(NYT) Europe Suggests Revisions to Carbon Trading Scheme

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Europe Suggests Revisions to Carbon Trading Scheme
2010-11-26 07:55:16.54 GMT

(New York Times) -- BRUSSELS (Reuters) — The European
Union's executive commission has proposed banning by 2013 the
most common types of carbon offsets, mostly from India and China,
to help restore credibility to the disputed system.
The move comes ahead of the climate talks next week in
Cancún, Mexico.
Europe's Emissions Trading Scheme places caps on carbon
gases emitted by industry but, under a separate system run by the
United Nations, allows companies to offset emissions by paying
for carbon cuts in developing countries, as a cheaper alternative
to cutting their own.
The executive commission said that 80 percent of the
disputed hydrofluorocarbon credits and 60 percent of the nitrous
oxide credits came from China, and most of the rest came from
India. The commission wants to stop exploitation of the system by
project developers who are suspected of adjusting refrigerant
plants to produce more of potent greenhouse gas hydrofluorocarbon
23 as a waste byproduct and then destroying it to claim the
carbon offsets.
It proposed that from Jan. 1, 2013, the trading scheme
should exclude offset credits from hydrofluorocarbon 23 and
nitrous oxide credits from adipic acid production.
The move was closely watched by carbon traders, although
they were likely to have partly factored in the ban after details
of the decision were reported early this month.
Several members of a United Nations panel that oversees the
international offsetting scheme agreed that the hydrofluorocarbon
23 scheme should be revised. Europe's executive commission said
the hydrofluorocarbon credits from industrial projects were
overvalued in Europe by a factor of 78, discouraging the flow of
money to more credible projects in the least developed countries.
"The rates of return of these projects are excessive," it
said in a statement. "The E.U. considers that cheap emission
reductions, such as those from industrial gas projects, should
not be done through the carbon market, but instead should be the
responsibility of developing countries as part of their
appropriate own action to keep global warming below 2 degrees
Europe's top climate official has also said that some
companies had been "gaming the system" by increasing the
production of industrial gases to maximize their credits.
But the International Emissions Trading Association
questioned the European Union's right to act alone. "There must
be some consistency between U.N. and E.U. rules," the association
president, Henry Derwent, said. "There is a sense that the
commission thinks it doesn't matter what the United Nations rules
are, and we are concerned about that."

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