23 August 2007 09:07 [Source: ICIS news]
SINGAPORE (ICIS news)--Chemical plants in China and other developing countries can make windfall profits by destroying greenhouse gases, underscoring the need to redesign a Kyoto Protocol incentives scheme, a United Nations report said late on Wednesday.
The United Nations Environment Programme (UNEP) report showed that incentives for destroying a greenhouse gas called HFC-23, which is produced when HCFC-22 is made, could easily exceed the revenue from sales of HCFC-22 itself.
HCFC-22 is a refrigerant gas commonly used in air-conditioning applications.
The Kyoto Protocol is meant to combat global warming, and allows developed countries to offset their emissions using carbon credits earned from Clean Development Mechanism (CDM) projects.
These projects are implemented in developing countries to help cut emissions.
However, the UNEP study revealed that factories in China, and others in India, Mexico, Argentina and South Korea will earn up to 10 times more revenue than they actually need to destroy the powerful greenhouse gases.
The scheme was so generous that chemical plants will make more money destroying HFC-23, previously an unintended waste product than producing the refrigerant gas itself, and inadvertently drive up output of the greenhouse gas, it added.
It recommended national levies be applied to limit the financial gain of individual manufacturers after the first cycle of funding ends in seven years.
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