of pursuing cleaner energy agendas (which is what we are seeing with the massive subsidies into the solar market), there have too many cases and far too many rumors of situations where Chinese firms have created a factory at lower efficiency and higher polluting that they would have otherwise to then get carbon offset funding to profitably go in and do those efficiency and pollution control investments.

The vast amounts paid for HFC-23 offsets have led factories in China and elsewhere to manufacture far more HCFC-22 and its HFC-23 by-product than necessary, just to maximize the amounts paid to destroy HFC-23 through the UN-backed carbon trading scheme.

In part because of this fraud and the huge profit margins associated with many of these clean-up activities, and complaints about subsidizing Chinese industry to compete with home industries, and … Europe has been considering changing the structure of carbon credit funding.

In response, we’re seeing the potential for a China Syndrome nuclear-option reaction — if you’re not going to give us the carbon credit cash, we’re going to go ahead and do serious damage to the atmosphere.

As reported in the Guardian,

“An environmental group [Environmental Investigation Agency] has accused China of climate blackmail after threats to vent powerful greenhouse gases if Europe cuts off carbon credits next year. The row over hydrofluorocarbon-23 offsets – which have a much greater warming effect than carbon dioxide and linger in the atmosphere for 200 years – has intensified before international climate negotiations in Durban this month. Since 2005, Chinese firms have received the bulk of the $6bn in carbon credits for the reduction of these gases, which are produced in the manufacturing of refrigerant chemicals. The money has mostly come from European firms that have bought the offsets under the clean development mechanism, but this source of funding will come to an end next year. The EU has banned HFC-23 offsets because they are inefficient: the value of credits is 70 times the cost of destroying HFC-23 gases.There are also widespread suspicions that Chinese and Korean firms have cynically created hydrofluorocarbon facilities in order to qualify for credits, which can generate twice as much income as selling the refrigerant. But Europe’s decision has angered Chinese officials responsible for administering the system, which has generated $1.3bn in tax revenues for the state.”

More from EIA directly,

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.

Getting rid of HFC-23 and other super-GHG chemicals is one path to quickly have a meaning impact on climate risks — in no small part due to the reality that they are projected to increase massively over the coming years. However, due to these 70:1 profits on cost vs. CDM payments, the Chinese have been roadblocking international efforts to reduce super GHGs as was done with CFCs in response to the global ozone problem.

Because of these vast profits, China has repeatedly rejected attempts to 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 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.

As with the “blackmail” comment, EIA isn’t mincing words about the Chinese comments re CDM payments and HFC-23.

“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.” With a 65% tax on CDM projects, the Chinese Government has already received $1.3 billion — enough to destroy all the HFC-23 it produces for decades to come. Despite this, China still vents at least as much HFC-23 as it destroys, since about half of its HCFC-22 production is ineligible for CDM funding. Xie Fei’s statement makes it clear that preventing emissions is not nearly as important for China as continuing the enormous CDM revenues that benefit its government and industry alike.

“Carbon offsets derived from HFC-23 crediting only serve to subsidize the production of greenhouse gases and have no place in the future of carbon markets,” said Mark Roberts, International Policy Advisor for EIA. “If China is genuinely concerned about climate change rather than profiting from a fatally flawed system, it will stop blocking efforts to control HFC-23 emissions and stop threatening to hold global climate hostage to its unrealistic demands.”

Let us be clear, it is not only fossil fuel producers whose rapacious greed is hastening our path to catastrophic climate chaos.

NOTE: For some background, see: A decade later, will Summers again sabotage progress on Climate Change?

http://getenergysmartnow.com/2011/11/10/a-china-syndrome-in-a-different-twist/

At 22nd annual meeting of the signers of the Montreal Protocol, negotiators are considering a proposed expansion in the ozone treaty to phase out the production and use of the industrial chemicals known as hydrofluorocarbons or HFCs, chemicals that have thousands of times the global warming potential of carbon dioxide

A Novel Tactic in Climate Fight Gains Some Traction

by John Broder, The New York Times, November 8, 2010

WASHINGTON — With energy legislation shelved in the United States and little hope for a global climate change agreement this year, some policy experts are proposing a novel approach to curbing global warming: including greenhouse gases under an existing and highly successful international treaty ratified more than 20 years ago.

