The Government is considering changing its Emissions Trading Scheme to exclude two powerful greenhouse gases - nitrous oxide and a powerful by-product of refrigeration known as HFC-23.
Climate Change Minister Nick Smith says the right to claim credits for destroying these gases might be removed if other countries follow through with plans to do the same.
Dr Smith says these gases are so powerful a lot of Kyoto credits are generated by destroying them.
This creates a perverse incentive to manufacture them in the first place, bringing into question the environmental gains from having them on the Kyoto list.
A final decision to exclude them from the Emissions Trading Scheme will be made after consultation.
