The study was published as new research by the US Department of Energy showed that greenhouse gas emissions soared 6% in 2010, the highest increase ever recorded.
“We need game changers and these investments unfortunately trap us in the same game we’re in,” Michael Lazarus, one of the SEI report’s authors, told EurActiv. “This is not the path to climate stabilisation.”
In 2007, new methodology introduced to the Clean Development Mechanism (CDM) approvals process allowed “cleaner” coal plants to earn as much as 451 million certified emission reduction units (CERs) by 2020.
But the analysis by SEI, which was founded by the Swedish government, says that most of the plants would probably have been built "cleaner" anyway and do not need to be granted credits.
“It is highly unlikely that a significant fraction, if any, of the coal projects in the pipeline are truly additional,” the report says.
The report found that “systemic flaws” used by the new ACM0013 methodology – such as high emission baselines and inflated benefits of the new coal plants – could lead to over-crediting of CERs “on the order of 250%”.
“Based on our evidence, a majority of the credits generated are likely not to be real and additional,” said Lazarus, a senior SEI scientist and former member of the CDM’s methodology panel.
But international climate finance representatives believe that any actions that result in a lowering of emissions needs to be supported.
“If somebody puts in a 'super-critical' [technology] instead of a run-of-the-mill power plant and as a result, there is a lot of climate finance, to me that's positive,” one official told EurActiv.
“Anything that helps developing world countries to lower or go under their CO2 emissions baseline is good. It helps the environment. That's the general concept,” the official said.
There are 45 coal projects in line for CDM support in India and China. Six have already been approved to generate carbon credits and 39 others are at the validation or review stages.
The report says that under current rules, nearly 80 gigawatts of new coal plants could be supported through the CDM, representing €3billion to €4 billion in CER revenue at €8 per CER.
The ACM0013 methodology requires that they show that the CDM played a decisive role in their move to more efficient ‘super-critical’ or ‘ultra-supercritical’ technologies.
These emit less CO2 than normal coal, although twice the levels of natural gas plants.
But according to the SEI report, other factors such as “persistent coal shortages, rising [coal] prices and the need to address major power supply deficits” are more likely reasons for the technological transition than CER revenue.
Any marginal reductions in greenhouse gas emissions are thus bought at the expense of locking an annual 400 million tonnes of CO2 pollution into the atmosphere.
As a result, the report says “it is essential to re-evaluate whether an offset-based, incentive-only system such as CDM should support coal investments at all.”
COMMENTS
Golden oldies: CDM and its (non)impact certainly falls into that category. I note that Euractive often quotes officials that specialise in bollock-speak anonymously. Why? Without further ado and with 0.50 calibre pens loaded I will now demolish the myth that CDM has ever made a blind bit of difference to GHG emissions but nevertheless has filled the pockets of Chinese and Indian crooks with lots of money (& continues to do so). What follows does not paint a pretty picture. I suggest people get some fact together before opening their mouths.
May 2008: A working paper from two Stanford University academics (David Victor, law professor and Michael Wara) examined more than 3,000 projects applying for or already granted up to $10bn of credits from CDM funds over the next four years. The paper concluded that the majority should not be considered for assistance on the basis that they would be built anyway
Working Paper Uni Zurich Feb 2008: The approval of methodologies and individual projects in the CDM is often an issue of national interest and thus politically biased. Based on data for about 250 methodologies and about 1000 projects discussed by the EB so far, the results suggest that indeed, along with formal quality criteria, political-economic variables determine the final EB decision.
October 2008 Jorund Buen, director at Point Carbon has said that some companies are forging documents in an attempt to gain certification for CDM projects.
August 2008 The World Bank said that CDM is “expensive and time consuming” because it requires project managers to follow new rules regarding emission reduction technologies.
Earlier in 2008 , U.N. regulators who administer the CDM questioned whether projects produce a real environmental benefit and raised concerns about some independent auditors of the projects.
August 2010:CDM board rejects project to build 4000MW Indian coal power plant by Tata Power using supercritical boiler technology to cut carbon emissions and reduce coal consumption. CDM panel rejected Tata's application, saying it had not shown additionality.
January 2009: Caio Koch Weser, vice-Chairman of Deutsche Bank group and a former German minister has said that the CDM is not fit for purpose and must be reformed if global emissions reduction targets are to be met.
November 2009: Garth Edward, head of emissions trading at Citigroup, and formerly head of trading at Shell "The CDM in China is largely pointless as far as reducing its emissions trajectory," when compared with the scale of growth in GHG emissions in China and must be scaled up.
March 2010: A study of approximately 100 offset projects by the journal Climate Policy found that 60% of projects actually provided evidence that the CDM funding made a difference and that 40% of companies would have reduced emissions anyway
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