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But China has figured the game out. They produce "HFC-23, a greenhouse gas that scientists say is thousands of times more potent than CO2 and that is a byproduct of the manufacture of a common refrigerant, HCFC-22."

Here's where it gets interesting. The Western investors, in this case German companies, pay "roughly $8 a CO2-equivalent ton for destroying the HFC-23. That is a bargain for the Western investors, who would have to pay far more to reduce emissions back home. It also is a boon for the Chinese companies, for whom the actual cost of destroying the gas is less than $1 a CO2-equivalent ton of emissions, the metric used in the carbon market."

So no one is reducing emissions. According to Canada's National Post, (web site) this actually has the effect of promoting the manufacture of large quantities of HFC-23, which is done very cheaply as a by-product, because there is so much profit in destroying it.

The Post describes the process as follows: "Emissions credits are not 'goods' that individuals or companies buy because they want or need them to increase their satisfaction or profitability. They are arbitrary, bureaucratically manufactured 'rights to pollute.'"

In effect, it becomes another commodity to buy, sell or trade. Their use enables companies to pour money into China and other developing nations, a clever way of transferring wealth from "rich" countries. It is, in essence, another form of foreign aid. In a real sense, it is a disguised tax on developed nations.

Bush Surrenders

The Bush policies continue to be the subject of much debate. He didn't, as Newsweek claimed, withdraw the U.S. from the Kyoto Treaty in 2001. As Alan Murray of the Wall Street Journal pointed out in 2004, "In truth, the Bush Administration has withdrawn from neither the climate talks, nor the treaty. President Bush has instead merely continued the Clinton policy of refusing to send the signed Kyoto treaty to the Senate for a vote. Formal rejection by the executive is achieved by renouncing the signature, as President Bush did in fact do regarding the International Criminal Court."

As far back as 2002, Bush announced plans to cut our nation's "greenhouse gas intensity - how much we emit per unit of economic activity - by 18 percent by 2012."

Now, however, he is moving toward some form of international regime to manage CO2 emissions. As we noted in a recent AIM Report, Bush, at the recent G-8 meeting in Germany, specifically committed the U.S. to drastically reducing CO2 emissions through increased regulations, higher taxes, or both.

Bush is himself sponsoring a "Major Economies Meeting on Energy Security and Climate Change" on September 27-28, 2007, in Washington, D.C. The invited foreign participants include the European Union (Current EU President and European Commission), plus France, Germany, Italy, and the United Kingdom, Japan, China, Canada, India, Brazil, South Korea, Mexico, Russia, Australia, Indonesia, South Africa, and the United Nations.

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