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Abstract
Emissions analysis shows that projects abating two greenhouse gases in Russia under the Joint Implementation mechanism increased waste gas generation, suggesting that plant operators may have generated more waste gas while increasing credit revenues. Carbon markets are considered a key policy tool to achieve cost-effective climate mitigation1,2. Project-based carbon market mechanisms allow private sector entities to earn tradable emissions reduction credits from mitigation projects. The environmental integrity of project-based mechanisms has been subject to controversial debate and extensive research1,3,4,5,6,7,8,9, in particular for projects abating industrial waste gases with a high global warming potential (GWP). For such projects, revenues from credits can significantly exceed abatement costs, creating perverse incentives to increase production or generation of waste gases as a means to increase credit revenues from waste gas abatement10,11,12,13,14. Here we show that all projects abating HFC-23 and SF6 under the Kyoto Protocol’s Joint Implementation mechanism in Russia increased waste gas generation to unprecedented levels once they could generate credits from producing more waste gas. Our results suggest that perverse incentives can substantially undermine the environmental integrity of project-based mechanisms and that adequate regulatory oversight is crucial. Our findings are critical for mechanisms in both national jurisdictions and under international agreements.Cite this article
Schneider, L., Kollmuss, A. Perverse effects of carbon markets on HFC-23 and SF6 abatement projects in Russia. Nature Clim Change 5, 1061–1063 (2015). https://doi.org/10.1038/nclimate2772 