From the Department of Unintended Consequences comes this story in the NY Times today. It has to do with a UN program that gives financial credits to developing countries that deploy clean energy-generation technology:

“The wind turbines rising 180 feet above this dusty village at the hilly edge of Inner Mongolia could be an environmentalist’s dream: their electricity is clean, sparing the horizon sooty clouds or global warming gases.

But the wind-power generators are also part of a growing dispute over a United Nations program that is the centerpiece of international efforts to help developing countries combat global warming.

That program, the Clean Development Mechanism, has become a kind of Robin Hood, raising billions of dollars from rich countries and transferring them to poor countries to curb the emission of global warming gases. The biggest beneficiary is no longer so poor: China, with $1.2 trillion in foreign exchange reserves, received three-fifths of the money last year.”

The problem is, in a nut shell:

[The program’s] growth has come almost entirely by focusing on efficient projects in China and other fast-growing countries that spread the administrative costs over many large efforts, while poorer lands have received almost nothing. And that is why the program is becoming a battleground, pitting an unlikely coalition of bankers, traders, industrialists and environmentalists, who defend it, against economic development advocates, who warn of distortions.

According to the World Bank, China captured $3 billion of the $4.8 billion in subsidies last year for dozens of projects. Yet it accounted for less than two-fifths of the developing world’s fossil fuel consumption, the main source of warming gases.

And there’s the rub. China, to its own credit, has figured out how to game the system to its advantage. Other countries with less technical expertise and many less resources are not able to follow in China’s steps, even though they need the program much more than China does at the moment.

(Of course one could argue that since China’s rapidly growing energy needs are presently the greatest threat to increasing the rate of climate change, that any mechanism that slows down the adoption rate of dirty energy sources is a very good thing.)

But I’m still reminded of a popular “scheme” here in Arizona – when the state gave generous tax credits to people who purchased alternative energy vehicles hoping that it would spur the adoption of hybrids. Instead the program became a way for wealthy people to buy huge cars that ran on CNG that they wouldn’t otherwise be able to afford. It’s a good thing that the wealth folks could by socially responsible land-going battleship cars, but think how much larger an impact the money could have had if it were used to purchase many many more reasonably priced small alternative fuel cars…

Read the rest here: Clean Power That Reaps a Whirlwind – New York Times