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Gregory Bull/AP Photo

Mario Molina, a Mexican scientist, speaking to students in September. He wants to expand the scope of the Montreal Protocol.

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The treaty, the Montreal Protocol, was adopted in 1987 for a completely different purpose, to eliminate aerosols and other chemicals that were blowing a hole in the Earth’s protective ozone layer.

But as the signers of the protocol convened the 22nd annual meeting in Bangkok on Monday, negotiators are considering a proposed expansion in the ozone treaty to phase out the production and use of the industrial chemicals known as hydrofluorocarbons or HFCs. The chemicals have thousands of times the global warming potential of carbon dioxide, the most prevalent greenhouse gas.

HFCs are used as refrigerants in air-conditioners and cooling systems. They are manufactured mostly in China and India, but appliances containing the substance are in use in every corner of the world. HFCs replaced even more dangerous ozone-depleting chemicals known as HCFCs, themselves a substitute for the chlorofluorocarbons that were the first big target of the Montreal process.

“Eliminating HFCs under the Montreal Protocol is the single biggest chunk of climate protection we can get in the next few years,” said Durwood Zaelke, president of the Institute for Governance and Sustainable Development, a non-governmental organization based in Washington. He noted that the ozone protection effort had begun under former President Ronald Reagan and continues to enjoy bipartisan support.

The United States has thrown its support behind the proposal and negotiators said there was a strong current of support for the move at the meeting on Monday. All the signatories to the Montreal Protocol would have to agree to the expansion, but no further approval from Congress would be needed. So far, there has been no Congressional or industry opposition to the idea.

But the plan is not expected to be adopted this year. Large developing countries, including China, India and Brazil, object that the timetable is too rapid and that payments for eliminating the refrigerant are not high enough.

One advantage to using the Montreal protocol as a vehicle, supporters say, is that negotiations over the treaty have been utterly unlike the contentious United Nations climate talks that foundered in Copenhagen last year. Negotiators say that without legislative action on curbing greenhouse gases by the United States, little progress will be made when countries gather in Cancún, Mexico, late this month for another round of climate talks.

In a post-election news conference, President Obama noted that it was doubtful that Congress would do anything to address global warming “this year or next year or the year after.”

Unlike the Kyoto Protocol, the Montreal treaty has been signed by all nations. They conduct their business with little drama and with broad scientific and technical input from governments and industry. The financing mechanisms, while occasionally contentious, are generally quickly resolved and seen as equitable.

The ozone treaty was unanimously ratified in 1988 by the United States Senate, which a decade later unanimously voted against adopting the Kyoto Protocol to address climate change. Montreal’s pollution reduction targets are mandatory, universally accepted and readily measurable. None of that is true of the climate process.

The Montreal Protocol has phased out nearly 97% of 100 ozone-depleting chemicals, some of which are also potent climate-altering gases. The net effect has been the elimination of the equivalent of more than 200 billion metric tons of global-warming gases, five years’ worth of total global emissions, far more than has been accomplished by the Kyoto process.

It has been, according to the former United Nations secretary general Kofi Annan, “perhaps the most successful international agreement to date.”

The proposal to eliminate HFCs was advanced several years ago by the tiny island nation of Micronesia, one of the places on Earth most vulnerable to sea-level rise and other global warming effects.

The United States quickly signed on. Along with Mexico and Canada, the Obama administration has proposed a rapid series of steps to reduce HFC production, with rich countries meeting a faster timetable than developing nations and helping to pay the poorer countries to find substitutes. But the Environmental Protection Agency estimates that adopting the HFC proposal could eliminate the equivalent of 88 billion metric tons of carbon dioxide by 2050, and slow global warming by a decade.

Daniel A. Reifsnyder, the deputy assistant secretary of state for environment and the nation’s chief Montreal Protocol negotiator, said that it might take several years to persuade the ozone treaty countries to back the plan.

In addition to pace and cost issues, some countries say that HFCs have little impact on the ozone layer and thus should be handled under the United Nations climate change talks. Mr. Reifsnyder dismissed that as a legalistic argument and said that the ozone treaty could and should be used to achieve broader environmental objectives.

