How carbon credits work....

A nice example from India...

It is not often that this column praises the BBC, but hats off to Mark Gregory, a World Service business correspondent, who recently reported (in the middle of the night) on how a UN scheme to save the planet is working in India.

Under the UN's Clean Development Mechanism, a small chemical firm in rural Rajasthan received 3.8 million "carbon credits" to burn off greenhouse gases that are a by-product of those used in fridges. Over the next decade the company will be able to sell these for a staggering $500 million to firms in the developed world, so they can continue "polluting".

Yet, as the company cheerfully explained, it would have bought the incinerator used to burn off those gases anyway. In other words, the $500 million is a free gift, handed over to achieve precisely nothing. Hardly surprisingly, 3,000 more firms are queuing up to join a bonanza already worth $10 billion a year.