CARBON CREDIT SCAMS

The Kyoto Treaty provides a "Clean Development Mechanism" which allows some companies to offset their carbon emissions by funding low-carbon projects that otherwise wouldn't be funded. The problem it that many of them would be funded anyway, so there's no net saving.

The great carbon bazaar
By Mark Gregory
Business correspondent, BBC World Service, India
Page last updated at 23:28 GMT, Wednesday, 4 June 2008 00:28 UK

The credits are generated by a United Nations-run scheme called the Clean Development Mechanism (CDM).

The mechanism gives firms in developing countries financial incentives to cut greenhouse gas emissions.

But in some cases, carbon credits are paid to projects that would have been realised without external funding.

The BBC World Service investigation found examples of projects in India where this appeared to be the case.

Arguably, this defeats the whole point of the CDM scheme, set up under the Kyoto climate change protocol, as these projects are getting money for nothing.

...in one case a company is earning truly staggering sums of money from the carbon credits it is receiving - perhaps as much as $500m (£250m) over a period of 10 years - for a project it says it would have carried out without the incentive of the CDM.

Indian chemical company SRF is also receiving substantial numbers of CDM carbon credits for eliminating an obscure industrial waste product known as HFC23, a highly potent greenhouse gas.

During a tour of the plant at SRF's factory in Rajasthan, the company's official spokesman, Mukund Trivedy, revealed that "we would have done it anyway". He was then asked to confirm whether the project would have been carried out even if the CDM scheme hadn't been set up.

"That's right," he responded.