The year 2012 is viewed as a catastrophic time in several Mayan theories as well as by a Hindu sect in India. And now, some carbon emissions traders may harbor similar thoughts.
Consulting companies that profit from registering and selling carbon credits through an international carbon emission offset mechanism are running into a live-or-die situation this year, as the mechanism on which their business relies confronts an uncertain future.
The Kyoto Protocol, the international treaty to combat climate change, gave birth to the Clean Development Mechanism (CDM). It allows companies in industrialized countries to sponsor projects to reduce greenhouse gas emissions in the developing world.
It was conceived as a win-win-win idea. Developed countries would benefit by getting credit for reducing emissions but achieving them at a lower cost. Developing countries, such as China, earned cash as well as access to low-carbon technologies. And the planet benefited because reducing greenhouse gas emissions anywhere helps keep average temperatures from creeping too high.
China, by far, sold the most carbon credits through that mechanism. Carbon traders jokingly referred to the CDM as the “China Development Mechanism.” But with the clock ticking toward Dec. 31, 2012, when the first phase of the protocol is due to expire, the once biggest beneficiary of the program is watching business fade.
“Many Chinese CDM consulting companies now face tough times,” said Chen Hongbo, a carbon trading expert at the Chinese Academy of Social Sciences, a key think tank in Beijing. “Those companies have difficulties to find buyers for their new projects. And for projects that have been signed, many buyers broke the contracts.”
It is unclear how many CDM consulting companies in China have been forced out of the picture as the expiration of the Kyoto Protocol approaches, but there is evidence of shrinking activities. Yang Zhiliang, chairwoman of Accord Global Environment Technology Co., knows this well because her company is among many whose business turned south.
“It was conceived as a win-win-win idea.”
Translation: a ‘mass hallucination.’
‘Carbon credits’ occupy no space, they have no mass, and neither consume nor produce energy. They are an entirely virtual device for transferring monetary resources from one user (usually one highly skilled in resource management) to another (usually less skilled).
Carbon credits are not ‘real’ and deserve not a cent of resources.
Almost like selling junk bonds, only worse.