“What we’ve found is that the Montreal Protocol has been a very effective instrument for addressing global environmental problems,” Mr. Reifsnyder said in an interview. “It was created to deal with the ozone layer, but it also has tremendous ability to solve the climate problem if people are willing to use it that way.”

Mario Molina, the Mexican scientist who shared the Nobel Prize in chemistry for his groundbreaking work in identifying the role of chlorofluorocarbon gases in the breach of the stratospheric ozone layer, said that it might take two or three years for other countries to see the virtues of the HFC reduction.

“My hope is that everybody will agree with this proposal from the United States and Mexico and a few other countries because the Montreal Protocol has been so successful at controlling these industrial chemicals,” he said in an interview from his institute in Mexico City.

Dr. Molina said that extending the protocol to include HFCs could reduce the threat of climate change by several times what the Kyoto Protocol proposes. He noted that the climate treaty had fallen far short of its goals, and that there was no agreement on what should replace it when its major provisions expired in 2012.

“We understand it’s a stretch to use an international agreement designed for another purpose,” he said. “But dealing with these chemicals and using this treaty to protect the planet makes a lot of sense.”

Link:  http://www.nytimes.com/2010/11/09/science/earth/09montreal.html

Eliminating hydrofluorocarbons (HFCs) could deliver reductions of up to 170 billion tons of CO2e over the next 40 years at a total cost of $4 billion

Crunch Time in Copenhagen on Super Greenhouse Gases

Fast Action Option Could Help Close 'Mitigation Gap' and Rescue Talks

by David Sassoon, solveclimate.com, December 18, 2009

There's a global warming solution of enormous potential on the negotiating table here in Copenhagen. It could deliver reductions of up to 170 billion tons of CO2e over the next 40 years at a total cost of merely $4 billion. It is a fast action solution, something that can be done quickly and whose benefits would be felt almost immediately. And it works by preventing the manufacture of highly potent greenhouse gases, so that they never enter the atmosphere to begin with.

Nobody disputes the science, the negligible cost of action or the universal benefits of deploying the solution, but it has remained mired in the larger negotiating process as a potential pawn for extracting concessions. Now, with the climate talks bogged down as they head into the last day, this solution could play a role in rescuing the talks from failure.

It is yet another example among many at these talks in Copenhagen where the painful tension between global politics and universal morality is on exhibit, where deals and payoffs are needed to allow diplomats working in their own nations' interests to do the right thing for the planet.

"We could act to eliminate one of six greenhouse gases before the end this week," Durwood Zaelke, president of the Institute for Governance and Sustainable Development, said. "We're juggling soap bubbles right now."

The opportunity on the table is ridding the world of "super greenhouse gases," a term for hydrofluorocarbons, or HFCs. HFCs were developed as replacement gases for ozone-destroying chemicals commonly used as refrigerants. Though HFCs do not harm the ozone, it turns out they are lethal global warming agents, thousands of times more potent than CO2 at warming the planet.

With rising prosperity in developing nations, HFC use is expected to skyrocket. Left unchecked, their build-up in the atmosphere could essentially negate current efforts under consideration to reduce carbon dioxide to safe levels by 2050.

The decision that is needed here to rid the world of HFCs before they are even manufactured is a very simple one. The Conference of Parties needs to officially request another existing UN treaty regime — the Montreal Protocol — handle the phase down of HFCs.

The Montreal Protocol was entered into by Ronald Reagan and ratified by the Senate more than 20 years ago. It has already rid the world of almost 100 different ozone destroying substances, and has a working infrastructure in place in every country on the planet. A phase down of HFCs through the Montreal Treaty would be a slam dunk, veteran negotiators say.

The idea is to create a synergy between the ozone treaty and the climate treaty, between what Zaelke calls "the treaty that's never failed" and "the treaty that has yet to succeed." When the parties to the Montreal Protocol met in November and considered taking on the phase down of HFCs, a proposal supported by the U.S., the Chinese and Indian delegations stood opposed.

