In 15 year’s time — and much sooner if the economy continues to explode — China will overtake the US as the world’s largest single emitter of greenhouse gases. Now, this does not mean that by 2020 it will be a rich country with most people owning cars or using air conditioning like in the US or Europe. China plans by then to have only lifted its 1.4 billion people to the economic level of a semi-industrialized country such as Malaysia today. But just to get to that point, it will mean burning three times as much energy as now, say its leaders.

Kyoto was set up to force rich countries — the world’s largest greenhouse gas emitters — to commit to reducing their emissions first, but hanging over the long political process has always been the thorny question of how and when to bring on board large developing countries such as Nigeria, India, Brazil, Mexico and China. US President George W. Bush cited their absence from any commitments as the reason for the US not ratifying Kyoto, and their rapidly rising energy use, particularly in transport use, threatens to undermine any cuts made by rich countries.

Talks will start this year with the largest countries, to try to persuade them to accept emission reductions in certain industrial sectors for the second round of Kyoto — which starts in 2012. But in the meantime, both rich and poor countries are being encouraged to cut emissions with several “mechanisms” included in the Kyoto protocol, designed to help industrialized countries meet their goals.

One of the most ambitious is the Clean Development Mechanism (CDM). Only just up and running, this allows rich countries which are unable or not keen to cut emissions at home to invest in emission-reducing industrial projects in poor countries and then claim carbon credits for the greenhouse gas reductions achieved.

In what could become one of the largest and potentially most lucrative markets in the world, 240 million credits have already been claimed in 111 projects, but only two projects have so far been fully approved. In the next few months, a flood of new proposals will probably be launched as rich governments and companies see the potential to reduce emissions by investing in large but easily managed schemes.

The projects include many for extracting methane — a major greenhouse gas — from large landfill sites, tree plantation and projects that switch fuel use away from carbon-based fuels like coal and oil, to alternative sources.

However, CDM is proving controversial even before it has really got going. According to CDM Watch, a watchdog group which has monitored the scheme from the start, an offshore oil production works in South Vietnam and two coal mines in China are hoping to gain more than 17 million credits for capturing and using the methane released as part of their operations.

“A mechanism designed to promote sustainable development and climate protection should be reducing the number of coal and oil projects, not providing existing projects with a new revenue stream and diverting financing from renewable projects,” said Ben Pearson of CDM Watch.

One of the first projects put up for approval was for a Brazilian company which claimed credits for not switching its pig iron operations in Minas Gerais, Brazil, from charcoal to coal. It also claimed credits for the carbon that it said would be temporarily stored if it planted 23,100 hectares of monoculture eucalyptus plantations to act as a “sink” to absorb carbon from the atmosphere.

“Sinking” carbon in tree plantations is controversial since, sooner or later, the fixed CO2 will be released back into the atmosphere, and for this reason the “balance” will be zero. But in trying to gain environmental points, the company has attracted the wrath of local environmental groups, unions, churches and human rights workers who claim eucalyptus plantations in the area have driven people from their homes and adversely affected the water table. The company has denied the charges.

The very idea that vast plantations of eucalyptus or palm trees could be used to earn carbon credits for large companies to get rich country governments off the hook of cutting emissions at home appalls many.

“There is so much opposition to plantations all over Indonesia and Malaysia,” said Meenakshi Raman, one of Malaysia’s leading human rights and environmental lawyers.

“But governments [in the tropics] are all developing the arguments that big plantations can be used to encourage the cutting down of forests and their replanting with palms that can be used for carbon credits,” he said. “The CDM scheme is totally open for abuse. I cannot see Kyoto helping developing countries.”

“Most industrialized countries and corporations are using the CDM to reduce the cost of complying with the Kyoto targets, and are therefore looking for the cheapest carbon credits in large quantities,” said Catherine Pearce, international climate campaign coordinator at Friends of the Earth.

“These projects are likely to be gases with a large contribution to global warming, such as methane and nitrous oxide and hydrofluorocarbons [HFC],” she said.

One of the most common complaints about CDM is that it is barely attracting any renewable energy projects to poor countries. CDM Watch says that of the 240 million credits being so far claimed, 40 million come from two HFC-23 gas projects and another 70 million from one N2O gas project — about 46 percent of all credits from these three projects alone. By comparison, renewable projects generate about 25 million carbon credits up to 2012, or less than 10 percent.

“What we really need are investments in clean energies that at the same time contribute to the cultural, social and economic well-being of local populations,” Pearce said.

“The industrialized countries are shifting their commitments to curb carbon emissions and are avoiding truly clean development technology,” said Nadia Martinez of the Washington-based Institute for Policy Studies.

“It has turned into a scheme for commercial transactions that benefit multinational corporations with projects that are not necessarily appropriate,” she said.

In fact, developing countries are already significantly cutting greenhouse gas emissions.

When researchers at the Pew Center on Global Climate Change in Arlington, Virginia, studied five leading developing countries, including India, China and Turkey, they found that their greenhouse gas emissions would have been at least 20 percent higher than they are today had it not been for the energy-saving actions which they have already taken.

They also found found in 2002 that developing countries — believed to be the most vulnerable to global warming effects such as drought and flooding — could save at least 300 million more tonnes of carbon a year if they switched from coal to gas, stopped subsidizing fossil fuels and invested in renewables and energy-efficiency measures.

China, in particular, is leading the way with some of the world’s most ambitious windpower, tree planting and nuclear power plant programs. However, the country that is now driving the industrial world is also planning for more than 40 million new cars by 2020 and up to 30 large new coal-fired power stations.

That means a lot more acid rain, and enough carbon emissions to keep Kyoto in the balance for years to come.