Here’s a lovely little cautionary tale about emissions trading from India. First, it demonstrates how desperately inefficient emissions trading is in paying for emissions reductions:

In a deal that has angered environmentalists*, the Indian company SRF, which produces refrigeration gases at a sprawling chemical plant in Rajasthan, stands to make a profit of more than £300m from the bizarre arrangement that is supposed to combat climate change. … The Indian company has spent just £1.4m in equipment to reduce its emissions, but it will reap a profit of more than 200 times that amount from British investors and others.

Now why couldn’t the British firms have paid the Indians directly for the technology?

Anyway, inefficiency aside, it looks like the payments will actually increase emissions:

It is now using the money it has made to expand production of another greenhouse gas, which is a thousand times more damaging than CO2 Other manufacturers in India and China producing similar products are expected to earn an estimated £3.3 billion over the next six years by cutting emissions at a cost of just £67m. …
While British companies use the credits instead of cutting their own pollution, SRF plans to reinvest its windfall in building a new plant producing another refrigerator gas called HFC-134a — 1,300 times more damaging than carbon dioxide.

This ridiculous boondoggle brought to you courtesy of the Kyoto Protocol and enthusiastically supported by a lot of suddenly-very-rich carbon traders.

* Of both kinds – Greens and Free-Market Environmentalists.