Kyoto Protocol program may have boosted waste greenhouse gas production

A recent paper published in Nature Climate Change describes how some Russian projects operating under the auspices of Kyoto Protocol’s Joint Implementation mechanism have increased waste greenhouse gas generation to unprecedented levels. These findings indicate that perverse incentives created by an emissions credit system are undermining some of the environmental integrity of the Kyoto Protocol’s initiatives. Better regulatory oversight is needed to ensure that the intent of the agreement is adhered to.

In 2005, the Kyoto Protocol established two project-based initiatives, the Clean Development Mechanism for emission reductions projects in developing countries, and the Joint Implementation for projects in industrialized countries. The latter covers Russia and most European Union countries, as well as a few others.

These initiatives provide emission reduction credits to companies if they eliminate any greenhouse gasses that are produced as waste. But revenues that companies receive from these credits can easily exceed the cost of reducing the waste in the first place. Ironically, this creates incentives for companies to increase production of these gases beyond the market demand for them, provided those gasses are not vented into the environment.