The Economist's Apprentice

In which a little girl confronts the world and battles the anti-humans.

Saturday, August 13, 2005

Kyoto Emissions Credit Trading

The Dutch hope to earn half of their Kyoto emissions reduction credits through purchasing them from developing countries. For example, they are upgrading a landfill in Brazil to capture the methane emitted and convert it to carbon dioxide. Methane gets 21 times as many emissions credits as carbon dioxide, so the process generates a lot of credits.

Does the logic of emissions trading work when they are purchased from a country with no obligation to reduce emissions themselves? It doesn't seem reasonable to believe that Brazil's underlying desire to cut greenhouse emissions will actually be changed by these cash payments from developed countries. If they are paid to cleanup one landfill, might they be more likely to cut corners in another area? Especially, if being lax might generate new projects to generate emissions reduction payments in the future.


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