The largest carbon credits purchase deal yet agreed has been finalised between the World Bank and China under the Kyoto Protocol's Clean Development Mechanism (CDM).
The agreement, first revealed some weeks ago, sees $1 billion of mainly European investment in new technology in two Chinese chemical factories to burn the greenhouse gas
HFC23 before it is emitted to the atmosphere. HFC23 is 11,700 times more potent than carbon dioxide in its
global warming potential.
The HFC23 destruction will earn 19 million CER carbon credits per year for investors, equating to the volume of emissions of carbon dioxide equivalent saved.
The World Bank's Umbrella Carbon Facility ties in the Danish, Italian, Netherlands, and Spanish government carbon funds, along with private sector investment houses Climate Change Capital, Deutsche Bank, Mitsui & Co and Natsource LLC. The World Bank said three-quarters of the money invested through these institutions came from private capital.
Under China's CDM laws, 65 per cent of the money invested flows to the Chinese government for use in clean technology investment elsewhere.
Reuters, Point Carbon 29/8/06