WWF on Monday (28 June) published a new analysis by the Öko-Institut evaluating the work of companies or so-called 'Designated Operational Entities' (DOEs), which are in charge of verifying projects that allow companies to earn offset credits by investing in emissions reductions in developing countries.
For the second consecutive year, they gave reviewers a low rating due to the high number of projects evaluated positively but subsequently rejected or reviewed by the CDM Executive Board.
The report cites incompetent personnel and unclear or ambiguous rules that hinder quality checks by the five auditors analysed. It concludes that the main reason to reject projects was the lack of proof of 'additionality' (see 'Background').
"Since our rating in 2009 discrepancies did not decrease – they increased," said Juliette de Grandpre, climate policy officer at WWF Germany. "Due to the shortcomings, big amounts of non-additional CO2 certificates might be awarded. This might lead to a boosting of global emissions, quite contrary to the intended reductions for which the system was put in place."
The green groups gave the highest rating to Germany's TÜV Nord with D, while Bureau Veritas Certification got an F. TÜV SÜD, DNV and SGS all received E+ and have all been temporarily suspended by the UN in the past two years.
NGOs have been criticising the UN for allowing projects that in fact increase global-warming emissions to generate offset credits.
CDM Watch, a green NGO, earlier this month requested the UN to review its methodology on granting credits for projects that destroy HFC-23, a potent greenhouse gas, which is a by-product of manufacturing HCFC-22 refrigerant gas.
It found evidence that such refrigerant plants were operated with the purpose of maximising the generation of offset credits and in the process producing more of the greenhouse gas than they would have done without the CDM.