August 09, 2012
The NYT has an article on how companies in the developing world have increased production of coolants that contribute to global warming in order to get credits for destroying them. This is the outcome of some of the perverse incentives created by the Clean Development Mechanism in the Kyoto agreement.
This sort of gaming was predictable and predicted at the time. The basic problem was that there was no well-developed baseline against which to assign credits to ensure that money was only paid in situations where it actually led to emissions reductions.
The article included a comment from David Doniger, a member of the “who could have known crowd” who is cited as an expert:
“‘I was a climate negotiator, and no one had this in mind,’ said David Doniger of the Natural Resources Defense Council. ‘It turns out you get nearly 100 times more from credits than it costs to do it. It turned the economics of the business on its head.'”
It would have been worth mentioning that Doniger is wrong, people did have this in mind. It was just the case that the people in positions of authority, and who were cited as experts on the topic, apparently did not understand that this sort of gaming would inevitably result from the deal they crafted.
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