Beijing fund warns on Kyoto CO2 offset rule changes

Fri Jul 23, 2010 7:43am GMT

* Chinese project developers say Kyoto review must be fair

* Govt fund says it supports carbon offset projects

LONDON, July 23 (Reuters) - A Chinese government fund has told a U.N. panel it supports project developers which earn carbon offsets under a lucrative Kyoto Protocol scheme, and which rejects the idea that they are over-compensated.

Chinese project developers rejected key grounds for a review of Kyoto's clean development mechanism (CDM), and the China CDM Fund supported them, confidential papers showed a week before a U.N. panel decides whether to launch a formal review of the scheme.

The projects are the most lucrative under the CDM, which allows rich countries to buy offsets from carbon-cutting projects in the developing world as a way to ease the cost of reducing emissions.

The projects are rewarded if they destroy the potent greenhouse gas HFC 23, which they produce as a waste product in the process of manufacturing refrigerants.

An environmental group, CDM Watch, earlier this year said the projects were producing more of the waste gas than necessary, to destroy it and claim the resulting offsets. [ID:nLDE6601S2]

The CDM executive board (EB) will judge next week whether to conduct a formal review.   Continued...

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