As is customary for many over the Chinese New Year, I spent a lot of time cleaning up old junk in my house the last few weeks. As luck would have it, I happened to run over a December article in BusinessWeek reporting that the U.N. had stopped awarding carbon funding of green projects in China. An excerpt of the article (cnn copy) is provided here:
The United Nations body in charge of managing carbon trading has suspended approvals for dozens of Chinese wind farms amid questions over the country’s use of industrial policy to obtain money under the scheme.
China has been by far the biggest beneficiary of the so-called Clean Development Mechanism, a carbon trading system designed to direct funds from wealthy countries to developing nations to cut greenhouse gases.
China has earned 153m carbon credits, worth more than $1bn and making up almost half of the total issued under the UN-run programme in the past five years, according to a Financial Times analysis. The credits are currently trading at about $10-$15 each.
Industrial countries can meet part of their commitments under the 1997 Kyoto protocol to battle global warming by financing projects that mitigate emissions in developing nations. Projects only qualify for credits if the applicants prove they would not have been built anyway, a condition known as “additionality”.
The controversy over Chinese wind farms and other CDM projects will intensify calls for the system to be overhauled at the UN’s Copenhagen conference, which opens on Monday. Continue reading U.N.’s Application of the Clean Development Mechanism to China – Fair or Unfair?