As the delegates in Warsaw sit down to discuss climate change, man’s part in it, and ‘roadmaps’ for remedies, so too will pub bores here sit, drink and discuss whether or not man really is responsible for climate change. On the one hand we will have the Monibot corner charging that everything we do in the West will necessarily result in poor weather somewhere else in the world; n the other, the Delingpole team will say that it is all lefty rubbish and we should carry on fracking and burning.

The one thing that unites our delegates luxuriating in five star hotels and first class air travel while pontificating over man’s (specifically Western man’s) responsibilities and our two chaps in the boozer guzzling lager and coming to blows over ice caps is that none have complete knowledge and, as a consequence, none will compromise.  Despite being made up of hundreds of different scientific disciplines, climate ‘science’ has become binary, AGW is either true or false.  No middle ground.  Hardly a good starting point for an inter-Governmental conference or a dinner party.

I claim to have none of the answers as to why the world stopped warming in 1998, nor why typhoons occur, or even why, given the short life expectancy of humankind, we should even care.  What I can say with absolute confidence and seven years of experience in carbon/environmental finance, is that the ‘solutions’ to the issue will fail.

From the first World Forum in 1972, which established the United Nations Environmental Program, to the latest Conference of the COP 19 going on right now in Warsaw, the principle held is that the environment is ‘common ground’.  This means that the responsibility for the environment is held by all people and, therefore, the governing rules are beyond national control and subject to supranational governance. Put simply, my neighbour has to take responsibility for their bonfire if I have my washing out on the line and it gets mucked up, which took on particular relevance in the wake of the Chernobyl disaster.

The Brundtland Report in 1987 went further and enshrined the term ‘sustainable development’ into environmental law making.  This, effectively, means that the burden of looking after environmental quality falls in relation to the relative levels of development of the individual nations – the more developed a country is the greater its environmental reasonability.  This means China, India, and Brazil etc. get a free pass on environmental responsibility until they have caught up with the USA, Japan and the EU etc.

So what we have created, in the search for a solution, is a world of blamers and blamees.  The blamers get a free pass at the expense of the blamees, until such a point that they become the blamees.  So how does that work?

Via the principles of ‘common ground’ and ‘sustainable development’ Kyoto created the Clean Development Mechanism.  The CDM is a method of the West paying for Greenhouse Gas Abatement projects in the Developing World, which I will refer to as China from now on for simplicity’s sake. That generates carbon credits, known as Certified Emission Reductions (CERs) which can be sold into the West to pay for Kyoto shortfalls in emissions targets.  So far so good: the West pays for its historical emissions by helping China develop sustainably.  After all, the principles state, it would not be fair to hinder China in its development because of mistakes by the West, and so the system is all carrot and no stick.

So how does this work?  Kyoto identifies 4 greenhouse gasses – Carbon Dioxide, Methane, Nitrous Oxide and Sulphur Hexafluoride – plus 2 GHG types – per Fluorocarbons and Hydro Fluorocarbons.  Still with me?  Kyoto then ascribes a greenhouse potency to all of the gasses, and for simplicity I am going to choose one particular gas, HFC-23, which was given a Kyoto carbon equivalency of 11,700.  These means that if you eradicate one unit of HFC-23 you eradicate the equivalent of 11,700 units of Carbon Dioxide.

But what is HFC-23, and why should I care?  HFC-23 is a by-product in the manufacture of HCFC-21, a refrigeration gas, a CFC which is controlled by the Montreal Protocol.  We have the Montreal Protocol because we are told that CFCs are blasting a hole in the ozone layer.  But Montreal does not restrict the creation of new HCFC-21 units in China until they have caught up with the West.  In other words, China can build as many CFC manufacturing units as it pleases until constrained by Montreal in 2014.  Thrilling stuff, I hear you say, but what does it mean?

The price of the CERs during the period 2008-2012 was so lucrative that all over the Developing World that HCFC-21 facilities were built, not for the need of refrigeration gases, but for the value of the credits generated by flaring off the by-product.  Basically, the exhaust was worth more than the car.  To flare off one unit of HFC-23 cost less than one euro cent but yielded at least €9 – and a maximum of €20.  Even though the by-product was a CFC that is blasting a hole in the ozone layer.

‘So what?!’ you yell.  ‘What does that matter to me?’  HFC-23 and the very similar Nitrous Oxide methodology accounted for about 80% of all CERs generated in that period.  Some were bought by the Japanese for their Kyoto compliance.  And the rest?  Some €30 billion worth went straight onto your energy bill.  If you are still awake, that might have got your attention.  Yes, the power companies had to buy these ‘credits’ which were never ‘sustainable’ as part of their requirements in the European Emissions Trading System.  To make matters worse, the single largest investor in these ‘projects’ was the World Bank.

I genuinely could bore on, and I do, for hours on the weaknesses of carbon trading and emission rights, but I suspect that I will have very few readers left by then, so I will draw to my conclusions.  I have no knowledge, because like the pub bores I am not a scientist, whether or not man’s activities cause climate change, or even if climate change is really happening. But I am convinced that people should behave responsibly towards the environment for as long as we rent our space here.

What I can say categorically is that the nature of the vested interests of the developing world, and the nimble nature of private finance to seek out opportunities within a rigid system, combined with an inflexible European political dogma will lead to two things: emission levels in the world will rise unless organic efficiencies become available, and we, the European power consumers will be told to pay and pay and pay.

Warsaw, and the next COP and the next and the next, will continue to seek a cap on Western emission levels, not in the name of the environment but rather in the name of financial opportunity, and will seek further get outs for the rest.  We will be told that unless the West pays more, then storms will become more deadly and famines more frequent.  And all their solutions will have no bearing on environmental improvement, but rather they will be money making machines for China.

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