Observers said their motivation was largely stoked by financial self-interest. China and India could get paid a lot more for phasing out HFCs under a climate regime negotiated in Copenhagen than one set up through the Montreal Protocol.

"You're looking at a difference of getting $20 a ton under a climate regime and getting 20 cents a ton incrementally under the Montreal Protocol," Mark Roberts, an environmental attorney and international policy advisor for the Environmental Investigation Agency, told SolveClimate at the time.

HFCs thus have become part of the financial shell game here, as well, similar to forest resources, being asked to serve in the first instance as a monetary instrument. Their inclusion in a treaty hinges upon their ability to act as a potential source of cheap offsets to lubricate carbon markets. China and India want to realize windfall profits for the phase down, as they already have with HFC-23 under the Clean Development Mechanism, which has funneled billions of dollars into their economies for little environmental benefit. The U.S. wants HFC credits on the market so that they can substitute for more expensive CO2 reductions at home.

According to Roberts, China has more leverage at the moment. It is not going to negotiate away a pot of gold to the Montreal Protocol, which will pay the full costs of the phase down but not return a windfall, unless China gets something in return. The Obama team is pointing to HFCs as a U.S. success story already. It is highlighted in the brochure being handed out at the U.S. information center here in Copenhagen.

"In September, the United States joined Canada and Mexico in formally supporting a proposal to dramatically reduce the emissions of hydrofluorocarbons (HFCs), a potent greenhouse gas, under the Montreal Protocol," the brochure boasts. "Amending the Montreal Protocol to phase down HFCs in developed and developing countries could prevent about 90 billion metric tons of carbon dioxide equivalent emissions through 2050."

Though the 90 billion ton figure is conservative — about half of what scientists estimate — it is still an enormous reduction pool that could figure into the end-game today when President Obama arrives.

"Our understanding is that both developed and developing countries, including China, have signaled that if the big issues are resolved, the HFC phase-out can be part of the process," Roberts told SolveClimate. "The EU in particular is pushing the issue, but until the money, verification and KP [Kyoto Protocol] issues are resolved, this is in the background. Hopefully enough ministers have been briefed so that this will be added to any comprehensive outcome."

News leaked out last night that the deal currently on the table provides for emission reductions far short of what is needed, and a scramble is on to "close the mitigation gap." HFCs could have suddenly acquired a negotiating utility heretofore unexpected in the fluid context here.

Zaelke has been working the delegations on the issue, pressing into their hands a fact sheet (attached below) that tells the unappreciated story of the Montreal Protocol's success in delivering climate protection benefits already. Through the phase out of ozone destroying substances over the last 20 years, the treaty has also delivered about 200 billion tons of avoided CO2e emissions, since those now-banned substances also warm the climate. That is 20 times more emission reduction than the first commitment period under the Kytoto Protocol is expected to deliver when it ends in 2012.

The total cost? A mere $2.4 billion. And moving forward, Zaelke's fact sheet shows, there is the possibility of realizing up to 170 billion tons of avoided CO2e emissions by 2050 through the phase down of HFCs at a total cost of only $4 billion.

“Ministers need to recognize the few opportunities available on the table to build trust and achieve tangible results," Zaelke said. "It’s beginning to dawn on some folks at least that the fast, forgotten 50 percent can help close the gap, and keep us below 1.5 or 2 degrees Celsius."

HFCs are only one piece of that potential Zaelke refers to, which also includes fast action solutions through cutting tropospheric ozone and methane emissions, and sequestering carbon in biochar. Those additional measures, Zaelke believes, can help bring the world back to 350 ppm and buy time as the global economy decarbonizes over the next 40 years. But in the Copenhagen crunch today, the HFC phase down is the only fast action mitigation strategy that has a chance of advancing.

That's because the language of the current treaty text specifically gives ministers the option of asking the Montreal Protocol to handle the phase down of HFCs. Paragraph 4 of the section on short term mitigation has two options:

Para. 4

Option 1:

Urges Parties, without prejudice to the scope of the Convention and its related instruments, to pursue, under the Montreal Protocol on Substances to Delete the Ozone Layer, the adoption of appropriate measures to progressively reduce the production and consumption of hydrofluourocarbons.

Option 2:

Delete para. 4