HFC-23 industrial gases are a chemical byproduct from generating HCFC-22. According to the bank, HCFC-22 production has jumped 25 percent a year since 2000 in developing countries because of wildly increasing demand for refrigerators and air conditioners.

"The demand for HCFC-22 has remained high above the production capacity of the 19 CDM projects," the briefing said.

EIA and CDM Watch, a Bonn-based watchdog group, fired back with a counter-analysis they say reveals "widespread abuse" in the mechanism and failure by the World Bank to acknowledge it.

Citing figures by the executive board's own methodologies panel, the analysis says that 12 of the CDM plants stopped production when the HCFC-22 cap was reached — suggesting manufacturers were churning out potent gas just for cash.

"It can be assumed that approximately half to two-thirds of the HFC-23 production occurring at CDM plants is unnecessary," the EIA analysis, Ethically Bankrupt: World Bank Defense of the HFC-23 Scandal, said.

'Schizophrenic Posture'

LaBudde said the World Bank's Q & A reveals a "schizophrenic posture" when considering its efforts in dispensing billions to fight warming worldwide. "How can you be going in opposite directions internally?" he said.

The World Bank dismisses accusations of inconsistency.

In a statement, the bank said it sees the CDM as "a key market-based mechanism" to "eliminate HFC-23 emissions worldwide."

Eva Filzmoser, director of CDM Watch, expressed bewilderment at that position.

"I think it is very astonishing that they are making such a statement while the UN has actually acknowledged that there’s potential for gaming and has launched an investigation," Filzmoser told SolveClimate News.

"If the World Bank says that [gaming] is not happening ... this is because they have a very extensive interest in keeping the credits flowing the way they are at the moment," she added.

Abbass suggested climate advocates should have an interest in ensuring the HFC-23 projects continue.

"They're the low hanging fruit of the mechanism, and the mechanism is intended to be a market based approach to identify least cost opportunities for emissions reductions."

Despite its bum rap from advocates, the World Bank insists it is supportive of the CDM board review.

"We welcome the current review of CDM rules and procedures, we stand ready to support any request for information based on our 10 years of experience in working in the global carbon market, and we look forward to the outcome of the review," it said.

Bigger Culprits: China, India

Even LaBudde admits that it is not the World Bank but countries hosting the projects that are the main obstacle to HFC-23 reform — namely China and India.

The two nations have 16 of the 19 projects, with the rest in Mexico, South Korea and Argentina.

"It's a big cash cow for both of them," LaBudde said. China is now at the "top of the international fluorocarbon manufacturing industry."

CDM's HFC-23 projects are said to pay an estimated 65 to 75 times more for the destruction of HFC-23 than it actually costs.

LaBudde and other advocates say there's a cheaper mechanism through which to wipe out the gas: the Montreal Protocol.

$70 Million a Year

HFCs were developed to replace ozone-eating gases that were banished under the 22-year-old Montreal Treaty, signed by 196 nations.

So far, the treaty has retired some 100 chemicals linked with ozone destruction. However, it has also stoked the production of HFCs, which are safe for the ozone but are extremely powerful greenhouse gases.

Currently, about half of all the HCFC-22 plants in poorer countries are covered by the CDM; the rest are venting gas.

A phase-out of HCFC production in industrialized countries is scheduled for 2020 under the Montreal Protocol, while developing countries have until 2030.

According to an April "phase-down" proposal by the U.S., Canada and Mexico, the cost of capturing and destroying HFC-23 at all the world's HCFC-22 plants would be between $60 or $70 million a year for about two decades. That's compared with around a billion a year for half that amount under the CDM.

However, EIA says CDM's lucrative subsidies would need to end to get facilities to shut down.

For the World Bank and the UNFCCC, any long-term pause in the HFC-23 program would mean China and India would likely vent the super greenhouse gases they're now destroying.

LaBudde suggests that's a gamble he would be willing to take.

"A lot of it that wouldn't even be produced absent the huge amounts being paid for the credits that can be derived from it," he said. 

(Image: Arkema, HCFC-22 plant in China)

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