Thursday, July 12, 2007

The perverse incentive of Kyoto's carbon credits

There is a lot of money flowing around in the carbon credits / carbon offsets industry, what with so many guilt-ridden environmentalists and PR-sensitive corporations funding massive tree-plantings and other projects around the world. At least one nation's leader has noticed that in order for his country to get a piece of the action, it might first have to engage in behavior that is supposedly offensive to those who are driving the credit/offset industry in the first place.

AFP reports in this July 12 dispatch:
Guyana's President Bharrat Jagdeo on Thursday criticized the Kyoto Protocol on climate change for failing to allow countries like his nation with pristine unharvested forests to earn carbon credits.

"The Kyoto Protocol is limited in that sense, and it's short-sighted in that it encourages bad behaviour basically among countries; if you cut down trees and you plant them back you get money, if you preserve them, you don't get anything," Jagdeo told a forum on agro-energy.

The Guyanese leader noted that Guyana would reap "miniscule" assistance under the Clean Development Mechanism of the Kyoto Protocol when the South American country begins large-scale production of ethanol and other types of agro-based energy.

He said Guyana has decided to get into the production of bio-fuels such as ethanol and biodiesel. But "assistance is miniscule through the Clean Development Mechanism as compared to the carbon credits we could get from standing forests," said Jagdeo, a Russian-trained economist.

So, if Guyana decided to clear-cut some of its forests, it would qualify for Kyoto's carbon credit program to fund the replant.

The environmental left's push for biofuels is leading to the clear-cutting of Amazon forests, and their beloved Kyoto Protocol may lead to the destruction of even more.