There are doubts about the validity of some of these CERs [certified emissions reductions], on two separate grounds. First, some of them appear to breach the CDM's requirements for sustainable development - 53% of the existing CERs come from just six monster projects, in India, China and South Korea, all of which engage in the most controversial form of carbon reduction. They manufacture refrigerant which produces as a side effect a gas called HFC-23. Although carbon dioxide is the most common greenhouse gas, HFC-23 is 11,700 times more likely than carbon dioxide to encourage global warming. Refrigerant companies find it relatively cheap to install an incinerator to burn the HFC-23 and, once that is converted into certified reductions of emission, each tonne saved can be sold as 11,700 carbon credits. These companies are now earning millions of euros from these credits - more than from selling their refrigerant products.There was a story, perhaps apocryphal, about planning in the Soviet Union. One year, the authorities started to notice a spurt of reports of chandeliers falling from the ceilings of hotels and other public buildings. It turned out that the most recent five year plan had set forth the required production of chandeliers in kilograms.
The environmental problem is two-fold, first that HFC factories tend to pour out other pollutants which don't happen to be greenhouse gases but which are unpleasant or dangerous for local communities; and second, that the potential profits from burning HFC-23 are so great that companies are being encouraged to expand production of refrigerants so they can produce more HFC-23 to incinerate, thus increasing the net amount of pollution.
This is also relevant to our discussion of bad science. One source of bad science comes when scientists measure the effect of an input by looking at the output, not of what they actually want, but of (what they think is) a good proxy of what they want.