China Dams Reveal Flaws in Climate-Change Weapon

The hydroelectric dam, a low wall of concrete slicing across an old farming valley, is supposed to help a power company in distant Germany contribute to saving the climate — while putting lucrative "carbon credits" into the pockets of Chinese developers.

Workers walk past new construction, near the Xiaoxi hydroelectric dam, built for villagers who have...

Workers walk past new construction, near the Xiaoxi hydroelectric dam, built for villagers who have been evacuated from the dam site in Changsha, China, Dec. 27, 2008. The hydroelectric dam, a low wall of concrete slicing across an old farming valley, is supposed to help a power company in distant Germany contribute to saving the climate, while putting lucrative "carbon credits'' into the pockets of Chinese developers. But in the end the new Xiaoxi dam may do nothing to lower global-warming emissions as advertised. And many of the 7,500 people displaced by the project still seethe over losing their homes and farmland. (AP Photo/Andy Wong)

(AP)

But in the end the new Xiaoxi dam may do nothing to lower global-warming emissions as advertised. And many of the 7,500 people displaced by the project still seethe over losing their homes and farmland.

"Nobody asked if we wanted to move," said a 38-year-old man whose family lost a small brick house. "The government just posted a notice that said, 'Your home will be demolished.'"

The dam will shortchange German consumers, Chinese villagers and the climate itself, if critics are right. And Xiaoxi is not alone.

Similar stories are repeated across China and elsewhere around the world, as hundreds of hydro projects line up for carbon credits, at a potential cost of billions to Europeans, Japanese and soon perhaps Americans, in a trading system a new U.S. government review concludes has "uncertain effects" on greenhouse-gas emissions.

One American expert is more blunt.

"The CDM" — the 4-year-old, U.N.-managed Clean Development Mechanism — "is an excessive subsidy that represents a massive waste of developed world resources," says Stanford University's Michael Wara.

Forced relocations have become common in China as people in hundreds of communities are moved to clear land for factories and other projects, provoking anger and occasionally violent protests. But what happened here is unusual in highlighting not just the human costs, but also the awkward fit between China's authoritarian system, in which complaints of official abuse abound, and Western environmental ideals.

Those ideals produced the Clean Development Mechanism as a market-based tool under the Kyoto Protocol, the 1997 agreement to combat climate change. The CDM allows industrial nations, required by Kyoto to reduce emissions of gases blamed for global warming, to comply by paying developing nations to cut their emissions instead.

Companies thousands of miles away, such as Germany's coal-burning, carbon dioxide-spewing RWE electric utility, accomplish this by buying carbon credits the U.N. issues to clean-energy projects like Xiaoxi's. The proceeds are meant to make such projects more financially feasible.

As critics point out, however, if those projects were going to be built anyway, the climate doesn't gain, but loses.

Such projects "may allow covered entities" — such as RWE — "to increase their emissions without a corresponding reduction in a developing country," the U.S. Government Accountability Office (GAO) said in its December review.

The system's defenders call it essential for hard-pressed industrialized nations to meet their Kyoto quotas, and say the CDM's standards are being tightened.

"It's not as if we're printing money in a garage," Yvo de Boer, U.N. climate chief, said of the credits. "Lots of legitimate questions are being asked," he acknowledged to The Associated Press, but "that's why I'm happy we have a transparent process."

That transparency — online project documents and a U.N. database — allowed the AP to analyze in detail this exploding market, which attracts projects ranging from small solar-power efforts in Africa, to emissions controls on giant chemical plants in India and China.